Graham Turner: Flight Centre

People Power

Day-to-day, Turner says his time is spent liaising with senior management teams across the country—“to make sure things are working across the brand”. He instils a decentralised management structure, so each management head is responsible for the hiring, firing, and decision-making of their own department or team.

Although he doesn’t talk effusively about them, it’s clear that staff are a high priority, and he ensures his senior managers put a lot of effort into benefits to encourage staff not only to stay but also to thrive in the business. “It’s not just about pay, it’s about personal and professional development. While it’s clearly not a democracy, we need to have staff feel like that have input.”

After talking to one of the FCL’s employees, it’s clear that Turner is a “pretty big deal” within the company. Not that you’d know from talking to him. He’s very matter-of-fact about the business, its past and future, ups and downs, as we chat while he walks from one meeting to another. According to staffers, he has created an egalitarian culture where there are no special privileges unless they apply to everyone, there are no individual offices or secretaries, and even the boss himself only has the one phone.

It’s not a culture that works for every business, Turner admits, but it’s certainly one that has been recognised around the world. In March this year, for the sixth year in a row, Flight Centre made The Sunday Times ‘Best 100 Companies to Work for List’, the only company to remain on the list since 2002. As the 51st best company to work for in Britain, Flight Centre also received a Two Star Accreditation, similar to the Michelin Star type of award.

According to Lin Hilditch, head of Flight Centre’s recruitment, the feedback from employees helps to ensure they are continually improving the working environment for staff. Part of this comes from the fact that team leaders, the store managers, get a 10 to 15 percent share of the profits from the store they run, with an option to buy another 20 percent share of the business. “Our employees clearly appreciate this along with our innovative and unique approach that rewards hard work through an uncapped incentive scheme,” Hilditch says.

Another benefit praised by many experts is the access to independent financial management advice (at FCL’s cost), a Healthwise program that offers free health checks to staff, and the fast-track to management training scheme. These innovative schemes drive team members to achieve more within their own store, and in their own personal development.

Ideas In Action

Innovation is another key driver for success, as with any business. For FCL, technology is a significant part of that, especially with the online presence, but Turner thinks innovation comes down to common sense. “A lot of innovation is moving away from a conventional way of doing things because that’s how it’s always done, to more common sense. And a lot of our innovation comes from the staff at the frontline.”

One example of this was as simple as changing the standard way a refund was paid to a customer. Standard practice was to pass a refund on to the customer only after it was paid from suppliers. It was taking staff more time to follow up on slow-paying suppliers and liaise with and placate increasingly irate customers. After staff suggested it would be better to pay the refund upfront and then chase up the suppliers, the whole refund system was overhauled, resulting in happier clients who are more likely to return.

One of the group’s new offerings, Flight Centre Group (group travel specialists) in NSW will be the evolving model for future groups, including elements such as how the office is run, the contacts, and so on.

And while the internet is crucial for most modern businesses, Turner says FCL’s focus hasn’t been on the online model. “We do offer it but we are not big players. There are complex areas of travel arrangements that can’t be offered online, and we tend to focus on selling more upmarket ‘non-air’ products.”

Despite his successes the last 30-odd years have certainly not been without challenges. One of the biggest, the events of September 11, had a crippling affect on the entire industry. And as companies like Ansett (and its subsidiaries, like Traveland) crumbled, the whole travel industry took a massive hit. FCL survived these ‘blips’, by focusing on value for money. “You have to supply good value service and good value products and you’ll fly through blips like that.”

He also masterminded an “aggressive” marketing campaign to drive interest in travel again, a move widely lauded as the main reason his businesses survived.

In recent times FCL has had to contend with airlines reducing and even cutting the travel agent’s commission fee out of the price of all flights, as Jetstar did when it launched in 2004. While he acknowledges the bitterness of the feud (which included Turner paying for Google searches for Jetstar that directed people to his website) he is largely dismissive of the overall impact.

He is also fairly noncommittal about the importance of relationships formed with various other suppliers: hotels, tour organisers and the rest of the industry. “It’s not unimportant,” he says. “It all depends on their perceived market power.” What is most important, he adds, is that those in the industry realise it’s all about not being able to operate without the other.