:00:00. > :00:00.someone to pick them up and put them back on track again. We will be
:00:00. > :00:11.speaking to three chief executives who have all done their bit to sort
:00:12. > :00:18.out corporate mist. Each week business leaders gathered
:00:19. > :00:24.in London for the BBC Radio 4 programme the bottom line and you
:00:25. > :00:32.can see it as well I see it. -- as hear it.
:00:33. > :00:38.With me around the table, three guests who have each taken companies
:00:39. > :00:47.out of very difficult times. First of all, Harry Green, chief executive
:00:48. > :00:54.of Thomas Cook. I think it is the world's oldest travel brand going
:00:55. > :01:00.back to the 19th-century. We are travel company supporting over 23
:01:01. > :01:08.million customers across the whole world for vacations, experiences,
:01:09. > :01:17.travel. We employ 35,000 people. Last year we raised over ?1.6
:01:18. > :01:22.billion of new money with supporting shareholders and banks and the bond
:01:23. > :01:28.deal. The business that looked as if it would hit a wall and crash is
:01:29. > :01:32.unlikely to do that. You do not sexy company on this scale overnight. You
:01:33. > :01:46.took over just before the London Olympics. My next guest is the Chief
:01:47. > :01:53.Executive of Rossignol. You will know it as a maker of winter sports
:01:54. > :02:03.equipment. Rossignol is born about 100 years ago. We make skis,
:02:04. > :02:14.snowboards, helmets, goggles, all types of things you need to slide on
:02:15. > :02:21.the snow, but the businesses found wherever you find mountains. We have
:02:22. > :02:27.been through troubled times but today the company is making money
:02:28. > :02:30.which is something of interest for all employees and shareholders for
:02:31. > :02:38.customers, so we are happy about that. There's still a lot of things
:02:39. > :02:42.to do but we are back in black. Your personal rule is a bit complicated
:02:43. > :02:47.because you were running the company then it was bought and you stepped
:02:48. > :02:55.aside and they screwed it up and you had to come back. It is simple. I
:02:56. > :03:04.had the privilege to run this company for four years before it was
:03:05. > :03:09.sold. They had it in mind to develop the apparel categories. That did not
:03:10. > :03:13.work and the company collapsed totally and I came back with a few
:03:14. > :03:19.financial burdens to try to turn around the company three years
:03:20. > :03:31.later. My final guest is Martin Gibbs, chief executive of Game
:03:32. > :03:39.Retail. It started back in the 1990s with game and Electronics Boutique
:03:40. > :03:43.and it was there and it was a shop front for purchasing video games.
:03:44. > :03:52.Game as it stands today goes back less than two years. I came into the
:03:53. > :03:56.business and it was at that moment in time just out of administration,
:03:57. > :04:03.so we are quite a young business but built with some key foundations that
:04:04. > :04:07.were set in the previous business. It was brought out of administration
:04:08. > :04:11.and you were brought in but it existed as a previous corporate
:04:12. > :04:19.entity before the administration? That goes back to the merger of two
:04:20. > :04:23.quite large retail groups. Before it went into administration you left
:04:24. > :04:31.it? I had previously left in 2011 and I came back in 2012. Is it a
:04:32. > :04:35.story with a reasonably happy ending? We are pleased with the
:04:36. > :04:40.progress we have made today. Profit? We are pleased with the
:04:41. > :04:45.progress! Thank you and we have a sense of the
:04:46. > :04:48.different businesses, different but not so different in that they were
:04:49. > :04:54.strong businesses initially and ended up in a rather bad place.
:04:55. > :05:02.Maybe we should just start off by thinking about how good businesses
:05:03. > :05:08.turn bad? We had big heads because when you are the leader and have 40%
:05:09. > :05:14.market share, you know everything and are always right and your
:05:15. > :05:18.competitors are wrong. You start to work less and then it probably takes
:05:19. > :05:23.a few years for you to realise that some people have grown and taking
:05:24. > :05:30.your place and you have to catch up. This is exactly what happened to
:05:31. > :05:37.Rossignol. I always said to my team and the difficult times, this is the
:05:38. > :05:47.best thing that could happen to Rossignol, being in such a position.
:05:48. > :05:52.I have done transformations and most of my career and in four different
:05:53. > :05:59.continents. The themes I have seen are that businesses get far too
:06:00. > :06:05.complicated. Thomas Cook had 11 layers between the customer and the
:06:06. > :06:14.CEO, and losing sight of the core things customers want. I just want
:06:15. > :06:18.to be clear, Thomas Cook had expanded by taking over other
:06:19. > :06:26.businesses. Where the score to what Thomas Cook was doing? The industry
:06:27. > :06:30.was consolidating and there are many sectors of industry that when an
:06:31. > :06:37.industry is consolidating going from many small local players to two or
:06:38. > :06:42.three large players, there's less testosterone rush to acquire lots of
:06:43. > :06:47.businesses. Thomas Cook had over 84 different brands and many of the
:06:48. > :06:56.customers were not seeing the Thomas Cook that we loved and wanted. We
:06:57. > :07:03.have got complacency and over complication. What about in the case
:07:04. > :07:09.of Game? Your just selling a video game! How'd you do that wrong? Is it
:07:10. > :07:16.that the games are the wrong games or visit that the ambience of the
:07:17. > :07:21.shop is wrong? What is it that you could do wrong in just selling a
:07:22. > :07:26.game? Some of the answers you have come up with. It is about the school
:07:27. > :07:30.environment. It is not just about the purchase but the experience, and
:07:31. > :07:34.you are purchasing something important to you, but not just in
:07:35. > :07:39.the time where you pick up a controller. You like to engage with
:07:40. > :07:44.that experience on the move and understands what else your friends
:07:45. > :07:55.are doing. It is not just about a box on a shelf. In the ski business,
:07:56. > :08:02.when I came back to Rossignol, this company was producing about 400
:08:03. > :08:07.different models of skis. The consumer that not understand the
:08:08. > :08:18.offer, the retailer does not understand, we did not understand. A
:08:19. > :08:27.total mist. How many do you need? We cut the number of products in half.
:08:28. > :08:36.20 years ago, you were buying your skis everywhere in all countries. It
:08:37. > :08:41.is a big switch and 20 years ago the Japanese were skiing like crazy, 2
:08:42. > :08:49.million peers pair of year, and less business has shrunk. The Japanese
:08:50. > :08:56.are skiing on PlayStation and so forth. Good news for you! How bad
:08:57. > :09:04.does it need to get for people to recognise, oh dear, we have a
:09:05. > :09:07.problem. It actually started spiralling out of control with
:09:08. > :09:15.suppliers saying we would not supply you because you cannot peers and
:09:16. > :09:23.then the company cannot sell... ? It is well-documented that the
:09:24. > :09:27.suppliers losing trust in the old business and that game group as it
:09:28. > :09:33.was good not to the right products into any of its channels. We lie
:09:34. > :09:36.heavily on our investors, that is the reality, and an immense amount
:09:37. > :09:40.of goodwill with our supplier partners, because we can offer no
:09:41. > :09:48.more guarantees than the old business. Was it quite that bad at
:09:49. > :09:52.Rossignol? It was quite bad. You can be wrong one year but in our
:09:53. > :10:01.business which is a went business, if you are wrong two years in a row
:10:02. > :10:06.and if on top of that, you have less now than you need you are in deep
:10:07. > :10:11.trouble. Your business is now dependent rather than economy
:10:12. > :10:16.dependent? We always say we are much smarter when we have snow than when
:10:17. > :10:20.we do not! We have talked about how you get
:10:21. > :10:26.into trouble but let's talk about how you get out. Talk about your
:10:27. > :10:30.first base and because each of you is picking up these companies either
:10:31. > :10:40.coming back or going through the door for the first time knowing the
:10:41. > :10:44.company is in some difficulty. It was very emotional, and emotional
:10:45. > :10:51.time, to see the business as it was from the outside. At times you are
:10:52. > :11:03.left quite angry and as you come back in to the same office, I was
:11:04. > :11:08.hit with such emotion. I really struggled to explain it to people
:11:09. > :11:15.because it was people's livelihoods and people's careers and as soon as
:11:16. > :11:20.I walked in the door, the wave of expectation for me was quite
:11:21. > :11:23.difficult to cope with. The first base are always the same. You talk
:11:24. > :11:31.to as many people as you possibly can. Both centrally, our supplier
:11:32. > :11:35.partners, our store teams, and we set out a programme of
:11:36. > :11:41.communication. I was very clear with our store teams at the time that we
:11:42. > :11:44.were not necessarily in great shape centrally so they needed to run the
:11:45. > :11:51.stores and we would come back and help them when we were ready. What
:11:52. > :11:58.was your first day at Thomas Cook like? When it was announced, the
:11:59. > :12:02.share price. , it was about 15p, so dropping when you are announced is
:12:03. > :12:07.really sad. The major reason was, she is not from travel. There were
:12:08. > :12:11.two things that had to happen when I came into the business. The first
:12:12. > :12:18.was, there had to be enormous pace. Thomas Cook had to raise ?1.6
:12:19. > :12:22.billion, had to push the debt out and reduce the construct of the
:12:23. > :12:31.debt. The overriding issues were ones around pace. We had to move
:12:32. > :12:35.quickly. On day one, I connected with every single person in the
:12:36. > :12:41.business, and said, you tell me what you think the major issues are. Over
:12:42. > :12:46.8000 people, within four weeks, gave me their views. So, within four
:12:47. > :12:52.weeks, we distilled, what are the 15 major issues that we have to fix?
:12:53. > :13:04.That is in the context of turnaround. Bruno? The first day was
:13:05. > :13:09.meetings with the unions etc, and I can tell you, the very first
:13:10. > :13:13.evening, after one day in the company, I was depressed, because I
:13:14. > :13:18.met again with people I left three or four years before, they were
:13:19. > :13:24.totally exhausted Tom was equally, mentally. They were never told how
:13:25. > :13:30.bad the situation of the company was. We started on the very first
:13:31. > :13:39.day to really show the numbers, as we were understanding them. Which is
:13:40. > :13:47.really striking, you can have very exhausted and depressed people, and
:13:48. > :13:51.on a single day, it can change, if you make people understand what is
:13:52. > :13:56.the target, and people believe there is a reasonable chance to get it,
:13:57. > :14:02.you know, the machine restarts instantly. So, is that true of all
:14:03. > :14:06.of you? UC turnaround, some evidence that you stop the haemorrhaging, you
:14:07. > :14:13.could see... How quickly, Martin, is that evident? I get asked that a
:14:14. > :14:19.lot, when did you feel this was going to work? The answer to that
:14:20. > :14:22.is, the second week. The reason for that is because our suppliers have
:14:23. > :14:27.started supplying stock, we put the stock into our online business and
:14:28. > :14:31.into our stores, and customers came back very quickly. We realised
:14:32. > :14:36.straightaway that it is not just you and your teams that are that
:14:37. > :14:39.passionate about what you're delivering, it is your customer is
:14:40. > :14:47.as well. I love some of the words that are being used, it is pace. You
:14:48. > :14:50.get a lot wrong. You also get a lot right in the outset. But the things
:14:51. > :14:57.you get wrong, you fix them the next they, you do not pontificate for
:14:58. > :15:06.three months. You admit straightaway, we did not get that
:15:07. > :15:12.quite right, and you are very open, you talk about the pieces you did
:15:13. > :15:16.not get right as well. Everything is about cash, it does not matter what
:15:17. > :15:19.the shares are worth what the shareholder thinks. If there is no
:15:20. > :15:25.cash, it is game over. Was that a problem in your case? It was a huge
:15:26. > :15:36.problem. We took over the company in vember, which is the worst month for
:15:37. > :15:42.working capital in Rossignol. -- in November. We had no finances. I knew
:15:43. > :15:48.all the banks from the past, but when I came back, the company was
:15:49. > :15:58.bankrupt. I was dealing with Colin suppliers, asking to postpone
:15:59. > :16:04.payments. -- calling suppliers. Quite close to the... But when you
:16:05. > :16:08.show your staff it works, this is the way, this is turning around the
:16:09. > :16:13.company, it is not making one big decision, but making 1000 decisions
:16:14. > :16:18.a day at the same time, and we wanted absolutely to put the
:16:19. > :16:30.consumer in the centre of everything. That was the key thing.
:16:31. > :16:34.We told that we were told to the retailers -- talk to the retailers,
:16:35. > :16:39.big mistake was that you are a consumer, if you have a problem with
:16:40. > :16:44.your goods, you have a problem, the phone rings twice. If nobody takes
:16:45. > :16:48.it, it is going to the sales director phone. If he does not
:16:49. > :16:54.answer, it is going to my phone. Seriously. Did you get many
:16:55. > :17:00.customers through to your phone? Sun-mac sometimes I did, sometimes I
:17:01. > :17:05.did not. -- sometimes I did, sometimes I did not. Then it is
:17:06. > :17:09.focused through the consumer. The other thing that is so critical is
:17:10. > :17:14.putting together the team, choosing, my case was kind of a third, a third
:17:15. > :17:19.of the people I inherited were fantastic, particularly in the
:17:20. > :17:26.finance area because we had to do massive refinancing. But then, a
:17:27. > :17:33.third, you promoted from within. And then, a third, this was at the most
:17:34. > :17:38.interesting part, very few people had come from outside. Normally,
:17:39. > :17:44.when you become a FTSE 100 business, you hire people who know about event
:17:45. > :17:50.things. Without that team, however good your leader is, you are not
:17:51. > :17:58.capable of the size and scale of the transformations we are talking
:17:59. > :18:03.about. I completely endorse that. It was a very similar process we went
:18:04. > :18:12.through at Game. It took us a long time to bring the senior team
:18:13. > :18:16.together. In fact, the last entrant was 15 or 16 months after we started
:18:17. > :18:20.recruitment. You lean on people very heavily, you mean on some
:18:21. > :18:25.individuals within the business to pick up far bigger room it's done
:18:26. > :18:35.they are comfortable with, that is within their inherent, obvious skill
:18:36. > :18:40.set, everybody thought of Game as was, rather than Game that we wanted
:18:41. > :18:44.it to become. There was a lot of convincing we had to do to get the
:18:45. > :18:48.right talent. Getting the team together is about finding good evil,
:18:49. > :18:53.but also about the much more painful job of saying to a lot of people who
:18:54. > :18:59.have been there in the bad days, you're not really going to work, I'm
:19:00. > :19:06.afraid, you have to go. You know, everything is understandable as long
:19:07. > :19:13.as you respect people. In Rossignol, we moved 35% of the staff, for me,
:19:14. > :19:19.it was an absolute pain. I knew a lot of them. But, you know, at the
:19:20. > :19:24.end of the day, if you say, for saving this company, we have to chop
:19:25. > :19:28.off an arm, we're going to do it, but we will make sure people who
:19:29. > :19:35.stay or people who leave are going to be treated as best as possible.
:19:36. > :19:37.The key thing for us was probably that because the business had been
:19:38. > :19:42.through the administration process, the reality was that the
:19:43. > :19:49.administrator had chosen which are to cut off. Nearly 300 stores were
:19:50. > :19:52.closed. Some of those were stores that I would not have chosen to
:19:53. > :19:57.close, essentially, the administrator had made a lot of able
:19:58. > :20:02.redundant. There were some people who were understandably so tomorrow
:20:03. > :20:07.lies at the end of the administration process -- so
:20:08. > :20:11.demoralised, part of my role was to aim that I was to support them,
:20:12. > :20:15.because they had had enough. I am tried to work out the quality of
:20:16. > :20:18.someone who would be good at the jobs you have been trying to do. I
:20:19. > :20:27.imagine you all work very long hours, at least in the early days.
:20:28. > :20:32.You have to be part lion and part panda the human heart, who knows
:20:33. > :20:36.that people are hurting, knows that they are confused, and you can sit
:20:37. > :20:42.authentically in large groups and relate to that. But that you can
:20:43. > :20:46.roar at an unsecured creditor who is going to cut off whatever supply
:20:47. > :20:55.they are about to cut off. I would have thought the key thing is a
:20:56. > :21:01.client of -- a kind of clarity. All that strategy is is, where are we
:21:02. > :21:04.now, where do we want to get to, effectively, to compete? Every
:21:05. > :21:09.business should go through the exercise of imagining that
:21:10. > :21:15.tomorrow, it is swiped by whoever. How will the board deal with that,
:21:16. > :21:19.how do customers deal with that, how do employees deal with that? The
:21:20. > :21:24.exercise that we have been through, it is not accepting an exercise
:21:25. > :21:29.because it was real life, if stable, strong businesses did more
:21:30. > :21:36.of this, perhaps there would be less need for transformational activity.
:21:37. > :21:40.I must say, what I find fascinating is how many similarities there are
:21:41. > :21:46.in your pre-very very expenses. -- in your three. Let me thank my
:21:47. > :21:51.guess. Harriet Green, Chief Executive of the Thomas Cook travel
:21:52. > :21:59.group. The Chief Executive of Rossignol. And Martin Gibbs, Chief
:22:00. > :22:02.Executive of Game. Thank you to all three of you, thank you for
:22:03. > :22:10.listening, I will be back with more guests next week. Don't forget, the
:22:11. > :22:14.downloads for The Bottom Line are available, details are on the
:22:15. > :22:16.website. You can always listen to it on BBC Radio 4. We would like to get
:22:17. > :22:36.your e-mails, just drop us a line. Once again, Deborah Gers about an
:22:37. > :22:42.hour ago were about -- temperature was about 18 degrees or so. That is
:22:43. > :22:46.because you are being influenced why this high pressure, which has kept
:22:47. > :22:53.the crowd at bay. It is not the same everywhere. -- kept the cloud.
:22:54. > :22:54.Particularly the top