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Thursday, August 20, 2009

Moments of Truth - New Strategies for Today's Customer-Driven Economy

by Jan Carlzon, ©1987 Ballinger Publishing Company

Jan Carlzon became President of Scandinavian Airlines after successfully running a travel services company and a smaller airline. His book shows how getting people involved in continually upgrading performance requires unusual actions and often gets unplannned, but extraordinary results. This page is my “best of” compilation from the book. As I read it, I realize these are things most Sales Lab customers do. The whole book is a gem, very good and mercifully short.

Mistakes can usually be corrected later; the time lost in not making a decision can never be retrieved. p26

Anyone who is not given information cannot assume responsibility. But anyone who is given information cannot avoid assuming it. p27

The ability to understand and direct change is crucial for leadership...By defining clear goals and strategies and then communicating to his employees and training them to take responsibility for reaching those goals, the leader can create a secure working environment that fosters flexibility and innovation. Thus a new leader is a listener, communicator, and educator-an emotionally expressive and inspiring person who can create the right atmosphere rather than make all the decisions himself.

These skills were once regarded as feminine, an association that goes back to women's roles in the old agricultural society when they took care of family and social relationships in the village. Their intuition and sensitivity are traits that are essential for any manager, but cannot, unfortunately, be picked up overnight. p35-6

In many respects, though, the leader has to be an enlightened dictator-one who is willing to disseminate the vision and goals throughout a large, decentralized organization but who will not brook active dissent to the underlying ideas. p36

Some employees may not see or fully understand the vision and goals at the beginning. The leader must resist the urge to dismiss those people and instead work with them, give them additional information, and attempt again to make them understand.

Of course there will always be those who refuse to be persuaded. From them he must demand loyalty, if not emotional commitment to the goals. Otherwise they should be asked to leave. p36-7

A leader is one who creates the right environment for business to be done. p37

At times the press in Scandinavia has "divulged" that I personally have not originated all the ideas that have led to SAS's success ... The great triumph at SAS is that we have unleashed our employee's creativity through decentralization ... This same applies to my approach to outside consultants ... To me it cannot be anything other than sensible and responsible to bring a ship's pilot on board when you are steering your vessel into new and dangerous waters! p38-9

Unfortunately, many corporate executives are noticeably lacking in intuition, courage and conviction. The hierarchical company is traditionally headed by people skilled in economics, finance, or other technical expertise ... may be extremely bright, but they are often disastrous decision-makers and implementers. They find 10 solutions to every problem and just as they are about to decide which one to try, they discover five more. In the meantime, opportunities have passed them by. Sometimes I think they think up new alternatives in order to avoid taking the critical leap. p77

A manager cannot be allowed to keep his position if he does not accept his company's overall strategy or if he is incapable of meeting his objectives. p84

We had caught ourselves in one of the most basic mistakes a service-oriented business can make: promising one thing and measuring another. p108

Setting a good example is truly the most effective means of communications-and setting a poor one is disastrous! Most traditional managers drape themselves in imperial trappings. But when the customer comes first, you simply can't afford to do that. p95

When you reach your goal, you may become a prisoner of success ... it's tougher to win peace than to win war.

... this can't go on any longer. We have to begin making demands again ... By establishing our original goal, we had placed a demand on our employees. But now that there was no goal, a kind of reversal had set in ... people began setting their own individual goals, scattering in all directions and making different demands on the company. It was a graphic illustration of the need for top management to direct all forces toward a common goal. p121

First step - make a list. p125-6

We hadn't invented a goal. Rather we developed one out of a concern that had been there all along. p128

Although some people have criticized our passion for goal-setting as bordering on the hysterical, I disagree. Larger goals help us see beyond our daily tasks. People want challenges in their jobs and lives. By setting goals ... we can contribute to our employees' well-being and, together, we can strive to serve our customers better and better. p133

Empowering employees with real responsibility and authority requires a radically different organizational structure. The model is horizontal, and the work roles are redefined.
The first level is responsible for guiding the company into the future, anticipating threats to current business, and scanning for new opportunities. People at this level establish goals and develop strategies for reaching them. Of course, this entails making decisions, but not regarding specific actions.

The next level is responsible for planning and allocating the available resources by investing money or recruiting people-in other words, doing everything necessary to enable the people at the operative level to carry out the strategies that top management has established. Again, these are not decisions on specific actions. Rather, they are a means of creating the prerequisites for others to make those decisions. The third level is what I call the front line, or operations. This is where all the specific decisions should be made-all decisions necessary to run the company in accordance with top management's goals and strategies. p133-4

Fortunately, the front line and the market itself are reliable guides for remaining on track. p134