Terry Jones is a serial innovator. He holds a number of patents, and he’s been involved with dozens of startups, most famously Travelocity.com, which Jones founded in 1996 and led as president and CEO until May 2002, and Kayak.com, which he helped found and where he now serves as chairman.
Jones is also well known in the travel industry for his work at American Airlines, where he held a variety of executive positions over the course of more than two decades, including CIO of Sabre.
These days Jones spends much of his time consulting businesses on how to transition to the digital economy and 
lecturing about innovation and change. He’s distilled his formidable experience into a book, On Innovation (Essential Ideas Inc., 2012), which presents no fewer than 72 ideas on the topic in a short-chapter workbook format that one reviewer described as “snackable.”
Jones spoke with Diane Merlino, editor in chief of Travel Weekly PLUS, about the innovation imperative for businesses in travel. This is the first excerpt from their dialogue, edited for clarity and length.
Merlino: Terry, you’ve been involved with a lot of startups. What’s exciting to you about the work of a start-up?
Jones: It’s just fun to be an explorer — to have an idea, to work with customers, to work with passionate employees, to create something new, and to create value for customers and, hopefully, for investors or shareholders as well.
Many of them don’t work. They fail for a whole variety of reasons. But I find that the most fun I’ve ever had is to be involved in creating something new, whether it’s a start-up or a new product inside a big company.
Merlino: Your book carries a sense of urgency regarding business innovation. Why is that?
Jones: We’ve all seen that the world is moving faster and faster. I recently read about the history of fishing. It took 85,000 years to evolve from the very first fishing that used spears to the invention of the barbed hook. That’s an awfully long time. In the United States, 40% of us have gotten tablet computers in about four-and-a-half years. So the pace of change is accelerating, and any businesses that don’t get on the train will get left behind.
Merlino: How is the pace of change connected with the need to innovate?
Jones: As your customer evolves and as businesses around you evolve, you have to innovate and evolve as well. I recently gave a speech to a group of farmers, sponsored by an agricultural bank. One of the farmers said, “I just went into my bank with my son, and I said to the president of the bank, ‘Bob, here’s the good news: My son Larry is gonna inherit the farm and he wants to run it. The bad news is that he’s not gonna bank with you ‘cause you don’t have mobile banking. Good-bye.’”
That’s happening to all kinds of people in all kinds of industries who aren’t moving fast enough to keep up with how quickly technology in particular is evolving the way that people shop and buy.
And in our industry, the travel industry — the No. 1 piece of ecommerce on the Internet, larger than the next four categories of electronic commerce combined — we change more rapidly than anybody else. So you’ve got to innovate to keep up with how quickly your competitors and your customers are changing.
Merlino: It’s not surprising that travel is the largest ecommerce industry on the Internet. But it’s larger than the next four categories combined?
Jones: If you take books, movies, electronics and apparel and put them together, that figure is still not as big as the amount of ecommerce produced by travel. Most of the studies on electronic commerce done by the big research firms don’t include travel ecommerce because it distorts their graphs. It makes all their other categories look tiny, so they just leave it out.
There are lots of reasons why travel is changing so quickly, and we all have to be aware that ecommerce is the future of our industry in terms of distribution.
Merlino: I’ve seen you refer to a 2013 Deloitte Touche worldwide survey about Millennials’ attitudes toward innovation. What’s the connection between Millennials and business innovation? And why is it important for travel industry leaders to pay attention to it?
Jones: When we look at the way Millennials behave — the amount of time they spend online, the amount of their social interaction that’s online, how quickly they move to mobile use and purchasing — they are acting very differently than our traditional customers.
I look at my own son and my daughter and how they travel, how they interact, how they purchase. My daughter is a physical travel agent, of all things, which is pretty amazing for the daughter of a guy who’s been at the center of this ecommerce world.
They simply behave differently, and I think embracing their views and their perspectives is key. This will push you toward innovating and toward understanding your new customer.
Merlino: Have you found that most businesses are open to the ideas of innovative Millennials?
Jones: I think it’s a company-by-company thing. I recently spoke with someone outside the travel industry who had formed an innovation committee to get a whole bunch of people working on innovation, and all the people who signed up were Millennials. This was in a fairly stodgy industry. And they said, “Gee, the first thing they did was take our newsletter and make it a blog.” That was like space travel to this company.
Merlino: Was that company the exception or the rule?
Jones: There are lots of companies like that. I talked to a young person at a 150-year-old company, and she said, “Well, I did something today.” And I said, “What was that?” And she said, “I made all our Adobe application forms unlock so the consumer can actually type on the form instead of having to print it out and write on it.” And I said “Congratulations,” without pointing out that even the IRS did that about eight years ago. But in this company that was a big deal.
I live up in Incline Village at Lake Tahoe, a very small town. My insurance agent there knew he needed to get 
online, knew he needed to have video, knew he needed to have social networks, but he didn’t know how to do it. So he hired his kids to do it for him, and they push him pretty hard. He’s still the insurance guy who’s in the Rotary club and goes to the parades and all that stuff. But they do this other stuff for him.
Merlino: What’s the lesson there for travel industry leaders?
Jones: The lesson is that you don’t need to know how to do this stuff yourself; you just need to know that you have to do it. And you need to be open enough to accept that, instead of saying, “Well, we’ve always done it this way,” or “We’ve never done it that way.” There’s a chapter about that in the book, about being open enough to understand that just because you’ve always done it one way doesn’t mean you’re going to continue to do it that way.
There’s another chapter called “Your Wake is Larger than You Imagine.” As you motor through your company, you leave this big wake behind you, a wake that consists of everything you say and do. Employees, especially Millennials, watch that pretty carefully. Are you a naysayer and a devil’s advocate, or do you support people? What you say and how you say it has a lot to do with the amount of change that you’ll get.
NEXT ISSUE: Terry Jones on how to turn on innovation, starting with your company’s culture.