CEOs Take to the Road
According to a classic lottery slogan, “you gotta play to win.” For CEOs in tight financial times, this translates into getting face-to-face with key stakeholders, whether they’re clients, prospects or employees.
Never has more attention been lavished on the travel habits of corporate executives than at the end of 2008, when the heads of Detroit’s Big Three automakers flew to beg Congress for a bailout in private jets. You can also count that moment as the beginning of a precipitous decline in business travel: The combination of public scrutiny of corporate events and the deep recession sent business travel down around 30 percent at many companies last year. Some, such as Sears Holdings, even went so far as to sell their corporate jets, and a handful of S&P 500 companies reported eliminating aircraft expenses altogether in 2009, according to the Corporate Library.
But now that drop is being reversed, thanks to the slow but solid steps we’re taking toward economic recovery, alongside the need to drum up business and to buck up employee morale. Domestic U.S. business travel spending has already strongly outpaced the 5 percent gain predicted at the start of 2010. And now the CEOs themselves are hitting the road, joining their phalanx of salespeople and experts, using their clout and experience to do hands-on work not seen out of the executive suite in some time. Executive Travel asked four CEOs of various companies to detail their recent jaunts for business.
The Salesman
Flying is closely linked to the performance of Peter La Colla’s business: selling franchises of his Street Corner convenience stores. “There is a direct correlation between how many hours I fly and the number of stores sold,” says the Topeka, Kan.–based executive. He saw this clearly in 2009, when he sold just five of his 300-to 2,000-square-foot mall, airport and office building–based shops. Ideally, he would have inked deals on at least 10. “The truth is, I am stir-crazy from not doing anything last year,” La Colla says. “Now things are starting to heat up, and I’m anxious to get out of the office.”
La Colla aims to be on the road no less than once a month for at least four days, visiting his company’s far-flung franchises (51 locations in 14 states), meeting with suppliers and, most important, getting to know potential franchisees. Because Topeka is 90 minutes from the nearest commercial airport, in Kansas City, La Colla flies himself in a four-seat, propeller-driven Mooney 241. Recently, he viewed a prototype of a 5,000-item vending machine at a trade show in Chicago, Ill., then flew to Dubuque, Iowa, to scout a location at a refurbished office building before returning directly to Topeka—24 hours after departure. In some weeks, he can check up on a dozen or more franchisees, which is vital to maintaining quality control throughout his $16 million annual sales chain.
He’s passionate about flying, but La Colla also finds plenty of reasons to stay on the ground in Kansas to conduct much of his work via email, phone and webinars.
“I like webinars for detail work,” he explains. “Reviewing a letter of intent, making a counterproposal on a lease or working on a store design are good examples of how I use webinars. We are more focused, and there is less distraction.” If it involves making personal connections or evaluating unusual retail spaces, however, La Colla doesn’t hesitate to take to the air.
Bottom line on travel: “The face-to-face meetings are more personal. They are an important bonding experience,” says La Colla. “Plus it’s a great conversation starter when you show up in your own airplane.”
The Opportunist
Even in luxury goods, it pays to have an eye for bargains. For Jack Mitchell, CEO of Mitchell Stores, a long-awaited opportunity to enter the Northern California market for fine men’s and women’s clothing was presented when the recession pushed the Wilkes Bashford retail brand to bankruptcy. The store, with locations in San Francisco and Palo Alto, went to Mitchell for $4.1 million in November: mere pennies on the dollar for the annual revenues the stores generate. With those two outposts added to the two Connecticut and one Long Island, N.Y., luxury stores that Mitchell already stewards, his family-owned business is reportedly bringing in $100 million a year. The acquisition also set Mitchell up for a very busy travel schedule.
Buying Wilkes Bashford was the easy part. The real work began in earnest afterward—not just in sprucing up the merchandising, but in rallying shell-shocked employees and training them in the Mitchells method of highly personalized service, a philosophy the CEO detailed in his 2003 book, Hug Your Customers: The Proven Way to Personalize Sales and Achieve Astounding Results. “The employees were obviously nervous. Many of them have worked there 15 to 30 years. We need to get the people working for us with us,” Mitchell explains.
Mitchell’s travels usually take him for a few weeks a year to Italy, where 70 percent of his store’s offerings, such as Zegna and Armani, are produced. This year, however, Mitchell has been commuting cross-country on commercial airlines three weeks a month. He will stand at the door and greet customers with a Wilkes sales associate, spend hours in tailoring the staff’s approach, and focus on imparting management knowledge to his nephew Tyler, who has moved to the West Coast to oversee daily operations. In the meantime, Mitchell’s side gig as a $33,000-per-appearance corporate speaker on employee and customer engagement is on hold. Says the executive, “It’s a marathon. It is not going to happen overnight. It’s a lot of traveling back and forth, but we would not have made this move for my family if we didn’t think there was opportunity for us.”
Bottom line on travel: “[Our employees] are the ones with the personal relationships with the customers that drive the business. We have taken a lot of time to tell them we care about them,” Mitchell says.
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