INTERVIEW: JAN CARLZON, FORMER PRESIDENT AND CEO OF THE SCANDINAVIAN AIRLINES GROUP

With this issue of IDEAS we (are proud to introduce a new section, Notable Experts). This addition has been inspired by the Specialist Conference Cycle, a feature of the recently intoduced Master of Management in Marketing.

The Masters of Management (MM) at IE are full-time, English-language programmes that offer a high level of specialization in a business function or industry. Programme length is 10-13 months, depending on whether a 3-month internship is included.

The MM programmes are designed for young professionals (average work experience and age - 3 and 26 years, respectively) who want to further develop a career in a specific field. In addition to innovative contents, the MM offer residential periods in cities like Milan , Shanghai or Silicon Valley . A differentiating factor is that top-ranking companies are co rporate partners to establish a link with the real business world.

With the Masters of Management programmes, IE is consolidating its international and portfolio diversification strategies, as well as innovating in the education of future business leaders. Currently the MM portfolio covers subjects such as, Telecom & Digital Business, Finance, and Marketing.

SPECIALYST CYCLE

Globally-oriented business iniatives face an increasingly competitive world, where research, development and innovation are key. In IE's approach to mangement training, i nnovation plays an integral role: a forward-looking mentality is essential in responding to the needs of clients.

Recognising this, i nternational gurus of recognised prestige have been invited to participate in t he Specialist Conference Cycle of the Master of Management programmes. This is seen as a way to encourage a spirit of innovation, a way to inspire, by putting students in touch with known authorities. People like Kevin Carrol (Founder of The Katalyst Consultancy and former Nike top executive), Marc Gobé (President, CEO & Executive Creative Director of Desgrippes Gobé Group Worldwide), Christian Majgaard (Former Senior Director at LEGO), Jan Carlzon (Former President & CEO of Scandinavian Airlines - SAS - Group), Michael Schrage (Codirector of MIT's Media Lab E-Markets Initiative). Anders Knutsen (Former President & CEO of Bang&Olufsen) and Tom Kelly (CEO IDEO Corporation) have been or will be in our classrooms, talking about how they manage creativity, design and innovation.

INTERVIEW

Former President and CEO of the SAS Group, Jan Carlzon is probably best known as a turn-around specialist who returned three companies to profitability within an eight-year period. He rapidly turned SAS into a moneymaker and consumer favourite, replacing production orientation with customer focus. He was also an advocate for free competition in the European airline industry.

A market-oriented innovator, he uses his expertise as a corporate leader to educate decision-makers on the importance of strategic leadership and staff motivation. He frequently speaks about strategic leadership, leadership development and service management in customer-driven organisations, drawing on his considerable experience, also found in his book Moments of Truth .

1. Please define moment of truth.

Anytime a customer comes into contact with any aspect of your business - whether with staff at the front line or however remote - is an opportunity to form an impression.

For example, in the airline business, moments of truth are:

•  when you call to make a reservation to take a flight,

•  when you arrive at the airport and check your bags curbside,

•  when you go inside and pick up your ticket at the ticket counter,

•  when you are greeted at the gate,

•  when you are taken care of by the flight attendants onboard the aircraft,

•  and, when you are greeted at your destination.

In other words, these are critical points of contact that our customers and clients have directly with us and our organization. It adds to the total experience of the customer.

2. Please highlight some of your main messages.

In today's very competitive environment, information flow is free and is a bridge among people everyday. It is not just a question of selling one service or one product; the question is to relate to those customers that have already bought... in such a way that it becomes natural for them to choose you as the first choice the next time, over and over again.

So we have to organize ourselves and focus on customers as inidividuals; know them not just as buyers but as consumers, users of your product and service. In your organization, that means communication, education and training of people representing your company to customers.

You practically need to mentally turn the organization upside down to become a customer-driven service company. When I was at SAS, we said: “We used to fly airplanes - now we fly people.”

3. In the age of ever-increasing online commerce in the travel industry, how can a company truly remain customer-driven, ensuring that customer expectations are met if not exceeded? Does that apply to all service sectors / industries?

The more competitive the environment, the more customer-driven we must be. The more competitive, the more we must transform ourselves from being authoritarian managers to strategic leaders, and give people the freedom and responsibility to represent the company to the markets and to individual customers. To do so, you, as leader, have to create an environment of trust and respect with not only words, but also emotion... communication includes information and emotion. You must let people have the possibility not only to hear what you say, but also feel what you mean.

One of the messages I send is that you should inform your people that they don't have authority to say “no” to customer needs – they only have the authority to say “yes”. If for any reason they have to say “no”, then they have to ask permission – not the other way around.

Finally, in a fiercely competitive environment, the most difficult thing in doing good business is to be brave enough to refuse or say no thanks to bad ideas. In other words you have to focus, be clear about your strategy. The company that tries to be a match to or as good as everyone else, whether in price or quality or brand, will never succeed. You must be brave enough to say this is my customer, this is my focus, and I accept when those who are not in that focus go to the competitor.

Airlines, for example, need to focus on a particular segment, such as Southwest does, thriving as a low cost carrier in the U.S. You don't want to lose customers by lack of focus; customer perception is key.

I will admit that in my own experience, while at SAS, at one point I made the mistake of trying to diversify too broadly in the travel sector. But at that time our clients knew us as and expected us to be a top, reliable airline. Not a credit card company, touroperator... as well.

In another sector, think of Bang&Olufsen: the brand is known, their price may be high, but customers count on their quality and service.

If i were starting anew, i would create a lowcost airline where customers expect us to offer services that exceed their expectations, and we do!

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