- Programme: Accelerated Development Programme
- Nationality: American
- Job Post-programme: Chairman Gallifrey Foundation, Travel Sentry & Okoban SA
The power of consensus
Airline industry expert John Vermilye has always excelled at solving operational problems. But it was when he learned how to bring people with him that he really started to have an impact.
From operations with Eastern Air Lines via the International Air Transport Association (IATA) to successful entrepreneur with his innovative luggage security company Travel Sentry, John Vermilye has charted what he calls a three-phase career and at the age of 62 he’s now ready to enter his fourth phase.
And that fourth phase - supporting more effective approaches to the world’s major challenges, in particular environmental – most clearly embodies what he sees as central to his life’s work so far. It’s about bringing people together to share common objectives and take the best path possible to achieve their goals.
“If I were to draw lessons from my first three phases – airline, NGO, entrepreneur – it’s the value of being in a central position either in a trade organisation or the headquarters of a company, and using it to create a win-win-win,” says Vermilye from his office in Switzerland with views of Lake Geneva and Mont Blanc. “It’s far better to come up with a solution that benefits everyone than the typical business model that pitches people head to head.”
Ready for take off
Vermilye, who grew up in Florida and Washington DC, is used to working having left home at the age of 15 and funded his way through high school and university. His first job in the airline industry was baggage handler. He went on to become a manager for Eastern Air Lines in 1980 and developed a role as a “Mr Fixit”. He’d be parachuted into an airport that had a problem and help to sort it out by changing the procedures or staffing. Or he’d be given a business opportunity and told to build it up, make it happen and then pass it on to other people. When he joined IATA in 1988 it was the same thing but on an industry level.
What crystallised his work experiences for him was his time on the Accelerated Development Programme (ADP) at London Business School in 1995. And while Vermilye has topped up his learning with subsequent LBS short courses in finance and marketing and drawn inspiration from the School’s entrepreneurship conferences and Global Leadership Summits, he still remembers the key things the ADP taught him some 20 years on.
The words of course leader Professor Costas Markides rang particularly true for him. “He has this charming way of asking “Why?”” says Vermilye. “That really resonated with me as it was my job up to then, to go in and look at something and ask: “Why is it the way it is? And how can it be done better?” And if you just focus on that it will lead you to create better businesses and better solutions.”
Ways to improve
But the biggest impact came from the personal assessment and critique that’s involved in the course of two sets of two-week modules. Each person on the course had gathered 360-degree evaluations from their peers back at their company. When they got on the course they were put into groups of four to analyse the responses.
“You work very intensely with your group looking at these evaluations and there’s a level of trust there,” says Vermilye. “It was really a matter of taking time out to look at the negatives, to give yourself that hard stare in the mirror and come to terms with how you are perceived by others and think how you might have done things better.
“What was clear for me was that I was good at driving towards an objective but I wasn’t being effective enough in bringing people along with me. I was good at aiming the torpedoes straight ahead rather than pausing to say: “We need to go into battle, this is why, and are you with me?”
The hard stare in the mirror had its desired effect. Vermilye returned to a series of promotions at IATA moving from director to senior director, vice president and senior vice president. And the trade association was the perfect place to try out his more consensual approach as his role revolved around bringing in multiple stakeholders and taking them along on a path of unanimity.
Perhaps the biggest test came with the Y2K project. Vermilye set up a war room in Geneva to manage several hundred airlines, 2,000 airports, and more than 227 air traffic control authorities to make sure they were operational through the switch to the year 2000.
In the pilot’s seat
It was after this experience that Vermilye thought the time was right to launch his entrepreneurial ambitions with a venture called Intiex. With one partner and a VC backer he set out to create a clearing house for electronic tickets so people could travel between multiple airlines, something that didn’t exist at the time. The idea was sound but then came the 9/11 attacks on the World Trade Center and the airlines, which were Intiex’s development partners and customers, cut back on their projects. Vermilye knew he’d lost any first mover advantage on the idea and taking to heart the message of LBS Professor John Mullins’ book Getting to Plan B about knowing when to change tack and when to fold, he shut down the company.
“It was quite a knock back,” says Vermilye. “Financially but also from a sense of “What comes next?” I’d gone from running something that I really believed in and was passionate about to winding it up.”
But from disaster came opportunity. Vermilye was asked to give advice to the US Transportation Security Administration (TSA) on how to manage US airport security after 9/11, which involved reconfiguring 452 airports at once. One issue that came up was the need to carry out security checks on luggage that had been checked in, which meant opening bags without breaking them and they developed a key ring with about 50 of the most popular keys for luggage.
But this wasn’t a perfect solution, “I brought in the Travel Goods Association and introduced them to the TSA and said this is what’s being done, it’s not ideal, you need to work together and refine it,” says Vermilye. “The government decided it wasn’t in the business of making locks. The TGA didn’t want to either. So they asked me to do it.”
Setting a standard
It was a helping hand into a new phase of entrepreneurialism that was to be hugely successful. From this came the idea of a global standard for luggage locks and Vermilye’s company Travel Sentry which started in 2003 and currently has 350m approved locks on luggage in use today. The symbol of a small red diamond on the lock shows that it is a Travel Sentry approved lock, which can be unlocked and inspected by security authorities without damage. Each lock has a code that’s used by security agencies to know which tool to use to open it.
To get the concept off the ground involved consensus building between disparate groups – air travel security agencies, major luggage brands such as Tumi, Rimowa and Samsonite, and OEM lock manufacturers most of whom are in China.
Vermilye worked alone for six months (whilst also juggling another commitment he had as MD of a two-year project in Atlanta, Georgia), before bringing in former colleagues and at one stage, even his brother. While there was some technical design work involved, the company doesn’t make or sell anything, so the project revolved around setting standards.
“The greatest challenge isn’t the operational work,” says Vermilye. “It’s establishing a consensus, holding that consensus and keeping everyone informed and in agreement.” In a sign of Vermilye’s success, the Travel Sentry system has now been adopted by countries around the world, covering half of the world’s airline traffic.
The company employs just a dozen people spread across the US, Europe, China, Japan and Hong Kong with each person fundamental to nurturing the relationships it needs with partners. It’s an efficient model that Vermilye says shocks almost everyone he talks to, but underlines the importance of building an organisation based not on some theory but on requirements and needs.
Now ingrained into the global travel security system, Vermilye believes the company has considerable growth ahead but he will be stepping back from day to day management. He’s bought out his minority partners who were ready to retire and has brought in a new management team to free him up for the fourth phase of his career.
Putting efficiency first
The fourth phase is one that will require more of his consensus building approach and that follows on from major philanthropy projects he’s initiated at London Business School. In recent years he and his wife, Antoinette Stagnetto Vermilye, have funded projects designed to help the leaders and managers of not-for-profit organisations and NGOs to become better managers by using the best business skills available.
They’ve backed the Gallifrey Scholarship for Social Enterprise, which supports an MBA or Sloan student coming from a not-for-profit background. They fund an internship for an LBS MBA student to work at the not-for-profit Turquoise Mountain set up by LBS alumna Shoshana Stewart, MBA2013. And they support Professor Rajesh Chandy’s research into microfinance through the School’s Deloitte Institute of Innovation and Entrepreneurship.
Meanwhile Vermilye and his wife are heading to Cambridge, Massachusetts, for a year at Harvard University with other prominent philanthropists as part of its Advanced Leadership Institute. Aware that in the world of environmental conservation there can be too much duplication of effort by albeit well-meaning groups, they will be looking at the single issue of plastics in the ocean and trying to find a solution.
“It’s about taking those principles of a central position and win-win-win and trying to help everybody move the needle and solve the problem faster,” says Vermilye. “We are looking at a concept of bringing all of those players together – marine organisations, universities, governments – under a charter that would encourage forward planning and sharing of research results to avoid duplication of work and make the whole task more efficient. And efficiency is the key to everything.”
John Vermilye’s recommended reading:
Superforecasting by Daniel Gardiner and Philip E Tetlock – it’s all about challenging our pre-conceptions of things and looking at things from different angles. We’re not comfortable doing it, but you have to if you are going to make a difference.
Zero to One by Peter Thiel with Blake Masters – this speaks to what we’ve done with Travel Sentry. We’ve gone from no system, no market, to being the dominant number one by providing a standard that everyone can aggregate around. I believe that’s the way ahead.
Getting to Plan B: Breaking Through to a Better Business Model by John Mullins and Randy Komisar – this was another strong message from my ADP course: Don’t just follow the same path uncritically; challenge yourself continually.