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Newsletter challenges? The firewalls (in and out) are being their usually helpful selves!
If you want a direct link to the online newsletter click –
http://www.towersassociates.com/Process_Performance_15_Oct_2008.html

And grab those casestudies while they last…

All the Best for a great weekend

Steve

Chair – BP Group

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The 16th Annual BP Group survey has just completed. Preliminary results were presented in conjunction with IQPC at the BPE in Financial Services conference in London last week. Full results will be shared with all 1240 participants later this month prior to a webinar hosted by City Process Management (this years platinum sponsors).

If you would like a copy of the preliminary results let me know.

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Just a quickie (and one off) to let you know of a permanent change to my previous email address. The new one is steve.towers@bpgroup.org and it’s effective immediately!

We’ll have a BP Group newsletter featuring the 2008 Annual Survey, conference reviews and presentations, whitepaper (Accelerated Cost Reduction) and several offers THIS WEEK.

Also I would suggest a visit to the new BP Group site – the Open training programme for the next six months is taking shape there 😉

How low flying airlines can reach a new service altitude

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In recent times I have talked about Successful Customer Outcomes (SCOs), those things that we should seek out on behalf of our customers to ensure we deliver and exceed their expectations. If we align our organizations to SCOs (rather than industrial age silos) we become slicker, more agile, and indeed more profitable. In this article I’ll explore how operators in one industry can, via SCOs, rethink their business to survive and prosper in the hard times ahead.

I’ve been flying regularly for 20 years or more, and in the last twelve months I’ve clocked up over 150,000 miles; my lifetime mileage must be reaching interplanetary levels. I’ve travelled (and often grappled) with eleven different airlines this year, so I feel pretty well qualified to provide my take on what the airline industry should be doing to make the customer experience significantly better.

I’m going to concentrate here on what’s known as ‘Next Practice’: ideas that go beyond simply emulating the best efforts of the competition. The more progressive companies are already testing some new offerings and proving through sustained customer loyalty that it is possible to prosper while traditional incumbents stumble and fail. I hope to show that there is a lot more that could be being done.

EasyJet and the Sick Bags

This may not sound like a promising place to start, but bear with me. EasyJet, a European budget airline, continues to grow at the expense of many of its rivals. These include the large international monoliths who have until recently operated with some impunity with regard to passenger comfort and fares. In an environment of rising fuel costs, terrorist threat, increasing competition and inflexible organization structures, bottom line cost performance has become critical. This is even more pertinent for the budget carriers, where seemingly inexpensive items represent a large proportion of the ticket price. Many airlines have haphazardly reduced the offer
to reduce the cost; EasyJet have looked to innovate.

Taking an idea from Southwest Airlines, who advertise job vacancies on their sick bags, easyJet have gone that step further into Next Practice and removed the cost of the sick bags by getting someone else to pay for them. Kodak provide the bags, which if unused (yuck) can be employed as film envelopes for those vacation pictures. Even in this digital age many folk are wedded to their 35mm cameras. For the digitally liberated, Kodak also provide fast turnaround development services for photo media – you guessed it, right there in the arrivals lounge. Easyjet of course can focus clearly on this type of opportunity because their Successful Customer Outcome, as articulated by their creator, Stelios, is “Bums on Seats”.

So what SCO-inspired survival tips can we propose that may help the troubled airline giants to survive, if it isn’t already too late?

Eight Next Practice Offerings

Here are eight examples of SCO-oriented service offerings that I would like to see adopted. These eight are taken from a list that is much longer, and I am sure you could add to my choices. You might also want to consider what an equivalent list could look like for your industry.

1. In-flight Entertainment
– Seat Back Video
Virgin have provided this service for years and it undoubtedly adds to the flying experience. Anyone who has sat behind a large individual (sometimes wearing a cowboy hat) or is challenged in the altitude department will know exactly what I mean. And yet with the current malaise affecting some of the old airlines what are they considering doing to reduce cost? They are going to remove their primitive over-hanging screens to save on weight! Wow, that’s really going to help win more business and give them a viable future (not).

– On Demand Edutainment
Now things are moving. Being able to select from a range of films, news and all that TV can offer creates a more customisable experience that meets everyone’s needs. Once more Virgin lead the pack here and continue to push this out, even into Economy. The technology is not expensive so what stops the others following suit? It’s simple: focusing on the wrong things, having the wrong priorities, and clinging to the delusion that the current problems are just a blip.

– Connectivity: Pocket PCs, Smart Phones and Playstations
Many of us carry libraries of music and video. Our children have dozens of games. Creating the environment where the airline trip is actually ‘time out’ takes the experience to a whole new level. It isn’t about waiting to arrive – the journey becomes an end in itself. Hooking up our electronic gizmos and providing interactivity is another step in the right direction.

2. In-flight Internet
Time out is not what everybody wants though. While it can sometimes be a blessing for frequent fliers to get away from an always-on world, this should be a choice not an imposition. Most carriers take the imposition route and resist the straightforward step of in-flight internet. Lufthansa went there in 2003 and offer full access to mail and the web. That makes them the airline of choice for many who have little else to do as they traverse the skies of Europe.

There is no technical reason to resist this change. Some airlines insist it is a large cost overhead and that the related regulation is still vague. Hogwash. With Teutonic efficiency the Germans are leading the way and will continue to win business as others procrastinate.

3. In-flight Phone
A word on the phone – precisely something you can’t do very well at the moment. Even the FAA aren’t in the way of conversations at 35,000’ – they just carry the blame (quite wrongly) as airlines seek to protect their investments in hardwired back of the seat lumps of plastic that no one uses because of the expense.

4. Read & Leave
Reading is such a popular pastime on flights that a whole genre of fiction has developed – the airport novel. Easily read and soon forgotten these books tend not to find a permanent place on the bookshelf at home. Why not bring these books on board? Rather than buy them, customers could browse, read and leave behind whatever took their fancy. Condensed novels, chapter samplers and short stories could also come into their own as word length and flight time are aligned.

Book retailing is a competitive business, so there is a commercial angle that could be exploited. Intelligent use of sponsorship, discounts for subsequent purchases and other promotions should make this at least a cost-neutral offering. Perhaps the airlines are just waiting to exploit the technology that already exists to make e-books available. Should they get the benefit of the doubt?

5. Better Deals for Regular Customers
Frequent flyers – privileged or tolerated? I would suggest that airlines have very different views on this question. Generally frequent flyers are treated as non-paying passengers rather than as loyal customers. Why do accumulated miles only buy seats on the off-peak flights? I can understand the short term view of making individual flights as profitable as possible, but inconveniencing your best customers seems a strange way to run a successful business.
Surely to have prime-time flights busy with your most loyal customers is the practice
of a customer-centric business.

6. Miles for Favours
Access to popular flights is not the only benefit that should be available to the regular flyer. The experience can be easily enhanced by trading miles for in-flight benefits: drinks, food upgrades, gifts etc. With a bit of thought a frequent flyer could become a walking (seated?) advert for becoming a regular customer. “How do I get those benefits?” is not a bad question to plant in the minds of new customers.

7. Sponsored Beverages
What springs to mind when I mention in-flight coffee? The smell of fresh ground beans wafting along the aisle? I didn’t think so. I sometimes wonder whether the coffee on board is so bad because it discourages us from asking for it, keeping the aisles clear for the more profitable activities like the duty free trolley. Sponsored coffee provision from the likes of Costa Coffee or Starbucks would raise the quality and cut the cost.

8. Easy Upgrades
For some airlines this is a contradiction in terms. I travelled on a major national airline recently and discovered the phenomenon of the non-upgradeable ticket. Bounced between check-in and the “Customer Service Desk” (another contradiction in terms) I learned that I “had bought the wrong ticket” and “didn’t understand how these things worked”. Faced with the choice of paying again for a completely new ticket or accepting my fate, I chose the latter and spent the flight grumpily eyeing the empty Business Class seats from the crowded Economy cabin. Needless to say I won’t be warming the seats of that particular airline again.

Contrast this with an experience on another airline where my request to upgrade using frequent flyer miles was met with “that’s OK sir, I’ll upgrade you without taking the miles”. The difference is not better process or rules – it’s a question of culture.

And this highlights one of the key points that emerged as I sifted through my travel experiences for this article. Some of the most striking experiences I have had have come from individuals being able to do the right thing (even the unexpected thing) when it matters. A flight attendant who apologises for the fact that we are not flying on one of the brand new aircraft in the fleet (but which is still is better than most); the generous and immediate compensation for a mid-flight entertainment system failure. These responses come from liberated staff in customer-focused organizations.

Successful Customer Outcomes come from, and are delivered through, people – they should be given the opportunity to innovate to be great.

What would their list of innovations look like? Do you think they’ve been asked? I wonder.

Executive Team Asleep at the Wheel?

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This goes out to all “c” Level Executives struggling with the Credit Crunch
Is you Executive Team Sleeping at the Wheel?

Despite the potential meltdown underway in the financial sector it seems, from my discussions last week as we undertake the annual BP Group survey (see here), that many senior managers, apparently responsible for processes and performance management are oblivious to the immediate dangers during this current crisis. Almost as if the global brand makes them immune from economic reality they put down the failings elsewhere to some sort of black magic. Please if that’s the way you feel – wake up and smell the coffee!

Never before has there been a time to step forward and guide your organisation by accelerating cost reduction, improving service and preserving revenues the only way businesses can – through their business and performance management processes.

If you find yourself the pending victim of ‘asleep at the wheel’ then your choices are straight forward:
1. Blow the whistle and write to the CEO/COO/CIO anonymously (otherwise in the resulting car wreck your job may be one of those that goes)
2. And if you are the CEO/CIO/COO then ask the question “How much can we reduce costs by focusing on successful outcomes?”. If the answer is anything less than 30% in 12 months you know where the first cost cuts start!

This is not the time for the faint hearts and excuses. The time for action is now.

Company-Customer Pact

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The book I co-authored in 2006 ‘Thrive – How to Succeed in the Age of the Customer’ provoked quite a reaction from several quarters (not all favorable!).
We are now pleased to report that more organizations are placing the customer at the center of everything they do.
One recent area of growth is the Customer Pact and you can see an extract from this work, hosted at http://www.ccpact.com/FrontPage

The Challenge: We, customers and companies alike, need to trust the people with whom we do business. Customers expect honest, straightforward interactions where their voices are hard. Companies work to inspire brand loyalty and deliver satisfaction while trying to understand their customers better. It is evident that we all have a crucial stake — and responsibility — in transforming the adversarial tone that all too often dominates the customer experience.

Anyone can sign on to the Pact and we encourage you to do so!
http://www.ccpact.com/FrontPage

What Price Complexity?

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Complexity is insidious. Costs go sky high. People get confused and systems can’t cope.
When production and service cycles take forever, and costs are high, chances are that most of your processes are mired in complexity. Since Victorian times, companies have felt compelled to offer consumers whatever they want, creating a myriad of choice with goods and services each having their own process and production lines.

In turn these processes are supported by complex systems and require specific skills for bespoke services and products. How often do you hear the recital “oh we’re very different around here. What we are do is unique in the industry.”
And it probably is to the detriment of the very people you are trying to please – the customer.

Consider a few of the not so hidden costs of complexity:
1. Customer inconvenience – Your customers have to negotiate your complex system and its mind-numbing array of alternatives.
Q. Just how many Moments of Truth are there?

2. Unwieldy sales processes – The sales systems needed to support complex product lines soon grow too cumbersome, whether they require filling out complicated order forms, getting indecipherable invoices or navigating endless voice mail paths.
Q. How many rules exist to ‘guide and direct’ and are now out of date slowing things to crawl?
Q. How many handoffs occur in your processes between people, systems and services?
Eradicating those Moments of Truth, Rules and Breakpoints can change everything.

3. Impact on management – Eventually, even your managers will find numerous services and processes too much to track.
Q. How much money have you spent training people to deal with this complexity?
Remove the complexity and those inside-out approaches such as Six Sigma and Lean are not required!

4. As an absolute, the greater an organization’s complexity, the less focused its management.
Q. Where does all that management time get directed? Fire fighting and fixing problems caused by the nightmare of complexity.
Refocus management time to helping align processes for successful outcomes.

It doesn’t have to be this way.
Download the free report on ‘Accelerated Cost Reduction’ for the inside track and get on route one to success. http://www.cityprocessmanagement.com/CostReduction.html

Accelerated Cost Reduction – utilize ground breaking techniques created by the market leaders who have redefined their markets and continue to outplay the competition in every aspect of the game.

Business Process Excellence in Financial Services

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click to review

Improve efficiency and customer service, increase revenue and reduce costs
September 29 – October 1 · Thistle Marble Arch Hotel, London, UK
Workshop day one – Accelerated Cost Reduction with BPE (Steve Towers)

Certified Process Management – Two Days with Steve

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“Exceptional and life transforming. This training should be on every corporate agenda”CIO Pharmaceutical, Florida

London, September 15-16, 2008.
Let me know you saw it here – quote ‘successful outcomes’ and you’ll get a 20% Discount!

Business Transformation – Are you Onboard?

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The world of business is undergoing dramatic change. Driven by a number of factors organizations are needing to realign themselves to adapt and evolve. This transformation is global and reaches into every business sector impacting how companies create, deliver and sustain their products and services. {…} more