On Growth Trajectory, Travel And Transport Prepping Management Transition

Travel and Transport's new president and CEO-designate, Kevin O'Malley, is preparing to take the reins of a solidly growing and profitable company surrounded by a veteran management team. But there certainly are challenges, including a talent management crunch and lots of noise around the industry's all-too-familiar buzzwords.

The Omaha, Neb.-based travel management company on Tuesday announced that president and CEO Bill Tech plans to retire at the end of 2014. Ahead of the change, the company's board of directors named Tech chairman__a position he will retain after his retirement in December__and promoted O'Malley to president and fellow executive vice president Tim Fleming to COO, all effective Jan. 1, 2014.

"I was very fortunate the board wanted me to stay involved," Tech told The Beat. He has been at Travel and Transport for 27 years, serving as CEO since 1998. "The three of us really have run the company," he said of O'Malley and Fleming. "They both competed for the job, and it was really a tough choice for the board. We are glad that the board of directors has kept it in-house. There will be a lot of continuity."

Tech said that "it couldn't be a better time to make the transition." He noted "five record years of growth," including surpassing in 2013 the $100 million mark in new sales for the second time in company history, and three big accounts that signed in December and will amount to another $46 million in sales.

The company during the past three years increased to 50 from 30 its account management team while growing to 16 people its Partner Solutions group, which handles supplier relationships and consulting. Previously under O'Malley's leadership, the Partner Solutions group now reports to Fleming. Overall, the TMC now has more than 1,000 employees.

Meanwhile, Travel and Transport intends to maintain its strategy of essentially leaving alone Ultramar Travel Management, which it acquired in October 2012. Peter Klebanow remains president and CEO of that operation, which has grown employee headcount from 276 to more than 300 since the acquisition, according to Tech.

"We committed to them that there would be very little change," said O'Malley, who joined Travel and Transport in 1994. "They were growing 20 to 25 percent a year, and we didn't want to screw that up. There was no reason to change the brand or mess with sales, service and operations." He added that there have been almost no changes to any aspect of Ultramar's point-of-sale and mid-office tools, or customer-facing components.

There may be some behind-the-scenes integration coming, though. "About 16 or 17 months in after the acquisition, Ultramar sees that there are some tools here that will help them as they sell in the marketplace," O'Malley explained. "Some of the things that they may have third-partied in the past and where we have proprietary technology, they will start to integrate those things. But we are not going to force things. There is nothing broken here. They had their best new sales year ever [in 2013], and so did we."

The business-as-usual approach for Ultramar is how the Travel and Transport management team plans to handle this year of leadership transition. And that means navigating an industry that each year usually produces new challenges.

"What's really challenging is managing the noise and figuring out what is real and not real," O'Malley said. "We spend a ton of time asking questions. If it's Travel 2.0, open booking or whatever you want to call it, we have a lot of customers asking what it means. The answer a lot of times is we don't know yet but we are trying to figure it out."

Tech suggested that as Travel and Transport's new leader, "Kevin is going to have his hands full. Our industry is not getting any easier." He specifically referenced the universal concern around attracting new talent to the business as older members of the current workforce head for retirement. "It's an industry challenge, and certainly our challenge because we keep growing," Tech said.

To meet that challenge, the TMC is "spending a lot of time, money and effort in getting the next generation into Travel and Transport," O'Malley said. "We have reopened our travel school. We started intern programs." [Travel and Transport in conjunction with the Metropolitan Community College in Omaha runs the Travel Academy.]

"We've not been good enough in telling our own story," he added. "The message now when you sit with someone coming out of college is: We are not dying; we are thriving."

Underscoring that point, Tech explained the success of Travel and Transport's employee stock ownership plan, which began in 1991. "If you compare it to the S&P, put a dollar in each in 1991, the S&P would be worth $5.34 and our stock would be like $11.37," he said. "That provides a lot of pride and ownership. Our people have skin in the game. It's one of the many reasons they stay here and one of the many reasons they feel comfortable that we are not going to be sold. Just because one guy is going to retire, it's not going to change the world."