Travelocity CEO encourages intelligent risk-takingBy Aubrey Henretty
11/1/2005 - Michelle Peluso has always been a risk-taker. At the age of 15, she lobbied her way onto a plane to Moscow with a group of seasoned Cold-War journalists and proceeded to discuss American perceptions of Russians on television and radio right alongside the journalists, all of whom were many years her senior. Since then, she has been an Oxford University Thoroun Scholar, a senior adviser to the U.S. secretary of labor and the chief executive officer of two successful businesses — among other things. At 33, she says all of her successes can be traced back to one thing: passion.
Peluso, currently the CEO of online travel giant Travelocity, spoke Nov. 17 to a Kellogg School audience in the Owen L. Coon Forum as part of the Kellogg Distinguished Speaker Series, sponsored by the Entrepreneurship and Innovation Program, Loop Capital and The Larry and Carol Levy Institute for Entrepreneurial Practice at Kellogg.
Passion, Peluso said, “simply wanting it more, being hungrier than the next person,” is ultimately what drives individuals and organizations to excellence. Shortly after she became CEO of Travelocity, the company drafted a unique customer-satisfaction guarantee designed to out-passion the competition.
“It was a bit unconventional for us to guarantee the experience,” she said, adding that this unconventional guarantee has produced some unconventional requests, including a woman who thought her vacation package should include a date with actor Colin Farrell and a dejected man who had just found out it was illegal to marry one's first cousin in his home state and wanted to know if agents at Travelocity could help him find a state in which it was legal. They couldn't, and the man eventually cancelled his honeymoon package.
Key to the success of any business, Peluso said, is the visibility, transparency and accountability of its leadership. In her early days at Travelocity, Peluso said, after making the extremely unpopular decision to outsource hundreds of calling-center jobs to India , she knew she must resist the urge to “crawl back into [her] office” and instead do whatever she could to help her soon-to-be displaced employees. In the end, she gave each 11.5 months notice, a free computer, the opportunity to participate in free training to aid in the job search and the promise to pay childcare for two years following each employee's dismissal — a promise on which the company is still making good.
Peluso, who spent three years in consulting and one year as a White House Fellow before starting Site59, warned against postponing entrepreneurial dreams too long, getting too deeply entrenched in a career that may pay well, but does not offer nearly the challenges and rewards of building a business from the ground up. “It becomes harder and harder the more success you have … it becomes very hard to take a risk.” But, she added, “Please do it.”
In business as in life, Peluso said, there are two kinds of people: those who jump into the boat of opportunity and row furiously and those who stay ashore offering halfhearted criticism to the first group. She advised aspiring entrepreneurs to get their feet wet.
“Be the one who gets in the boat, and be the one who rows harder than everybody else.”