Friedrich Joussen from Tui: “When teams are under pressure, people stand together and fight”
When Friedrich “Fritz” Joussen started at Tui in 2012, he was attracted by the challenge of joining a company in crisis.
Activist investors pushed for the ailing travel group to be wound up, cost cutting was needed to offset an austerity-inspired sector slowdown and the long-discussed merger of Germany-based Tui AG and its British sister tour operator Tui Travel had repeatedly failed to take off.
“If you don’t have a crisis, if you don’t want to change . . . They don’t need executives,” Joussen said on the eve of his final board meeting as CEO from the company’s headquarters in a sleepy business district in the German city of Hanover. “Nevertheless, I thought it would be the biggest crisis of my career.”
At the end of September, Joussen left Tui after almost a decade with the company – most of it in the top job. In person he cuts an imposing figure at 2m tall, but his size is offset by a big grin and relaxed demeanor.
Joussen grew up in a middle-class family of five in the German port city of Duisburg, a coal mining and iron and steel industrial center, where his father worked as a legal advisor for the steel company Thyssen (before its merger with Krupp). In his youth he was an academic. He attended the Landfermann-Gymnasium, one of the oldest schools in Germany, the origins of which go back more than 450 years.
Within his first two years at Tui, Joussen had completed negotiations for the stop-start merger, creating what remains the largest tour operator in the world, employing more than 70,000 people at its peak (now almost 40,000 people).
But he reckons his greatest legacy will be simply keeping the company afloat when the Covid-19 pandemic hit. “Regulation brought our business to zero,” Joussen recalls. “In my career, running a business with no revenue has been the hardest part I’ve ever been in.”
In the three months to the end of June 2020, Tui recorded sales of just 75 million euros, 98 percent less than in the previous year. For the entire financial year, the company posted a loss of 3.2 billion euros. It only survived thanks to 400 million euros in cost savings and almost 5 billion euros in bailout loans from the German state. Just this year, the company reported its “first broadly balanced quarter post-pandemic.”
Joussen was replaced by Sebastian Ebel, Tui’s Chief Financial Officer, whom Joussen first met when he ran Vodafone’s Germany division.
Joussen was on vacation in the Caribbean in January 2020 when he first heard about the novel coronavirus and ensuing lockdown in the Chinese city of Wuhan. However, he was initially unimpressed, as were Tui’s customers – January and February 2020 marked booking records.
But in mid-March, just hours before Germany closed its borders to halt the rapidly spreading virus, Joussen rallied his leadership team to ask a simple question: “How much money do we have in the bank?” that you don’t normally ask as a CEO,” he adds.
Joussen initially worked as a software engineer in the USA before moving to the telecommunications division of the Düsseldorf-based Mannesmann Group, which was later taken over by Vodafone. He then climbed the career ladder to lead Vodafone Germany.
The first half of Joussen’s career at the forefront of the booming telecommunications industry went smoothly. “It was always the next record, the next record, the next record. You just had to organize the growth,” he says.
The move to Tui was a significant departure for Joussen. He joined a loss-making company and, as a newcomer to the industry, was given a lukewarm reception by some in the travel industry.
But Joussen saw his underdog status as an advantage. “Coming from the outside sometimes has the advantage of not going into too much detail,” he says. He was able to see the merger and restructuring of the company from a “10,000m perspective,” bypassing the doubters who said “can’t do it, can’t do it.”
Since childhood, Joussen has not been afraid of going it alone. A solo trip to visit relatives in the United States at the age of just 13 is a turning point in his life, where he overcame his fear.
Peter Long, an industry veteran who first ran Tui Travel before being chairman and latterly vice chairman of Tui until last year, told the FT at the time of the merger that without Joussen the link “wouldn’t work”.
Joussen then set about revising the company’s business model. Instead of trying to beat platforms like Airbnb at their own game, he invested in hotels and cruise lines to create a vertically integrated business model. “You have to have a good strategy and then talk a lot,” explains Joussen with investors and colleagues. “You have to have good arguments.”
The ultimate proof of the success of Joussen’s restructuring of the company is that it did not meet the same fate as rival operator Thomas Cook, which went bankrupt in 2019 after 178 years of trading, he says. “Especially compared to Thomas Cook, who didn’t take these steps and came under increasing pressure from the digital competition, we did extremely well,” says Joussen.
But despite the strong position he had put Tui in, Joussen was “not sure” the company could “survive” when the pandemic hit. In the first few weeks of the crisis, he only slept a few hours a night.
His schedule was reduced to a morning liquidity meeting and an afternoon expenses meeting, punctuated by hours of phone calls with investors, banks and government ministers.
He says he only focused on the short-term and the things he could change, and learned a lesson from his chess coach in his teenage years. “If you make a move and hit the clock, the move is done,” he says. “The best way to lose a game of chess is by thinking about things you can’t change.”
Joussen credits the company’s success in managing the pandemic to the close-knit team he has forged. “Companies aren’t about systems and processes, they’re about people,” he says.
Ebel is not the only board member with many years of experience at Joussen. Three other board members have worked with him for almost two decades.
“We got out of the pandemic together,” says Joussen. “When teams are under pressure, it’s a chance to develop spirit because people stand together and fight.”
After the first wave of the pandemic, Joussen, emboldened by the support of the German state, was assured that he had ensured Tui’s survival. But he was surprised at how long the crisis dragged on.
“They wouldn’t have funded us if we weren’t a good company before the crisis. . . So the state had enormous confidence that we were a good deal and that we could pay back,” he explains. “If they had the confidence, why shouldn’t we have the confidence?” Tui still owes around two billion euros to KfW, the German development bank.
Although Tui emerged from the pandemic intact, Tui has been hit with new problems in recent months.
In March, the German government launched an investigation into the sale of 29.9 percent of Alexei Mordashov’s 34 percent stake in Tui after it was revealed that the sanctioned Russian oligarch had transferred shares to a company owned by his wife. The investigations are ongoing.
Three questions for Friedrich Joussen
Who is your leadership hero?
Lao Tse [an ancient Chinese philosopher] For me, words about leadership are the essence of leadership: “When the work of the best leader is done, people say, ‘We did it ourselves’.”
What was the first leadership lesson you learned?
One of my early managers told me that you should always keep your desk clean; second, whenever you have a decision to make, make it, don’t put it off and think about it again; and third, when you advise people to do something, only advise them when you want to do them, otherwise there is no point.
What would you do if you weren’t CEO?
I think I would be a strategic advisor as I like to think about things and do things. I have a background in software development, but I’ve never been a good researcher. I’m someone who gets 80 percent of something very quickly. But as a researcher you have to get 98 percent or 100 percent, and that takes a long time.
All summer the airline was also plagued by flight cancellations and delays, costing the company 75 million euros. Andrew Flintham, Tui’s UK and Ireland managing director, wrote to customers in mid-June to apologize for “the distress caused”. The energy crisis and inflationary pressures across Europe should also trigger a consumer slowdown later in the year, likely to rock the travel sector.
But is this challenge enough for Joussen? Not quite. “The market is normalizing and you have more normal challenges. . . As bad as flight cancellations or whatever, they say it’s more normal,” says Joussen. “And then the question is, how fit are you for a normal life?”
Joussen’s £6.4million-a-year contract was due to run until September 2025 but he left early at the end of last month but the journey back from the pandemic is not over yet. “Demand is high, but we still have debt and we still have the state as a shareholder, so there will be a couple of years where we need to fix the balance sheet,” he predicts.
And what advice does he give to his successor? “Nothing is less important, less desirable than the advice of a former CEO,” says Joussen. “Everyone does it their own way.”
https://www.ft.com/content/af66cb1e-a48b-4b2c-adcb-74b119aff4c7 Friedrich Joussen from Tui: “When teams are under pressure, people stand together and fight”