Moments of Truth: Putting strategy into action

Volume 9 Letter 3

In 1985 SAS airlines won the dubious crown of “Worst Airline of the Year” ranking dead last in a customer poll in both customer service and dependability. Adding further to the insult SAS also ranked last in profits as a percentage of sales. To round out their stellar year they fired their CEO.

Jan Carlson was hired as the new CEO and immediately he developed a strategy to focus on the customer, a big change from the command and control strategy of the previous management team. He moved decision making into the hands of the front line employees trusting them to do the right thing for the customers and for the company. In a dramatic turn of fortunes, one year later SAS ranked number one in all of the same customer satisfaction and profit categories listed above.

Jan Carlson’s strategy was simple – he identified every potential contact point between a customer and a SAS employee. He discovered that each customer interacted with an average of five SAS employees per flight and each interaction lasted for approximately fifteen seconds. He estimated that there were fifty million points of contact per year and each fifteen second moment he set out to make as pleasant and as memorable as possible. He called these contact points “Moments of Truth”.

Developing the customer focused strategy sounds simple enough but how did Jan Carlson get twenty thousand demotivated and very likely angry employees to buy in and execute it? This is perhaps the most difficult part of any strategy – “the strategy execution”.

  • Create a sense of urgency: SAS was losing money. Everyone knew this is not sustainable so Jan Carlson’s sense of urgency was already there. Today’s economy is also creating a sense of urgency – use it to your advantage.
  • Fight for a cause: Profits and market share are not a cause …being recognized as the best in customer service, making someone’s travel experience memorable is a good cause. Find a cause and link your strategy to it.
  • Make it tangible: Jan Carlson called his program “Moments of Truth” – a 15 second snippet of time to make a customer’s travel experience memorable. Find tangible actions that your people can engage in to drive the strategy.
  • Create ownership and emotional involvement: SAS allowed each regional team to develop their own Moments of Truth – special things they wanted to do. Allow business teams to develop their own version of the strategy adapting it for their specific market. This creates emotional involvement; people buy in and want to show they can deliver.
  • Lead from the Front: Jan Carlson regularly went out on the floor to work a shift in a front line position and rewarded individuals and teams who went out of their way to create a Moment of Truth for a customer. Don’t push people into a strategy. Instead, force them to keep up with you.
  • Create competition: Jan Carlson measured customer satisfaction by region and posted the numbers. Make your divisions compete for your attention – measure their progress and compare them.
  • Create accountability: SAS team leaders were expected to drive the strategy. As Jack Welsh from GE once stated “One throat to choke” everyone should know what they are responsible for and that they will be held accountable.
  • Be ruthless with grumblers: Some people at SAS didn’t get it. They thought losing money and upsetting customers was just fine. There is no room for this type of person. Isolate dissatisfied people otherwise they will spread panic throughout the group.

Executing a strategy takes more energy, effort and time than anything else. But when you really think about it – if your strategy is good, on what else should you be working?

For the full story on SAS see “The Essence of Leadership” by Mac Anderson (2005)

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