29 Jan How Purpose Beyond Profit can be profitable
By James Thornton, Global CEO, Intrepid Group
The secret of SUCCESS is to focus on PURPOSE
Last year Mark Zuckerberg gave a speech to Harvard University that raised a few eyebrows. Instead of talking about leadership or innovation, the Facebook founder’s career advice to Harvard’s brightest young scholars was to focus on having a purpose greater than themselves.
Zuckerberg may be the world’s fifth richest person, but he’s certainly not the first overachiever to note the importance of purpose – inventor Thomas Edison, President John F Kennedy and actor-director Angelina Jolie have all credited it with their success. And there is now a growing body of research to back them up. Studies have shown that that ‘purpose driven’ people are more engaged at work, earn a higher income, are 50% more likely to be a leader, and also have a higher level of career satisfaction and overall contentment.
Purpose not only benefits individuals, there’s an increasingly strong case that it leads to success in business, with one study showing that purpose-led companies enjoyed growth rates nearly three times that of their industry.
It would be easy to dismiss Purpose as just another buzz word or a passing fad for big consumer brands in America, like Facebook or Patagonia. But it would be a mistake to ignore the impact that individuals and the small and medium-sized businesses in the tourism industry can have on the world.
Last year was the UN’s Year of Sustainable Tourism Development, so it’s ironic that we’ve seen so many bad news stories. From protests in Barcelona and Venice to cruise ships polluting our oceans. It is especially clear that at present we cannot rely on governments to fix things. We require individuals and conscious businesses to stand together and to show that there is another way.
That’s why I’d like to share the experience that Intrepid has had since we put Purpose at the core of our business. It is increasingly evident to us that having a Purpose Beyond Profit can actually be quite profitable. It’s also increasingly evident to me that discovering this sense of Purpose has made me a better leader. This is what we’ve learnt:
It all starts with Why: people commit to Purpose, not companies
Intrepid didn’t start out with plans to be the world’s largest adventure travel company. Our story began in 1988 when two friends from the University of Melbourne, Darrell Wade and Geoff ‘Manch’ Manchester, travelled from London down through Africa in a converted old garbage truck. Along the way, the two of them talked about creating a style of travel that could benefit both travellers and the places and people they visit. Of creating a more immersive local style of travel that would show people the world as it truly is and ensure that more a larger share of the money generated through tourism stays in local pockets. The idea of a style of travel that could contribute to making the world a better place was inspiring, but Darrell and Manch had no experience in the tourism industry and no idea of what they were doing. In fact, their first business plan had Intrepid donating money to local projects before they were even turning a profit.
This vision that Intrepid could be something bigger than just a travel company helped to grow the business quickly. It fuelled the commitment of our staff and travellers to do more, making Intrepid the first travel company in the world to have a dedicated Responsible Business department, and in 2002 we started our own not-for-profit, The Intrepid Foundation to encourage travellers to give back to the places and people they visit. Since then, we have raised over $5M for more than 100 local and international charities in more than 30 countries.
For me, it was following my passion for travel that led me to making a career change to join Intrepid, but it’s this underlying sense of purpose that has kept me at Intrepid and inspired me to progress through the business. To be successful you have to love what you do.
Sustain your PURPOSE by finding others who SHARE IT
Mark Zuckerberg has spoken of one of his most difficult moments at Facebook as being when his advisors and management team wanted him to sell the business, while he was still working towards a vision of connecting the world.
As Intrepid grew from those early years into a global multi-brand business, we’ve also learnt that it’s crucial to find others that share your Purpose. In 2011 Darrell and Manch entered into a partnership with TUI Travel, the biggest leisure travel company in the world. The business instantly more than trebled in size – but we soon realised that this was not a perfect marriage: Darrell and Manch are two entrepreneurs from Australia. TUI is a FTSE 100 listed company, with a focus on short-term quarterly profit delivery. It was clear that we had a fundamental difference in philosophy, so in 2015 we agreed on a shareholder split that saw Intrepid once again become an independently-owned business, but one that is now made up of five tour operator brands and 20 local destination management companies.
The split turned out to be one of the best things that has ever happened to us, because it reminded us of why Intrepid was started in the first place – and that is to, change the way people see the world.
For me, it was a reminder that to sustain focus on our Purpose that we must bring others with us, by choosing who we work with but also by clearly communicating it. That’s why after the split our newly independent global business put together a 2020 strategy which has just two objectives: Growing the market for Sustainable Experience Rich Travel and operating a business that as a Purpose Beyond Profit. In 2016, our first year of independence we delivered record sales, and a record profit! We backed this up in 2017, growing our global business by 17% and delivered a record underlying profit result, beating 2016. This gives me the confidence that two and a bit years into independent ownership, our two strategic aims not only work – but they are indelibly linked.
Where there is a CLASH between Purpose and profits, CHOOSE Purpose
There’s a certain amount of green-washing in the tourism industry, but to truly be a Purpose-led business you sometimes need to make tough business decisions to pursue Purpose over profits.
One of the biggest tests Intrepid has had of our commitment to Purpose was our decision to end elephant riding on all our trips.
The Intrepid Foundation had been a longtime supporter of World Animal Protection and in 2010 we agreed to fund their research into wildlife venues in South East Asia. A specialist veterinarian inspected 118 entertainment venues and found that only four passed the basic standards of animal welfare. The research also showed that elephants could never be domesticated and had to essentially be tortured to accept people riding them. What’s more, demand from tourism was fuelling the poaching of elephants from the wild.
The dilemma that we had was that travel to South East Asia made up 40% of our business at the time and elephant riding was considered a must do. We knew that the decision could give other tour operators a competitive advantage, so it wasn’t an easy decision, but deep down we knew it was the right one, so we started to work with local operators to phase out elephant riding and by 2014 we had removed them from all trips,
becoming the first global tour operator to end elephant rides.
We announced this decision through a blog post – This is why we no longer ride elephants – and the response was phenomenal. Worldwide media coverage in The Financial Times, BBC World, and Sky News that still continues. Three years later that blog post is still the most shared piece of content we’ve ever produced. World Animal Protection was able to use the positive response we received to persuade more than 180 tour operators and TripAdvisor to follow in our footsteps. And our sales to Thailand didn’t suffer – in fact, they grew.
For me, it was a lesson in creating shared Purpose with our customers. That if you do the right thing and then clearly communicate why, that the customers who have always supported you will continue to do so. But even more than that, that you’ll find new customers who share your vision. The decision to end elephant rides has helped to build our brand globally, but it demonstrated to us that there can be a real business value to doing the right thing.
We’ve continued to stand up and have a say on things we care about, such as Climate Change, Trump’s travel ban, and Same Sex Marriage. We know that we may lose customers along the way, but if we focused on the customers we might lose we couldn’t truly be Changing The Way People See The World.
Pursue Purpose and you’ll discover new opportunities for growth
One of the two key goals in our 2020 business strategy is to grow the market for sustainable experience-rich tourism. That goal of disrupting the mainstream tourism industry with sustainable tourism has resulted in the launch of our new adventure cruising product.
We all know that in recent years cruising has been one of the fastest growing sectors in the tourism industry. But big ships really are the absolute antithesis of what the Intrepid Group does. The sector is in the spotlight on issues like pollution and on over tourism. In Dubrovnik cruise ship travellers are being called ‘ice cream tourists’ by locals because they’re overcrowding the UNESCO World Heritage City but that’s all they’re buying.
We want to offer travellers a more sustainable alternative. So last year we launched our first Adventure Cruises using small ships with no more than 50 travellers on-board, enabling travellers to visit the small ports that big ships can’t get to and explore little-known towns and villages. As always, we carbon off-set each and every departure.
We might be a big player in adventure tourism but we really are tiny in the cruise sector – this year we had just one charter trip with seven departures. However, we managed to make the New York Times What’s Hot List and the cover of The Guardian with our new range. How? I believe we are making a splash far beyond our size by loudly shaking up the conversation on sustainability.
Our 7 departures were 94% full, and the goodwill we’ve received has shown us once again how much travellers want businesses to do the right thing.That’s given us the confidence to expand to 10 charter destinations for 2018/19 with 40 departures, and that growth has given us the commercial clout to ban single-use plastics from our charter boats.
For me, it’s demonstrated again that Purpose Beyond Profit can be profitable, but also that the more we grow, the more we can do.
Travel is now one of the world’s largest industries – it’s made up of small businesses – but we’re all connected. I believe that by growing together and having a purpose we can have a greater influence on our planet and people.
But it is an industry that only exists because as humans we want to see the world’s natural and cultural heritage for ourselves – from the Arctic of the North to the Great Barrier Reef down in Australia is at critical risk from climate change and biodiversity collapse. The dilemma is that the growth of the travel industry means a decline in what we most need to protect.
We’ve seen for ourselves that it doesn’t have to be a choice between Purpose and Profitability.
So let’s work together to tackle the big issues, to use our roles and our businesses for making more than just money – and make the world a better place for everyone.
James Thornton, Global CEO, Intrepid Group
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