When you are running a blog entitled "Exceeding Expectations" you really have to include an article on the Beijing Olympics and especially the performance of Team GB.
We define Excellence as exceeding both requirements and expectations, requirements being tangible and expectations being intangible. The team exceeded requirements in terms of both medal count and final position in the medal table. In doing so they exceeded the expectations of their funders and sponsors and of the country as a whole. Certainly we did not expect to become a sporting superpower but that's exactly what fourth in the Olympic medal table makes us and boy do we all feel good about that!
We know that Competitive Strength is strongly linked to Excellence. High levels of Competitive Strength in any context enables people to exceed requirements and expectations. In the case of Olympic athletes this is not just about the talent, dedication, hard work and ambition of the athletes themselves but about the back up teams performing to the same level.
Here is Bradley Wiggins a double gold winner and member of the all conquering GB cycling team on this subject. "We have an unbelievable team behind us, management and technical. I know with confidence that when I step onto the track my bike will be in absolutely perfect working order. I can't remember the last time a mechanical problem was a factor in any GB races. When I start a race it is big boost mentally to have certain knowledge that nobody lining up against me starts with an edge. In fact it is always us who have the edge".
With this level of Competitive Strength our cyclists were nigh on unstoppable. They are best cyclists in the world with the best back up team. How many of us running businesses or public sector organisations can honestly say that our front line people can line up to do their jobs every day "knowing they have the edge"? What could they achieve if they did know this?
Our last few articles have focused on the different thinking that is needed to achieve Excellence through Competitive Strength. So what about Usain Bolt then? This man is not built for sprinting says the conventional thinking. He is too tall, his stride is too long and slow and really he is much better suited to 400 or 800m. Well Bolt and his coaches have rewritten some of the rules of sprinting by finding a way to adapt his stride pattern in such a way that the supposed weaknesses are turned into competitive advantage. With this Bolt made history and now other coaches will have to rethink what it takes to sprint 100 and 200m. It certainly is not going to be "run a bit faster the way you have always run", because that isn't enough to beat Usain Bolt!
The last two articles have focused on British Airways and how their conventional thinking dictates their strategy and response to challenges. In the last article we contrasted this with the different thinking displayed by Virgin Atlantic with an example of a stunningly high standard of customer service. Well today Virgin announced a leap in profits from £6m to £34.8M for the year. Profits for the first quarter of the current year are £23.5m and business class passengers (the most profitable) are up 22% with overall numbers up 7.6%. So whose employees know that they " have the edge" and does it make a difference? Answers in the comments please.
So congratulations to Team GB and here's to London 2012. To find out more about Competitive Strength and different thinking go to the brand new Changeworld website.
Showing posts with label BA. Show all posts
Showing posts with label BA. Show all posts
Wednesday, 27 August 2008
Monday, 4 August 2008
Above & Beyond
In our last article on the theme of different thinking we highlighted British Airways' explanation for their falling passenger numbers (increases in fares and the economic slowdown) and their persistance in pursuing their strategy of merging with other carriers. We demonstrated how BA are trapped in their traditional thinking and their strategy and responses are therefore all about how they can keep on doing things the way they have always done them.
This article is a story from the same industry which demonstrates different thinking in action.
Two friends of mine had booked a holiday in Barbados. They arrived at the airport looking forward to two weeks on an island paradise. Unfortunately the flight had left the day before and there was not another flight for 4 days! Our friends had got the wrong date in their heads so it was entirely their fault.
They were flying with Virgin so they were taken to the Virgin desk to see if anything could be done. The Virgin staff worked out a way to get them to their destination that day by flying them to Antigua then on an internal flight to Barbados. With transfer charges and the additional flight this was going to cost a further £500 plus. However when Virgin realised our friends were previous customers they immediately waived all the transfer charges.
What is more when our friends arrived in Barbados they took a taxi to their hotel as the coach transfer was obviously not going to be there for them. The next day when they met their Virgin representative at their hotel she asked how they had travelled from the airport to the hotel. When they said by taxi the representative said "just let me have the receipt and we will reimburse you for that".
To say our friends were impressed is an understatement and they never stop telling people how good Virgin were. They were staring a ruined holiday in the face and would have paid almost any sum to have it sorted out. Virgin not only rescued it but did not take advantage of our friends' mistake and only charged the minimum for solving the problem. This is different thinking. None of the "well we will see if we can get you on a flight later in the week" or "well if you write to Head Office they might be able to do something about the charges". All the decisions and actions were taken by front line staff, no reference to managers for permissions was needed.
Different thinking is the key. No amount of carefully written policies and procedures handed down from above would have enabled the Virgin staff to have acted the way they did. The personal and organisational recognition of the value of the existing customer is a manifestation of this different thinking. They not only represent future repeat business but can also be the strongest and lowest cost advocates for your brand.
Also Virgin clearly understand the business they are in and it is not simply transporting people from point A to point B. They know they are in the holiday business and that their customers value their holidays highly. So meeting or even exceeding their customers expectations is the key to success. In the case of our friends it was "you have given us your business, not just on this occasion but previously so we will see that you get your holiday".
This is just one story from one source and no doubt Virgin do not get it right every time. However would you honestly expect to hear even one story like this involving BA, even though they give themselves plenty of opportunities and don't have to wait for a customer to slip up?
This demonstrates the superior level of Competitive Strength that Virgin's different thinking has enabled them to achieve. When Richard Branson set up Virgin Atlantic in direct competition to much larger and often heavily subsidised national flag carriers few industry insiders gave him any chance of surviving. However his airline and the accompanying holiday business has both survived and prospered. As the sector faces up to the massive hike in its fuel bill and slowing demand which business do you think will emerge the strongest? BA with its strategy of getting bigger so it can be what it always has been or Virgin with its highly developed customer service ethos and consequent superior Competitive Strength.
Any business can do what Virgin does and profit from it. To find how and perhaps more importantly why, go to the Competitive Strength website.
This article is a story from the same industry which demonstrates different thinking in action.
Two friends of mine had booked a holiday in Barbados. They arrived at the airport looking forward to two weeks on an island paradise. Unfortunately the flight had left the day before and there was not another flight for 4 days! Our friends had got the wrong date in their heads so it was entirely their fault.
They were flying with Virgin so they were taken to the Virgin desk to see if anything could be done. The Virgin staff worked out a way to get them to their destination that day by flying them to Antigua then on an internal flight to Barbados. With transfer charges and the additional flight this was going to cost a further £500 plus. However when Virgin realised our friends were previous customers they immediately waived all the transfer charges.
What is more when our friends arrived in Barbados they took a taxi to their hotel as the coach transfer was obviously not going to be there for them. The next day when they met their Virgin representative at their hotel she asked how they had travelled from the airport to the hotel. When they said by taxi the representative said "just let me have the receipt and we will reimburse you for that".
To say our friends were impressed is an understatement and they never stop telling people how good Virgin were. They were staring a ruined holiday in the face and would have paid almost any sum to have it sorted out. Virgin not only rescued it but did not take advantage of our friends' mistake and only charged the minimum for solving the problem. This is different thinking. None of the "well we will see if we can get you on a flight later in the week" or "well if you write to Head Office they might be able to do something about the charges". All the decisions and actions were taken by front line staff, no reference to managers for permissions was needed.
Different thinking is the key. No amount of carefully written policies and procedures handed down from above would have enabled the Virgin staff to have acted the way they did. The personal and organisational recognition of the value of the existing customer is a manifestation of this different thinking. They not only represent future repeat business but can also be the strongest and lowest cost advocates for your brand.
Also Virgin clearly understand the business they are in and it is not simply transporting people from point A to point B. They know they are in the holiday business and that their customers value their holidays highly. So meeting or even exceeding their customers expectations is the key to success. In the case of our friends it was "you have given us your business, not just on this occasion but previously so we will see that you get your holiday".
This is just one story from one source and no doubt Virgin do not get it right every time. However would you honestly expect to hear even one story like this involving BA, even though they give themselves plenty of opportunities and don't have to wait for a customer to slip up?
This demonstrates the superior level of Competitive Strength that Virgin's different thinking has enabled them to achieve. When Richard Branson set up Virgin Atlantic in direct competition to much larger and often heavily subsidised national flag carriers few industry insiders gave him any chance of surviving. However his airline and the accompanying holiday business has both survived and prospered. As the sector faces up to the massive hike in its fuel bill and slowing demand which business do you think will emerge the strongest? BA with its strategy of getting bigger so it can be what it always has been or Virgin with its highly developed customer service ethos and consequent superior Competitive Strength.
Any business can do what Virgin does and profit from it. To find how and perhaps more importantly why, go to the Competitive Strength website.
Monday, 7 July 2008
BA - Same thinking, same excuses, same result
From The Times, July 4, 2008, David Robertson
Cost-hit British Airways flies with quarter of seats empty
British Airways flights are taking off with almost a quarter of their seats empty after higher air fares and a slowing economy led to 87,000 fewer passengers using the British flag-carrier last month.
The airline said it carried 2.9 per cent fewer passengers than the same month last year with traffic to Africa, the Middle East and the United States being the weakest.
The load factor on BA's aircraft, a measure of how full each plane is when it flies, fell 3.8 percentage points to 76.7 per cent. That means nearly one in every four seats is now empty on BA flights.
The traffic figures are disappointing because June usually produces an increase in the number of passengers because people begin their summer holidays.
BA blamed the fall on “significant” increases in ticket prices because of the record high price of oil and a tough consumer environment in the UK.
Further on his report David Robertson writes:
IATA, the air travel industry body, said that International air traffic held up against the economic slowdown in May, rising for the first time in three months to 74.3 per cent.
The figure shows a rise of 6 per cent on May last year.
Of course air travel will be affected by the economic slowdown and by the need to raise prices in the face of significantly increased fuel costs. No one would expect BA to be immune from this and they still appear doing better than the IATA average. However BA is experiencing a drop in load factor at a time of year when an increase is usually expected. The IATA figures indicate this seasonal increase is happening, albeit perhaps at a lower rate than previously and both Easyjet and Ryanair report no drop off in passenger numbers.
Has it not occurred to BA that their appalling customer service record might also have something to do with why fewer people are using its services? In our last two blog articles we highlighted the crucial need for different thinking as a pre-requisite for finding solutions to today’s challenges. BA appears unable to change its thinking. It claims it has been forced to increase its prices and that customers just have to accept that is the way it is. Well they might if they thought that BA offered fair value in return, but they don’t and BA cannot, it appears get its head round this.
This is about both “value” and, crucially whose opinion of “value” really counts. Way back in 1987 Robert D. Buzzell and Bradley T. Gale wrote in their book The PIMS Principles:
“Value is the relationship between quality and price. A customer who gets superior quality at a low price gets better value; a customer who gets inferior quality at a high price obviously gets worse value. But who determines what counts as good or poor quality, high or low price? In a competitive context the customer’s behaviour is crucial: who he buys from and at what price, determines who wins and who loses in any competitive market. Therefore quality is whatever the customer says it is, and the quality of a particular product or service is whatever the customer perceives it to be. How does a customer decide whether a particular offering represents superior or inferior quality, or a high or low price? He makes that assessment on the basis of comparison; is this offering (product or services) better or worse than those of competitors? and; At how much higher or lower price?" (Buzzell & Gale. 1987.111)
So in a few succinct words, based on the extensive research from the PIMS database, Buzzell & Gale explain exactly why “Customers Count” and why customers’ perception is all. “Therefore quality is whatever the customer says it is, and the quality of a particular product or service is whatever the customer perceives it to be”.
As costs rise and the economy slows businesses are faced with some difficult decisions about value. Increasing prices, even if apparently justified by passing on increased costs may push the price of a product or service beyond the point where the customer consider it to be good value. In certain instances this may be the point at which some items actually become unsaleable as the price they must be sold at to recoup costs becomes such poor value. Furthermore customers may change their basis of comparison in assessing value and concerns about the economy can influence customers thinking in this respect.
This is where the different thinking comes in. Our work on Competitive Strength has shown that those businesses in the strongest Competitive Strength condition – Free and at the top end of Excellent – think differently to the rest. One of the characteristics is an ability to see things through the eyes of their customers. This is not about good market research but about a culture that is focused on the customer and makes its decisions based on what the customers want first and foremost. Consequently they can identify quickly and clearly how their customers perceive the value in their products and services and when and why those perceptions might change.
The second characteristic of this different thinking is high “Changeability”. So not only can they identify changes in customers’ value assessment perceptions earlier and better than their competitors, they have the ability to respond to any changes faster and more effectively, including the unexpected ones!
BA is not exhibiting this different thinking. Indeed it is still pursuing a merger with American Airlines and Iberia that would create a dominant carrier on transatlantic routes with the semi-monopolistic culture that BA has never been able to shake off. It is pursuing the merger not thinking about its customers but about how it can carry on the way it always has. Trapped in its traditional thinking this merger may be the only way BA can find to survive the economic slowdown.
Applying yesterday’s thinking to the challenges of today and tomorrow is not going to work. For more information on the different thinking that comes with High Competitive Strength and consequent Changeability please look at the Competitive Strength Report website– and the ChangeWORLD website.
Just how different does your organisation's thinking need to be if you are going to survive these turbulent times?
Cost-hit British Airways flies with quarter of seats empty
British Airways flights are taking off with almost a quarter of their seats empty after higher air fares and a slowing economy led to 87,000 fewer passengers using the British flag-carrier last month.
The airline said it carried 2.9 per cent fewer passengers than the same month last year with traffic to Africa, the Middle East and the United States being the weakest.
The load factor on BA's aircraft, a measure of how full each plane is when it flies, fell 3.8 percentage points to 76.7 per cent. That means nearly one in every four seats is now empty on BA flights.
The traffic figures are disappointing because June usually produces an increase in the number of passengers because people begin their summer holidays.
BA blamed the fall on “significant” increases in ticket prices because of the record high price of oil and a tough consumer environment in the UK.
Further on his report David Robertson writes:
IATA, the air travel industry body, said that International air traffic held up against the economic slowdown in May, rising for the first time in three months to 74.3 per cent.
The figure shows a rise of 6 per cent on May last year.
Of course air travel will be affected by the economic slowdown and by the need to raise prices in the face of significantly increased fuel costs. No one would expect BA to be immune from this and they still appear doing better than the IATA average. However BA is experiencing a drop in load factor at a time of year when an increase is usually expected. The IATA figures indicate this seasonal increase is happening, albeit perhaps at a lower rate than previously and both Easyjet and Ryanair report no drop off in passenger numbers.
Has it not occurred to BA that their appalling customer service record might also have something to do with why fewer people are using its services? In our last two blog articles we highlighted the crucial need for different thinking as a pre-requisite for finding solutions to today’s challenges. BA appears unable to change its thinking. It claims it has been forced to increase its prices and that customers just have to accept that is the way it is. Well they might if they thought that BA offered fair value in return, but they don’t and BA cannot, it appears get its head round this.
This is about both “value” and, crucially whose opinion of “value” really counts. Way back in 1987 Robert D. Buzzell and Bradley T. Gale wrote in their book The PIMS Principles:
“Value is the relationship between quality and price. A customer who gets superior quality at a low price gets better value; a customer who gets inferior quality at a high price obviously gets worse value. But who determines what counts as good or poor quality, high or low price? In a competitive context the customer’s behaviour is crucial: who he buys from and at what price, determines who wins and who loses in any competitive market. Therefore quality is whatever the customer says it is, and the quality of a particular product or service is whatever the customer perceives it to be. How does a customer decide whether a particular offering represents superior or inferior quality, or a high or low price? He makes that assessment on the basis of comparison; is this offering (product or services) better or worse than those of competitors? and; At how much higher or lower price?" (Buzzell & Gale. 1987.111)
So in a few succinct words, based on the extensive research from the PIMS database, Buzzell & Gale explain exactly why “Customers Count” and why customers’ perception is all. “Therefore quality is whatever the customer says it is, and the quality of a particular product or service is whatever the customer perceives it to be”.
As costs rise and the economy slows businesses are faced with some difficult decisions about value. Increasing prices, even if apparently justified by passing on increased costs may push the price of a product or service beyond the point where the customer consider it to be good value. In certain instances this may be the point at which some items actually become unsaleable as the price they must be sold at to recoup costs becomes such poor value. Furthermore customers may change their basis of comparison in assessing value and concerns about the economy can influence customers thinking in this respect.
This is where the different thinking comes in. Our work on Competitive Strength has shown that those businesses in the strongest Competitive Strength condition – Free and at the top end of Excellent – think differently to the rest. One of the characteristics is an ability to see things through the eyes of their customers. This is not about good market research but about a culture that is focused on the customer and makes its decisions based on what the customers want first and foremost. Consequently they can identify quickly and clearly how their customers perceive the value in their products and services and when and why those perceptions might change.
The second characteristic of this different thinking is high “Changeability”. So not only can they identify changes in customers’ value assessment perceptions earlier and better than their competitors, they have the ability to respond to any changes faster and more effectively, including the unexpected ones!
BA is not exhibiting this different thinking. Indeed it is still pursuing a merger with American Airlines and Iberia that would create a dominant carrier on transatlantic routes with the semi-monopolistic culture that BA has never been able to shake off. It is pursuing the merger not thinking about its customers but about how it can carry on the way it always has. Trapped in its traditional thinking this merger may be the only way BA can find to survive the economic slowdown.
Applying yesterday’s thinking to the challenges of today and tomorrow is not going to work. For more information on the different thinking that comes with High Competitive Strength and consequent Changeability please look at the Competitive Strength Report website– and the ChangeWORLD website.
Just how different does your organisation's thinking need to be if you are going to survive these turbulent times?
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