CEO Farewell Message
For those of you who know me well, I don’t beat around the bush. So, to cut right to the chase, come January 2021, I’ll be retiring from my role as CEO, president and COO of Deem. This may be a surprise to those reading, but these plans were set in motion almost two years ago and we are ready. Throughout next year, I will continue to support Deem’s new and extraordinarily talented leader, David Grace, acting as an advisor only to him so as not to get in his way of leading Deem to the next level.
And to be clear, there are times when writing creates a strong sense of purpose with an outcome. This is not one of them.
However, I DO compose this blog with an emotional combo platter of excitement, anxiety and reverence. Excitement for Deem’s future and anxiety for being less involved with something deeply important to me. And, with reverence for the Deem leadership team, the employees, customers and partners of Deem, and in equal measure, Enterprise Holdings, our parent company, and its leadership team.
But more of that later. Let’s focus first on the present and the hopeful future state of travel technology.
Unless we are reading our spreadsheets upside down, the global pandemic has clobbered the travel industry. Clobbered it. Layoffs across service providers and travel management companies are commonplace. Reading of our colleagues’ status on LinkedIn is heartrending.
All of us understand the depth of the economic calamity and the pain this has brought to the hundreds of thousands of people across the industry. Sadly, at this moment, the momentum of the virus is accelerating, not subsiding.
The providers of travel services, be they airlines, hoteliers, or restauranteurs, are doing their absolute best to manage employee needs. They can’t afford to keep people employed, they must shift to online ordering of services like dining, and rethink their strategies for touchless interaction.
They are also struggling with finding the right balance of virus-safe rules for patrons, managing the individualistic tendencies of some people who want to make their own rules, and dealing with the impact those rules have on long-term brand equity.
Travel management and travel technology companies (software, content distribution, pricing, booking, revenue maximization) are not only dealing with a collapse in their revenue streams, but an acceleration of the industry transformation that should have, frankly, been done long ago.
But before we talk about transformation, we should mention the very real needs demanding attention right now. These include dealing with technology roadmaps that are being upended to include Covid-19 and safety considerations. To cite an example at Deem, we changed our software platform in 90 days to enable travelers to view in the booking flow real-time safety levels in cities as they make hotel choices, safety measures in ground transport, and masking and other safety protocols while traveling on airplanes.
Our engineers already had a long list of enhancements and customer commitments scheduled, so this change had significant ripple effects that needed to be managed. We had to add to the roadmap without failing to meet our existing promises to partners and customers.
Our parent company, Enterprise, and other mobility providers needed to quickly adjust cleaning methods and accelerate plans for touchless entry. Hoteliers, airlines and restaurants were all faced with the same challenges.
Transforming the travel industry
It’s become pretty clear to me that humans don’t evolve and transform unless confronted with a crisis so extreme that we have no choice but to break from the status quo and change our context.
A mentor of mine once said, “The path to heaven is on a route only through hell.” I’ve found that to be the case time and time again. The business travel industry is in hell right now, but I view that as a vehicle that transports us to heaven.
The challenge creates an opportunity to transform and come out better and stronger on the other side. The industry was hammered by SARS and 9/11 and we came back. We will again.
It isn’t a surprise that technology is playing a bigger part in our industry every day. The bigger change is the rapid acceleration – by perhaps 10 years – of business model and technology modernization that we, as leaders in the business, could have embarked on long ago.
I’ll illustrate through a personal anecdote going back to 1983 when I was on the Macintosh team at Apple. Steve Jobs would often walk the 20 feet from his office to my cubicle and, aside from a range of comments that I can’t repeat here, would hammer the team on the Macintosh packaging and user manuals. (I was responsible for the former, in addition to a long list of other things.)
Finally, after making expensive changes far too many times under an extremely tight deadline, I tried a different approach: I simply asked him why this was so important. He said, essentially, “Your job is to stop the phone from ringing. That's because if the phone rings, any gross margin on the sale of that computer would be wiped out.”
In effect, we needed to sell millions of computers in a way that our customers would be able to figure out how to use them on their own, with no other human intervention. This sharpened our focus and made it easy to make decisions that met the first principle: Don’t make the phone ring.
Well, the business travel industry didn’t get that memo.
Up until the pandemic, the notion of travelers not calling an agent or having technology remediate problems without human intervention was not part of the industry’s collective thinking. In many cases, it was actually frowned upon. Why? Because the whole industry was based, historically, on humans helping other humans travel. And many business models were built on paying for that human interaction.
Contrasting this with the modern internet platform economies, I’ll pose a simple question: When was the last time you called Facebook? Or Netflix? Or Apple? The answer, more often than not, is likely “never,” “never,” and “never.”
Thus, business travel technology is now forced into an accelerated transformation that mimics what we’ve experienced for a long time in our consumer technology lives. Software and technology that seems to be invisible. Software and technology that allows self-service. Software and technology that anticipates needs and automatically personalizes an experience and solves problems. Software and technology that’s with us always, that is, mobile-centric.
This is now a requirement for survival as the economics of a human-centric mode of reservations, problem solving, and remediation simply isn’t economically viable in the age of Covid.
What the internet and platform economy has also taught us is that anyone who sits between the buyer of the services (in this case the traveler and their company) and the provider of the services (in this case the airlines, hotels, and mobility providers) must add value or run the risk of being disintermediated and eliminated.
If a brick-and-mortar fulfillment business (in this case, the TMC) doesn’t provide unique value to a shopper in a transparent, authentic way, then the shopper will buy direct, online, and the fulfillment business will be eliminated.
If the distributor of goods and services (in this case, the GDS) cannot make all the goods and services available to the buyer that they can find through other sources, then the distributor will be eliminated.
If the provider of software to book travel (in this case, the online booking tool) cannot offer a frictionless, transparent and broad choice of content to the traveler, then the software provider will be eliminated.
In sum, all of us must add value or face the laws of Darwin.
The business travel industry needs to move on. Get with the program. Look forward, not back. Embrace the future. Be objective and brutally honest about our purpose and add value. If we don’t, the market will deliver us a healthy whipping.
The rest of the consumer tech world has embraced the notion of the transparent, personalized, consumer-centric internet platform economy in the palms of our hands. Let’s do the same.
Nearly five years ago, I’d just completed a leadership role in a firm that had concluded a $4.5B exit and was happily prepared to enjoy retirement when two good friends and venture capitalists, Pete Thomas and Krish Panu, reached out.
Pete, who has, sadly, since passed, was a dear friend of nearly 30 years, from our Intel days when the microprocessor was just being invented. Krish is a powerful force of nature and a very successful entrepreneur in his own right. They had made an investment in Deem about 18 months earlier and wanted to know if I could lend a hand transforming the business.
After a few months of consulting with the company and assisting in raising funds, I agreed to come on as the president and COO, and eventually became CEO. My reasons for choosing to leave retirement and get back into business combat were four-fold:
- Technology in business travel was at least a decade behind the tech we use in our consumer lives and Deem had the potential to change all of that;
- Deem employees, many of whom had been with the company nearly 20 years, deserved a win for their passion and dedication;
- Customers wanted us to win;
- It would be a huge challenge to achieve the first three reasons.
We had the opportunity to become a part of the Enterprise Holdings family nearly two years ago. We knew the unmatched quality of the EHI brand, its employees, and the company’s financial resources would allow us to fulfill our mission at a faster pace than we could achieve alone. As a part of that transaction, I was asked to stay on for two years to make sure we could meet our business goals, ensure our strategic imperatives had continuity, and create and implement a succession plan that would keep the energy level high after the transition.
During those two years, we doubled the size of our workforce, created an innovation center in Ireland, hired four senior executives on the leadership team and embarked on our most aggressive new technology development in a decade.
We’ve also signed more new customers, both direct and TMCs, in the last two years than we have in the prior 10, despite Covid and including some of the largest travel buyers on earth.
Despite the pandemic creating untold losses in society and across the globe, and business travel essentially screeching to a halt, we did reach our goals, albeit a bit more slowly than planned. Shortly after I officially leave my role as CEO at the end of January, you’ll see the results of our technology developments and marketing efforts. I am so proud of what the team has done.
It’s hard to know which of our operating departments I’m most proud of, as they’ve all upped their game and executed exceptionally well.
The last remaining milestone was the hiring of David Grace, my successor, a bit less than a year ago. David joined us from Enterprise and was a key part of the diligence team that recommended the acquisition of Deem. He ran the sales and customer-facing departments at Deem for about six months, and most recently ran our product, IT and engineering teams. This has given him nearly a year to learn by leading and ensures that our momentum will continue unabated.
A bit about David: While he’s spent more than 20 years at Enterprise (always in business travel), he came to the company from elsewhere. Thus, he has a far broader aperture on the business travel market than his EHI experience alone.
I consider him a maverick and I consider Deem to be the same, so the cultural fit is tight. He’s intelligent, thoughtful, leaves his ego at the door, cares about our employees, works like crazy, and is fun and a pleasure to be around.
In short, he’s ideally suited to take Deem to where it needs to go long term. David has skills I wish I possessed, and in those areas that are new to him, he’s supported by the exceptional leadership team we’ve built at Deem. David is a good egg, a solid person and someone you can count on.
On friends and family
The leadership role of any CEO, particularly one where a company is in transition, includes the difficult choice on how close to hold your team as friends or as colleagues. The more one tilts to friendship, the more difficult it becomes to make hard choices, provide tough feedback, make decisions on compensation, or drive everyone to be on the same page. But the more the team is composed of simply colleagues, the more things become less personal and, well, just a job.
Over the past five years during the transformation of Deem, we’ve had the appropriate share of near-death experiences, capital limitations, projects that didn’t quite make it in the way we expected either technically or from a sales perspective, customers more disappointed than anyone would want, and colleagues who moved on, with regrets on both sides.
However, most importantly during these five years, we kept moving despite the challenges. We never gave up and demonstrated a perseverance and a will to succeed.
The company continues on its journey to excellence and is serving its customers better than ever, building exceptional tech, teaming well, even when faced with remote work, and building a robust and enduring culture. We sit on the cusp of transforming travel just as we envisioned long ago.
This was achieved, I think, because our employees became connected to the business and to each other as friends with a shared purpose. Mostly, the Deem team didn’t want to let down each other or our customers, with whom we became friends as well. We became a family, sharing a common goal, and thus a purpose and drive well beyond simply collecting a paycheck.
In short, disruptive companies don’t succeed if their employees are just doing a job.
I could go on giving examples of all-nighters, weekends dedicated to solving technical and customer problems, wedding nights interrupted to sign time critical documents, video calls from dawn into the night, and our leaders traveling around the world to visit the teams in Dublin and Bangalore, working 24/7 for months on diligence requests and acquisition details.
We had spirited conversations on the product roadmap, members of our leadership team upended their personal lives to relocate from the mid-west and east coast to work in Silicon Valley, and constantly we dealt with too much to do with too little time and resources.
The team balanced 80-hour work weeks with kids and parents with severe health issues, amplified during the pandemic (like many of you,) all the while looking forward, being positive and treating each other more gracefully than not.
While I am leaving as CEO and assisting David in the background through 2021, I consider all of the Deem team as friends and I’m grateful beyond words for the passion they have applied to their contribution. I’m inspired by the management team and their people, and all that they have taught me about how to improve as a leader. I’m grateful for all they have contributed to our industry, with passion, with selflessness and with creativity. Thank you all.
The ride, drive and plane flight ahead
At the moment, there is plenty of information and news in the world that could cause us to be pessimistic, perhaps frightened, and just plain worn out. The rancor of the political system in the United States, climate change, racial, gender, economic and other forms of persecution, the tragedy of the worsening global pandemic, and the personal and financial pressures they all contribute to our collective being are simply overwhelming and could become debilitating.
However, there have been historical challenges that we’ve faced as humans that could be described as worse. These historical challenges existed in a backdrop lacking technology and massive financial resources. Globally, we have far more skill to deal with such issues than before. Whether we have the collective will to come together remains to be seen and time will tell.
Thus, as my relationship with the industry changes, I leave you with a request: transform, embrace the process, and keep the hope that we will get through this and we will emerge better, stronger and more prosperous than we were before.
Make the positive choice to change, not the negative choice to stay the same and wallow in the challenge. Get on the horse and learn to ride better and faster. Keep hope alive – I’ve found hope to be a very powerful motivator.
Thanks to all of Deem’s customers, partners, investors, and most of all, our exceptional employees who have made this more than a job. I owe you all my thanks and gratitude.
John F. Rizzo