Insider - Profile: David Sadler, Lonely Planet's globetrotting finance chief - Off the beaten track.
1973 words
6 January 2005
Accountancy Age
18
English
(c) 2005 VNU Business Publications Limited
From kitchen table to global travel empire is a long journey. And Lonely Planet FD's David Sadler is making sure the company stays on the right path to strengthen its unique position as the world's favourite insider travel guide, writes Rachel Fielding.
As business success stories go, Lonely Planet is a great rags-to-riches tale. In 1973, Across Asia on the Cheap was written by founders Tony and Maureen Wheeler at their kitchen table, and became the first Lonely Planet guidebook and an instant bestseller. Today the company sells six million guidebooks in 14 different languages covering every corner of the planet.
It's been quite a journey. Despite a combination of factors - SARS outbreaks, the events of 9/11 and the war in Iraq - that have had nothing short of a catastrophic effect on the travel industry - the company has continued to enjoy 25% year-on-year revenue growth for the past 12 years. In the UK, turnover for 2004 was around £20m.
David Sadler, finance and operations director for Lonely Planet's Europe, Middle East and Africa (EMEA) region, doesn't like to dwell too much on the figures. 'A lot of people like Lonely Planet because they perceive it as underground. We don't necessarily like to advertise that we're market leaders,' he says.
The world of travel has certainly moved on in the three decades since the first guidebook was written. Ease of travel, and a boom in low-cost airlines has played to Lonely Planet's advantage, but it also means its target audience is far broader than ever before.
'These days there are very few places you can say you've been to that will impress people,' Sadler says. Maureen Wheeler was at a dinner party recently, Sadler explains, and not surprisingly, the topic of travel came up. 'Of the 12 people sat around the table, nine of them had climbed Everest.'
Independent travel to the four corners of the globe may once have been the preserve of a pseudo hippie clique. 'Today there are more reasons to travel than ever before,' Sadler says. 'We're trying to kill the perception that it's just for backpackers.'
To be passionate about travel is a bare minimum for a job with Lonely Planet. Sadler himself has been on two round the world trips. But it's a misconception, he says, that to work at the company means you spend half of your working life on a plane.
In fact, as finance and operations director for Lonely Planet's EMEA operation, it's Sadler's job to manage what is essentially a sales and marketing hub for Europe. 'Technically the role isn't too challenging. I'd like to say that's because I'm so good, but it's because the really technical stuff is done in Melbourne. We also benefit from the fact that the company is privately owned.'
The UK office employs 52 staff including five in finance. The authors of the guidebooks, meanwhile, are all freelance - altogether there are around 200 - managed by a team of commissioning editors around the world.
'They provide authors with the brief. You need to have something extra to deal with authors and to know your country really well. It's a tough job and not one you can do nine to five - that pretty much sums up Lonely Planet.'
Today the company's product portfolio spans 400 live titles, and a growing business-to-business operation offering customised content in a variety of formats - from a Yahoo travel-guide to New York, a Football Association guide to Korea during the World Cup and destination information published in a host of airline in-flight magazines.
There's also a TV production company and an extensive picture library, selling 120,000 travel-related images taken by some of the best travel photographers in the business. In October, the company launched The Travel Book, a selection of beautiful images from 220 countries around the world - a pictorial dedicated to travel and the world, and a showcase for Lonely Planet's image bank.
Sales of guidebooks in the paper-based format still generate the bulk of revenues for the company - around 80% at last count - but Sadler admits business-to-business deals will be a major focus in the future. 'We're only just scratching the surface in our relationships with other companies. As we become more focused on B2B there's real potential.'
'My role isn't really focused that much on the regulatory side of things - it's about controlling growth. We publish 400 live titles. Trying to manage the production, sales and distribution of that is a challenge. It's about getting the right information to the right people. We don't just produce information for the sake of it.'
Forecasting sales is, Sadler admits, one of the trickiest aspects of his job, bearing in mind the huge production time-lag and relatively short shelf life of the guidebooks (about two years). 'Getting it wrong can be very expensive. That wasn't managed well in the past and we suffered.'
Travel is not immune to the influence of fashion and predicting 'hot' travel destinations is key to success. 'It's about pre-empting the next big thing,' Sadler explains. 'We're seeing a big influx to South America right now, although we've always had a product for that area.'
Listening to Sadler talk about the business, it's easy to get carried away by his enthusiasm. It's also easy to forget that Sadler is the business's accountant. 'In this business, financial people can't work in isolation. I try to be involved in decision-making throughout the year and across processes.'
The scale of Sadler's role is not to be sniffed at. In addition to overseeing all of the company's operations in the region and managing sales projections, it's his job to make sure his managers are armed with the tools, information and resources they need to analyse the result they achieve. 'We're past the stage of controlling sales people. It's about enhancing what they do.'
'When I joined three years ago, we were undergoing a review of the business post-September 11 and SARS. We wanted to make the company more nimble. We'd been through the process of cost-cutting and efficiency reviews. Now the focus is on diversifying and making the most of the brand, which we may have been too shy to do in the past.'
Sadler is leading that project for Europe. 'Because there are lots of two-to-three-man departments, senior management has to cross those boundaries,' he explains.
He's also responsible for IT. Sadler's currently in the midst of a massive IT systems consolidation project, as the focus shifts from number crunching towards better communication and support. 'Whether it's sourcing a book, developing content, managing stock, distribution or finances - trying to merge all of that into one is no easy task.'
The project is still at an embryonic stage - the shortlist of ERP system suppliers has been whittled down to two - SAP and Oracle. But already Sadler is troubled. 'The potential for this project to go wrong is huge, but having gone through some painful restructures in the past, people have a much greater appreciation of what IT and finance can do. Everyone is very reliant on the two functions.'
Global rollout of the system, due to get underway in the next few months, is expected to take 18 months. Sadler remains tight-lipped about the precise cost of the implementation but he's confident it'll pay dividends - not only reducing financial reporting to head office from nine days to four, but also dramatically improving the quality of information.
Indeed, Sadler sees technology as core to the evolving relationship between Lonely Planet and its customers. 'Our customers and markets are very robust but it's naive to think we're not suffering at all as a result of recent world events. Part of our three-to-five-year plan is to cater for that. We haven't been commercial enough in the past in terms of selling directly to customers.'
In addition to bolstering the regional focus of the company's online shops, customers can now access up-to-the-minute travel information via the website (a subscription model is being touted) and communities are being forged via online message boards. 'It's about finding the right balance between safeguarding the book business and developing new platforms.'
There's also a balance to be struck between growing the business and retaining the family business culture ingrained in Lonely Planet. 'Tony and Maureen's character and personality is steeped in the company. They're still heavily involved and Tony still travels a lot and continues to write for the guidebooks. They treat the company as a family. The stories they tell - you couldn't make them up if you tried.'
Sadler has a few stories of his own, of course. Like the one about his wedding in South Africa. He says it's his favourite country - so far at least. 'It's one of those places where there are so many misconceptions. There's stunning and diverse scenery and the people are amazing. I got married there and took 50 of my friends over.'
Sadler is already looking forward to his next holiday - this time to Vietnam. But alongside his trusty Lonely Planet guidebook, there's one other essential item he won't be leaving behind. His laptop.
EXPANDING HORIZONS
Despite serious turbulence across the travel industry, Lonely Planet has succeeded in weathering the storm and has thrived as a successful brand that's practically synonymous with independent travel.
But the company's success has created its own hurdles: with year-on-year revenue growth at 25% for the past 12 years, one of the biggest challenges facing finance and operations director David Sadler is managing growth. 'When you're growing that quickly, it's a challenge,' he says.
Even before 9/11 the wheels of change had been set in motion. 'We'd already started a review, but we were in danger of over expanding. Finance had a role to recognise that, but their voice wasn't strong enough. You need experience and drive, and you have to be prepared to stick your hand up when things go wrong.'
Recruiting the right people and creating a finance dream team has allowed Sadler to guide the department away from number crunching, and towards business support and development, and growth.
Finding people who want to work for Lonely Planet has never been a problem. 'We have people queuing up to work for the company,' he says. But finding those who are up to the job is another kettle of fish.
'It's about being an all-rounder and being skilled at communicating with people across all departments. The technical side of the job is a given. A qualification proves the ability to learn. We want people who can take that knowledge and apply it.'
Sadler qualified at then Stoy Hayward after securing a place on the firm's graduate training programme, even though he wasn't a graduate. 'I didn't go to university, but managed to get a place on the course. I was 22 when I got my ACCA qualification.'
But it was the exposure to Stoy Hayward's entrepreneurial clients that gave him a taste for corporate life. 'It was great to get an insight into how owners run their companies and a great introduction to finance and accounting. It showed me how internal accountants are the consultants in the business.'