How Rick Steves' Europe is handling a growing business

By Jim Davis
Everett Herald Business Journal Editor

EDMONDS — If you need an example of the reach of Rick Steves, you can find it in a shop in Rothenburg ob der Tauber, Germany.

That’s where Craig Davidson saw firsthand the goodwill that Steves has generated over a career as a guidebook author and TV travel host.

Davidson, the new chief operating officer for Rick Steves’ Europe, was working for athletic company Puma in 2005 when he traveled to Germany on a business trip.

He decided he would do some sightseeing so he went to the library and photocopied sections of one of Steves’ guidebooks.

“Yep, photocopied, I’m an accountant,” Davidson said laughing.

He and some of his friends took a walking tour suggested in the book and stopped in the shop recommended by Steves.

“While I’m standing there, this woman comes up and says, ‘You have a copy of Rick’s book, you get a free map,’” Davidson recalled. “I said, ‘It’s only a photocopy. I don’t feel right getting a free map.’ She said, ‘Nope, you get a free map.’ She gave every one of us a free map.

“Then she pulled me into the backroom and showed me a picture of Rick when he was 18 years old with a big backpack on and she started telling me stories about Rick,” Davidson said. “Then I had to meet her family. It was the craziest experience I ever came across.”

Add another Rick Steves devotee.

So when the job came open for the newly created position of chief operating officer, Davidson applied for it as soon as he saw it online.

Davidson, 45, joined Rick Steves’ Europe here in May and aims to help run the business side of the company while Steves focuses on producing content.

Steves started his company selling books out of his car. Now the privately held Rick Steves’ Europe employs 100 people and generates $70 million a year in revenue with its guidebooks, tours, travel classes, television and radio shows and merchandise.

“It’s clear that we’re at that threshold where we’re more of a serious business and we wanted someone with serious chops to come in,” Steves said. “Somebody who has been out there and knows how to run a bigger business and Craig fit the bill perfect.”

Davidson can be the person who can help the company become more efficient and productive without losing its identity, said Rich Sorenson, who is in charge of marketing and strategy and has worked with Steves since the early 1990s.

“I think what we were really needing in this position was someone who has been there before,” Sorenson said. “Someone who has already gone through the growth that we’re anticipating that we’re going to go through.”

Davidson is from Canada, born outside of Toronto. He earned a bachelor’s of commerce degree at the University of Toronto. After college he worked for a couple of large accounting firms on the auditing side of the business.

In 1999, he joined Puma Canada, a brand that he remembered from the 1970s but he hadn’t heard of for years.

“I thought, ‘Holy cow, these guys still exist?’” Davidson said.

After a year and a half, Davidson was transferred from Canada to Puma North America headquarters in Boston where he spent 10 years in a variety of jobs, rising to vice president of business intelligence and controlling.

In spring 2010, Puma’s parent company, now known as the Kering Group, purchased Cobra Golf from the Acushnet Co. in Fairhaven, Massachusetts. Puma sought an entry into the golf business, Davidson said.

“The equipment side of Cobra — golf clubs — makes you legitimate in the golf business,” he said. “So now a pro shop or whoever will carry your apparel and your clubs because you’re a golf player, otherwise you’re just an apparel guy making shirts.”

With the purchase, Puma gained the Cobra brand name and the research and development department, but little else. Davidson was sent with the team to Carlsbad, Calif., to set up the infrastructure support for the acquisition.

“We had to put in our own system to be able to sell to customers, to ship, get our own warehouse and manufacturing facilities,” Davidson said.

He spent two years working in Carlsbad. And yes, spending time on the golf course.

“I was kind of a hack golfer,” Davidson said. “Until I got into the golf industry, I didn’t realize how bad I played golf.”

He met his partner, Nancy Ladwig, in a coffee shop in Southern California: “We just started to talk in line and it migrated from there.” In Carlsbad, Davidson also obtained his American citizenship.

In 2013, Puma underwent a restructuring and Davidson followed his old boss to Puma’s corporate headquarters in Herzogenaurach, Germany, near Nuremberg. Davidson took the job, in part, because it allowed him and Ladwig to see Europe.

They traveled during weekends and holidays, first in Germany and then to Belgium, France and Italy.

And they used Rick Steves’ podcasts and books. Davidson would read the guidebooks aloud as they explored new cities.

“I like to make the joke that Nancy spent two years seeing Europe and I spent two years reading about it,” Davidson said.

At Rick Steves’ Europe, Davidson isn’t being tasked to accomplish a set growth plan.

“We have no agenda,” Steves said. “We do what we do and it grows naturally. I’ve never had a five-year plan for growth. I’m privately held so no one is yelling at me to make more money. It’s a blessing.”

But Davidson arrives at a company that has had substantial growth for years — so much so that it’s suddenly no longer such a small business.

One area that has seen rapid growth is the tour business. Rick Steves’ Europe took 10,000 people to Europe seven years ago, said Sorenson, who’s in charge of marketing and strategy.

This year, the company will take 20,000 people on those trips.

“Our tours are fairly expensive purchases for people, from $2,000 to $5,000 per person,” Sorenson said. “It’s important that we maintain quality and are not the least bit disorganized.”

Any company needs strong back office support to handle that type of growth. A lot of that support came from office manager, Anne Kirchner, who spent 25 years at the company before retiring this spring. She was brilliant, beloved and a stabilizing force, Steves said.

With her retirement, Steves changed the position to chief operating officer to handle some of the tasks required of a larger organization, especially one where the CEO — Steves — is out of the country four months of the year.

“I have a responsibility to employ 100 people well and you can’t be reckless or unprofessional when you have people planning on raising their kids and paying their mortgage when they work somewhere,” Steves said. “So I want to run this business smartly.”

And there’s another factor in creating the new position. Much of Rick Steves’ Europe’s senior management is within 10 years of retirement, Sorenson said. So the future of the company is definitely top of mind.

“Twenty years ago, we all thought we would be here forever,” Sorenson said. “It doesn’t quite look like that when we’re nearing 60.”

For Steves, the business has been like another of his children.

“I’m 60 now,” Steves said. “I’m not going to be around here for another 30 years and I want to be able to pull back knowing things are in good hands so we’ve got to think about that.”

When Davidson interviewed for the job, he spoke with Steves from Germany via Skype. Steves said he saw some magic and love of life in Davidson and a delight in tackling business challenges that might seem dreary.

“To me, he’s fun,” Steves said. “He gets our mission. He’s smart as can be. I like somebody who enjoys entrepreneurial guerrilla capitalism and he has experience with bigger companies and he’s had experience in international business.”

And getting the mission was a key question for the hire.

“We wanted to be really clear that we have a culture that we love here and we were almost offputting or concerning to him how committed we were to our culture,” Steves said. “We didn’t want some big shot coming in and reworking us into the mold of a conventional corporation.”

Davidson had his own questions: “Small business. Strong personality at the lead. Will you fit or will you not fit? From the first Skype interview I had with Rick, it was pretty clear we fit.”

“Everybody thinks from corporate to here would be a great change, but there really isn’t,” Davidson said. “I mean people are people. They’ve got ideas. It’s very open. It’s very friendly, which is awesome. It hasn’t been as jarring as some people might think.”

Davidson and Ladwig moved to Edmonds, taking Steves’ advice to rent before purchasing a home to learn the neighborhoods. By coincidence, the house they found is actually next door to Steves’ house.

“We got the address and we drove by and I said, ‘I think Rick lives above us,’” Davidson said. “And that’s how it happened.”

One of the hardest parts of the career change for Davidson was leaving Europe.

“This was an awesome opportunity at the right time and pretty well ticked every box on what I wanted to do. And my experience matched,” Davidson said. “Then on the other hand, when Nancy and I would sit and say, ‘Are we done with Europe?’ When it was decision time, ‘Do we give up Europe?’

“And it was like we don’t have to. It’s Rick Steves’ Europe. I have to go back.”

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