JAMIE PHEROUS: WHY IT PAYS TO KEEP THINGS SIMPLE

Written on the 17 June 2016 by Laura Daquino

JAMIE PHEROUS: WHY IT PAYS TO KEEP THINGS SIMPLE

JAMIE Pherous, founder of Corporate Travel Management (ASX: CTD), believes 'keeping things simple' has allowed him to transition from accountant to literal high flyer.

The former accountant says his days travelling for Arthur Andersen, now Ernst & Young, specialising in financial consulting across Australia, Papua New Guinea and the United Arab Emirates informed the business he's operating today.

While founded in 1994, Corporate Travel Management is still in its growth phase. Five years ago the company operated in four Australian cities, and now, operates in 83 cities around the world.

Pherous believes he owes a lot to his former life.

"Arthur Andersen was an ambition ministry where if you worked hard they had really great development," he says.

"They were great at empowering people to make decisions, a big company who looked to the small. But they also made you feel you were better than everyone else, which I would say is at odds with the collaboration and teamwork in our business today."

Corporate Travel Management is experiencing client engagement and satisfaction at record levels, according to internal company metrics.

From the get-go Pherous knew the old way, where there were four corporate travel companies 'operating like call centres and just pushing cheap flights', couldn't fly forever.

"I left a great paying job and took a huge punt - everyone thought I was young and dumb, but I just wouldn't listen," he says.

"I had a really strong belief it was a trillion-dollar market in the world.

"I started though with no brand, no buying power, no supplier relationships. At that time, I was living in the western suburbs and drove down Coronation Drive and saw a huge Flight Centre billboard with their cheapest fare for the week which freaked me out so much I would actually go the long way to work."

Now Corporate Travel Management ranks among Brisbane's best performing public companies with a $1.43 billion market capitalisation, only a couple of rankings away from Graham Turner's Flight Centre Travel Group (ASX: FLT) at $3.18 billion. 

Pherous says the best thing Corporate Travel Management did was become a listed company in December 2010. It listed at $1 per share with a market capitalisation of $70 million through an oversubscribed IPO.

"As we got bigger, our clients got bigger, and they wanted to be locally serviced," says Pherous.

"We would go to a bank - but had no assets - and buy a business maybe worth $1 million that would cost us $5 million and they wanted us to pay them back in five years. We weren't really winning."

Corporate Travel Management decided to set up 'beachheads' in different countries and used these as anchor points to make further acquisitions.

Pherous says everyone over-engineers business, while he keeps it quite simple with his morning ritual.

"You need a simple business model. We run our business on five things, everything else is white noise," says Pherous.

"First is customers, then attracting and retaining and developing people. The glue that keeps that together is innovation and process. If you get those three things right, profit tends to fall out the bottom.

"I look at client wins, clients at risk pipelines, revenue as a function of productivity and innovation, and soft metrics of staff engagement and client satisfaction every morning.

"That's all I care about, there's simply nothing else I care about in the business - as a fast-growing company, you need to keep it that simple. If it doesn't fit our five criterion, I ask our people why they are doing it."

Pherous, who took a salary of $403,982 last year, says half of his bonus is tied to client satisfaction. He has only four direct reports and believes this is key in leveraging the company, affording him the role of a forward-thinking executive 'whose head is just in FY17' as he oversees a flat business structure.


Author: Laura Daquino Connect via: Twitter LinkedIn

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