You may recall my prediction that in about five years, the three legacy major airlines in the US will merge and discontinue coach class service. This would leave them with a 2-class product, business and a superpremium offering I called “Imperial Class.”  You can read more in the press release, available on the Articles page.

Grant Martin, however, notes in a piece on Quartz.com, that none of the all-business-class airlines, started during the last decade, succeeded. The sole survivor, Open Skies, now flies a dual coach / business class configuration. Continue reading →

Gregory Ciotti has an interesting column on LinkedIn today, “Why Steve Jobs Didn’t Listen to His Customers.”

The subject is market research, and the question is: Should you ask customers what they want? My answer: Sure. Why not? You going promulgate an edict: “Never ask customers what they want.”?

The big issue is what you do with this information. Well, why not just build what they say they want? Sometimes this works. If I had to guess, I’d say it works pretty often because you can reliably predict that customers want problems fixed. As Ciotti notes:

Perhaps this is the truth behind Apple’s innovation — Steve Jobs did actually listen to customers, but only to find out which problems they faced, and to identify the biggest points of friction they had.

Continue reading →

Eric Beatty has an interesting post on this subject on LinkedIn, “Challenge your business model before someone else does.”

He suggests that companies examine their customer experiences and try to find “pain points” that they can solve. He cites Simple.com, Square, and Uber as start-ups that have created new business models and asks why established companies can’t do the same.

It’s a very good question. Continue reading →

As I recently reported, Delta has made systemic changes that are improving many measures of quality simultaneously.  Their financials are also improving, with the airline reporting a net income of $2.7 Bn last year. Put these two together and you have a strong indication that they are successfully applying lean principles to the airline industry.

This is great, and as a long-time Delta flyer (and million miler), I wish them well. But a recent write up by Jens Flottau  in the industry standard Aviation Week does raise a red flag.

You see, the real key to lean is orientation, and a great rule for orientation is to stay paranoid. No matter how good you are, there is somebody out there who will learn from your experience and who, because they aren’t the industry leader, is hungrier. More motivated. Leaner. Dangerous. Continue reading →

That seems to be what many CEOs nowadays are going for: “Chiefs at Big Firms Often the Last to Know” (paywall), in yesterday’s Wall St. J. The argument goes

Bosses need to know what’s going on to make informed decisions, but that knowledge is dependent on what direct reports choose to tell them.

So you have lots of levels and filtering going on at every level. Pity the poor CEOs at the end of the chain.

To which I reply, “Only if they’re stupid.” Or their idea of management is to sit in their corner offices, ponder their enormous salaries, and receive the ministrations of minions. Continue reading →

On the one hand, it’s always to good to see sanity prevail:

Delta Chief Executive Richard Anderson studies daily cancellation reports and overruled arguments inside the airline that there weren’t enough cancellations to justify the cost.

As Wall St. J. airline columnist Scott McCartney writes (paywall), attitudes such as this help explain why Delta has the lowest cancellation rate in the industry, a whopping 50% below that of the next best airlines (Southwest and Alaska) and nearly 1/6 of the airline industry average of 1.7%. Continue reading →

Another in our series on improving the performance of retail operations and improving the quality of life for people in it. Last post, we looked at Nordstrom; today it’s Chipotle. Yesterday, the online magazine Quartz ran a feature on their management approach.

To start off, you have to give them credit for having a unifying vision:

“The foundation of our people culture, on which everything else stands, is the concept is that each person at Chipotle will be rewarded based on their ability to make the people around them better,” [Co-CEO Monty] Moran told Quartz. Continue reading →

Nordstrom, as management consultant Michael Solomon pointed out in a recent LinkedIn column, has only one statement in its employee handbook: “Use your best judgment in all situations. There will be no additional rules.” This is not, as he goes on to observe, quite true:

There is, however, a second element of nearly equal importance at Nordstrom and at every other great organization: standards.  Additional guidelines and internal, codified knowledge that support these employees and multiply the power of their “best judgment.” Continue reading →