Category Archives: Management Training

Managment Training for every level of Leader — from junior assistant manager to CEO — we all need leadership advice, direction and assistance.

The Great Necession: Leading in Tough Economic Times

Posted on by
1

It’s not a Recession, It’s a Necession

Anyone bothering to pay attention to what’s happening with consumer spending in the current recession can note one trend: that is, even those consumers who are likely to be unaffected by the economic downturn are helping fuel the recession because they’ve gone into wallet lockdown. They’ve declared that we are in the Great Necession of 2009.

While one could argue that in a free market no job is ever really safe, 92% of Americans who want a job, have a job. Moreover, most of those same 92% are likely to have little disruption to their income streams over the foreseeable future.

So why does the housing market continue to tank and why are new car sales sitting at their lowest levels in decades? People have been scared into a Necession.

Forget for a moment that the credit markets have tightened; there aren’t any tire-kickers on dealer lots or looky-loos at the Sunday open houses to apply for credit. Why? Because no one in their right mind is going to buy a new car or house until they need to buy one.

How do you know we’re in a Necession?

Traditional large discretionary purchases (like cars, boats, vacation homes) are based on emotion and impulse, not on necessity. Cars, for example, are built to last for a decade or more, yet many Americans habitually traded in their cars every 18 to 36 months. This is what fueled more than 16 million new car purchases a year as recently as 2006. (Read our related post on the auto industry here.) We’re now at half that amount; and because of the Great Necession of 2009, we predict the auto industry won’t see the 16 million mark again before 2020. People just don’t need to buy a new car, regardless of the availability of credit, and now they know that.

The economic realities of today have taught those of us who’ve lost jobs and those of us with good jobs that we need to live within our means. One colleague recently told me he will never again have a monthly financial commitment (he called it his “monthly nut”) greater than he can cover working for minimum wage. I believe him. His spending paradigm has been forever shifted from one of excess to one of “necess.” He is a New Era Necessionist, helping fuel the Great Necession.

How to Lead in a Necession




The unfortunate reality of being in a Necession is that even when the credit markets relax and the layoffs subside, retail spending will not return for a very long time. Consumer confidence may return, but consumer spending – that is, spending like drunken sailors on shore leave – will not. The generation that lives through the Great Necession will be much like the one that lived through the Great Depression: they will change their habits forever for fear of a return to bad times.

The only remedy for leaders is to instill confidence. You must reek of confidence when dealing with your acquaintances, your employees and your customers. (It certainly doesn’t help when the media seeks a negative slant to every story – but great leaders know to control what they can control, and to limit the influence of that which they cannot.)

People are simply not productive when they fear their jobs are in jeopardy. Lacking confidence, otherwise sane managers can literally become paranoid – rendering them ineffective. The rumor mill – fueled by negative thoughts and doomsday predictions from the rank and file – runs rampant. Job dissatisfaction from an uncertain future begets customer dissatisfaction; while customer dissatisfaction begets even lower sales, leading to a further erosion of employee confidence.

It’s our job as leaders to keep all of this from happening. So let’s agree on few easy paradigm shifts:

  1. The times are challenging, but our future looks great. Believe this and live this, then use this as a standard reply to anyone (especially employees and customers) enquiring about your business.
  2. The best part about a recession is the thinning of the herd. You need to believe this and live this, as well. Feel free to speak to your employees in these terms and let them know you appreciate their hard work, because it is their hard work that will help them and everyone else at your company keep their jobs.
  3. We cannot wish our way back to prosperity. Too often we see managers looking for magic pills to solve a crisis. The truth is that anything worthwhile takes hard work – otherwise, everyone could do it. You need to gain a solid commitment to best practices from everyone in order to save your company.
  4. Sales cures all ills. While it was this very saying that partially got us into this mess (we didn’t realize we had bad leaders, because times were good and revenues were growing), returning our teams to a “selling culture” is one of the quickest ways to right any ship. Unfortunately, many businesses have focused too heavily on cost-cutting and not enough on the fundamentals of selling. Get your teams back to basics: focus on selling activities, not results, so that when the market turns, your team will get more than their share.

 

Young Owner, Old Manager: Who Wins in the End?

Posted on by
Reply

 

Questions… we get Questions

One of our readers, Anant, posted the following after reading our article from August 2008 titled The First Time Manager Dilemma, How Do You Gain Respect?:

hi, i am facing a similar problem as mentioned above with one of my older employees, the only difference is that i am the owner of my company.

Last year i joined my father’s company after finishing my engineering and have started to handle the correspondence and marketing of the company.

Initially i thought because i was a new, they treated me as like a new kid on the block and would probably fade out once i am long enough with the organization.

Most of them did change, apart from our general manager. He still thinks he is an authority over me. I didn’t mind his reactions till the time recently when my father had gone out for an industrial trip. He had asked me to get some work done before he comes, which were like level 1 jobs and could easily be done on the phone/personally meeting, nothing laborious. Its been almost 3 days since i told him and he has still not been able to complete the task. Apart from this whenever i tell him something he looks at me, giving me that expression “why is he telling me? who is he to tell me?”

This behavior of his has actually ticked me off. Kindly give me a solution to handle such kind of employee – Anant, February 8, 2009

Young man (I’m going to assume you’re a young man, as Anant means “bliss” in Hindi and is traditionally a male name), it’s time for you and your GM to face several tough realities:

  1. Every generation gets overtaken by the next;
  2. Youth is the only trait a manager cannot learn;
  3. You can attract more flies with honey than vinegar;
  4. Blood is thicker than water;
  5. Money is thicker than blood; and
  6. Your written communication skills are horrendous.

1. Every Generation Gets Overtaken by the Next

It’s the circle of life my friend: It’s exciting and great when you’re young; and it sucks when you’re old. Your father’s general manager is having a tough time facing this fact… that’s expected. Your job is to make sure that you maximize short and long term profits for your father, not to make the GM feel good about himself.

If he fails to grasp this fact, he should be shown the door.

That said, you and your father’s company might be better served if you followed the advice in point number three, below.




2. Youth is the Only Trait a Manager Cannot Learn

This fact is likely killing your GM from the inside out. It eats at him everyday, and his own fear of being replaced is going to force him to do one of two things: 1) seek other employment (not likely); or 2) go into passive-aggressive mode when dealing with you (highly likely).

Until you came along, the GM was your father’s right-hand man. Today, he sees you as the greatest threat to his existence (see point number one, above). Following the advice given in point number three might help make the situation more tolerable for you (and the GM). If it fails, it’s probably time to show him the door. (Do you see a pattern emerging?)

3. You Can Attract More Flies with Honey than Vinegar

Of course, you can attract the most flies with dog shit, but we’ll forget that for a moment, because it doesn’t really fit with this whole analogy.

I think the best way to introduce this concept is to have the great Dalton (Patrick Swayze) from Road House explain it:

All you have to do is follow three simple rules.

One: never underestimate your opponent. Expect the unexpected.

Two: take it outside. Never start anything inside the bar unless it’s absolutely necessary.

And three: be nice.

…until it’s time to not be nice.

Generally every human can figure out Dalton’s numbers one and two on their own. Dalton’s tip number three, “be nice,” takes some practice.

Anant, if you want to be nice, then it’s time to become “The New Anant.” The New Anant is a guy that loves everyone and everything. He smiles are everyone (especially his GM), and nothing ever gets him down. If you become The New Anant, you are going to be so nice to the general manager that people are going to think the two of you are dating. In fact, your father may become jealous of your relationship with the GM.

Seriously, If you want to get the most out of the general manager, you need to hang on his every word. You should ask his advice on every topic (where it makes sense) and you should strive to make him the hero at every turn. If you do everything in your power to make him look good, he will (usually) work hard to prove you right. At worst, you’ll have made it incredibly hard for him to treat you poorly – his subconscience won’t allow him to be an ass; just as your subconscience will drive you to eventually like and even respect him. (If nothing else, you’ll begin to see the world as he sees it, which will give you great insight into how to manage him better.)

If this fails, show him the door.

4. Blood is Thicker than Water

At the end of the day, you can always tell your father to fire him. After all, you’re blood and he’s just an employee. This strategy is great provided a) you are ready to lead the company as the new general manager; and b) this GM really wasn’t that effective.

5. Money is Thicker than Blood

This is where things get sticky for your dad. If the GM is strong and delivers value for the company – and the two of you cannot get along – then it’s time for Anant to find a new job.

Blood is pretty thick, but money is a whole lot thicker.

Face this reality right away and begin “working” for the GM if he’s any good. If he stinks, refer to number four, above.

6. Your Written Communication Skills are Horrendous

Seriously, Anant, I know you were writing informally when you posted a comment on this blog, but it’s important to always communicate clearly and correctly in business. Business associates (like the GM), subordinates, customers and leaders of other companies will respect you more if your written communication skills are always strong.

The good news is that you already form strong ideas, you just need to put them into a written form properly. Start by writing everything in Microsoft Word first, then running the spelling and grammar checkers before you send any correspondence. Next, you may want to read our posts covering email etiquette. There might be some overall business writing tips you can take from these.

It sounds like you’re well on your way to becoming a great business leader: you’ve clearly identified the major hurdles in your business and you’ve sought advice on how to rectify them – that takes guts and shows your leadership – congratulations. Please keep us posted, we’re dying to know how things work out for you.

 

Leadership Lessons from Corporate America’s Amateur Lobbyists

Posted on by
2

Leadership and the Bully Pulpit

Michael Jackson (no, not that Michael Jackson) loves the bully pulpit. AutoNation’s Michael Jackson, we’ll call him the “non-gloved-one,” is everywhere these days. Officially, he serves as the CEO of the largest automotive dealer group in the US. Unofficially, he serves as the primary spokesperson for all curmudgeons who are good with a hammer (so they think everything is a nail).

MJ seems like a great guy – the non-gloved-one is well-spoken in an everyman sort of way – he exudes both a confidence and an “awe shucks” humility that seem genuine. Great traits for leaders.

Character (on the surface) does not appear to be his problem – Jackson, you see, is quite the character. Our issues with Mr. Jackson stem from his inability to wean himself off his love of the camera and microphone; and his incredibly narrow sense of how to fix what’s wrong with the economy.

It’s Not All about the Cars, Stupid

Certainly, it’s as prudent for this Michael Jackson to advocate for the auto industry as it is for that other Michael Jackson to advocate for unsupervised slumber parties at Neverland Ranch. We get it – your shareholders benefit if the auto dealers benefit – that’s your job.




To this end, Mr. Jackson is advocating (in a big, big way) for Congress to dramatically raise the gasoline tax at a time when Americans need every penny in their collective pocket. An increase in the gasoline tax? Are you serious?

Let’s put aside whether or not a gasoline tax increase will help his industry (though we think its benefit would be dubious, at best). Raising taxes in a recession would be disastrous for the economy, driving consumers to spend less and hurting the overall economic health of all retailers (including the health of car dealers) even more.

One could argue that part of the woes his industry faces today were directly caused by the very $4 per gallon gasoline he so desperately wishes would return. Jackson’s argument – that his dealers (and manufacturers) will sell more electric and hybrid vehicles with a huge increase in the gasoline tax – is probably a sound assumption… for the short term.

Leadership is more than a Great PowerPoint Presentation

Like Al Gore’s An Inconvenient Truth, Jackson appears to be crisscrossing the country looking for converts. We are not moved.

We cannot buy-in to his assertions that increasing taxes, especially gasoline taxes, is a good idea for what ails car dealers today. Automotive retailers, unfortunately, are selling vehicles today that are built better and last longer than their predecessors. This is really no different that a few years ago, of course. In 2006, when America’s car dealers sold over 16 million new units, consumers felt good about their present and future situations. They were willing to spend $30,000 on a new car even though their current vehicle was running just fine.

Buying a car in 2006 was a discretionary event; ripe with impulses and emotions. Buying a car in 2009 is a necessity event; driven by the need to get from point A to point B. Increasing the tax on gasoline (or raising any tax for that matter) makes any major purchase a necessity event. We will only buy a new car when it becomes necessary for us to do so; and if we purchased one of the 60 million new cars sold in the last four years, we probably don’t need another just yet.

This is why Jackson is advocating a hike in the gas tax. He believes that we’ll be forced to get rid of that 2006 Hummer once and for all. Okay Mike, once we trade in the gas guzzler for a Honda Civic Hybrid out of necessity, then what?

America’s car dealers, especially AutoNation, need Americans to make discretionary purchases to thrive and survive. Discretionary purchases cannot happen without discretionary income. Increasing taxes decreases discretionary spending; decreasing taxes increases discretionary spending. Sorry to break it to you Mike, but it really is that simple.

America Needs Higher Gas Taxes

From national security and environmental perspectives, we would love nothing more than for America to be 100% energy independent. OPEC, and especially the countries that make up OPEC, concern us. America cannot, over the long term, be dependent on “third worlders” for the growth of our economy.

Once our economy stabilizes, it may make sense to raise gasoline taxes. The revenues generated from these taxes could be used to make necessary infrastructure improvements; and the higher price of fuel, as Jackson notes, will drive consumers to purchase more energy-efficient vehicles. It will also drive them to drive less. All good for the environment.

In a recent podcast available on AutomotiveNews.com, Jackson even jokes that he could eventually become a Democrat with his drive for higher taxes. Really? Hey Mike, we’re sorry to inform you that advocating higher taxes probably makes you the Chairman of the Democratic Party today. Interestingly, in this particular podcast Jackson has moved off of his stance of advocating for the immediate tax increases, and has a newly stated goal of increasing these taxes in 2011 or 2012.

Hmm, then why shout from the rooftops for these increases in 2008 and 2009? Wouldn’t Jackson’s shareholders be better served if he lobbied for something that would actually spur economic growth? Perhaps something like a tax decrease?

As much as we like him, we have to tell this Michael Jackson to stick to moon walking and leave the economic decision making to someone (anyone) more qualified. Great leaders know when to use the bully pulpit and when to avoid it. They also understand that just because someone is giving you a microphone, doesn’t mean you should speak.

Circuit City, Where Service Was Never State of the Art

Posted on by
Reply

Circuit City – We Told You So…

In what was probably the easiest call in the last ten years, we told you Circuit City was going to go all the way (read our November 12, 2008 post if you don’t believe us). Back then we said you shouldn’t “be fooled by their reorganization plans; Circuit City is down for the count and not getting up. Lousy leadership is lousy leadership, and court protections will change nothing.

“While Chapter 11 might provide a short-term reprieve and allow them to stock their stores for Black Friday 2008, they’ll not be around for Black Friday 2009. (Heck, they probably won’t make it to Good Friday.)”

We were right, and we just want to gloat.

Circuit City, unable to work out a sale of the company, said Friday it will close its 567 U.S. stores and cut 34,000 jobs. Nice going, guys. Please don’t blame this on the economy. You were the nation’s second-biggest consumer electronics retailer and you failed to build a sustainable business. There’s no excuse.




What’s amazing about the retail bankruptcies during this recession: KB Toys, Mervyns, Linens ‘N Things and now Circuit City; is that none of them are surprising to us. If you ever stepped foot in one of these stores and compared them to their biggest competitor (Toys R Us; Macy’s; Bed Bath and Beyond; and Best Buy, respectively) you’d know who was the best and who was not. You’d understand that it would not take much to cripple these also-rans.

Whether it was another big box selling the same goods or Wal-Mart, Circuit City never stood a chance. They could not be expected to survive even a slight downturn if their leadership was unwilling to have the singular goal of building a sustainable business. Their selection was inferior, their prices appeared non-competitive, and their salespeople were clearly on commission. It was never “fun” to shop at Circuit City, and the leadership should have recognized this.

That was their job. Of course, the employees could have told them… if they bothered to ask.

The Death of Data-Based Decision Making

Posted on by
Reply

Why Does My Industry Refuse to Use Data?

True story – of course, whenever anyone says or writes this it generally means that everything else they’ve ever told you is BS – anyway, true story: a highly compensated colleague wrote to a group of fellow highly compensated colleagues and asked “does anyone have any data on whether this widget produces results?”

The emailed responses from two of his highly compensated colleagues were shocking:

  • “I understand they’ve shown good results in Orlando and Tampa.”
  • “This widget really moves the needle in Dallas.”

These were their complete responses. Did I miss something? Where is the data?

This brief exchange of emails is merely a sample of what’s happening in my industry (and probably happening in other industries, though I don’t have any data to back up this claim): We’ve decided that actual data is unimportant.

This is sad, especially as technology has provided us easy, quick and painless avenues to gather data about nearly every aspect of our business. Gathering data and making data-based decisions (AKA: using business intelligence reports) should be one of the greatest benefits of technology we enjoy, yet we still rely heavily on gut feelings and opinions to determine where we spend our money, whom we hire, and what initiatives we pursue.

Data vs. Opinion

Having had my fill of opinion-based decision making where good data is available, I challenged the two highly compensated colleagues to send me some proof to back up their claims about the effectiveness of this particular widget:

“Sounds great, can you send me the data to back this up?” I replied, and waited.

And waited, and waited, and waited. After two days of waiting, I sent a follow-up email copying their direct supervisors:

“I know the Northeast Region really wants to get moving on this widget, and they’re excited to hear about the results you’re seeing in your markets. Can you send me some data that can prove the ROI? We’re struggling to show good numbers everywhere else with this widget and some good results would help save the project.” I wrote, and waited.

Amazingly, with their bosses copied and everyone on high alert to justify expenses, I received the following two messages from the highly compensated colleagues within 30 minutes:

  • “When we looked at the data, it seems it was inconclusive in Dallas. We’re thinking of canceling it.”
  • “Nobody in Orlando or Tampa could prove it works, but they’re sure it was helping sales. They’re going to measure the results this month and then make a decision.”




One claimed they examined the data (Dallas) and one still relied on opinion for now (Tampa/Orlando), but promised to examine the data next month. In the meantime, we’ve potentially wasted more than $100,000 over the past year because no one bothered to look at the data. This was just one product covering a small part of our business. What would we find if we stopped allowing opinions and held everyone to a “just the facts” dictum? Scary…

Data-Based Decisions are Easy

Our industry is one that has had to be pulled (kicking and screaming) into accepting that the Web is an important marketing channel. Now that we’re there, we refuse to demand data, information or business intelligence to help us make decisions. We rely on our collective gut, because our gut was good enough ten years ago, so it’s good enough today.

It’s a shame, really, because using only your gut to make decisions might appear to save you time. While using your gut to make a decision keeps you from having to gather data, it also requires that you continually reconsider the decision: using additional time to determine if you made the correct assessment. When you use your gut, you spend additional time second-, third- and fourth-guessing yourself. You are never certain you made the best decision.

When you use data, like an ROI report, you can quickly and easily decide to eliminate the low ROI widgets and increase your usage of the high ROI widgets. Then, you can put the data away until the next set of numbers (quarterly, monthly, weekly) becomes available. Give these new numbers a “once over” to validate you made a great decision last time or use these numbers to tweak your earlier decision, and move on. Nothing could be easier.

You Were Hired for Your Gut

The best part about using data to help you make decisions is that the data will never care if you also sneak in your opinion here and there. In fact, if not for your gut, your company could just hire a computer to do your job. It is precisely your experiences, history and opinions that make you a valuable commodity. You begin to lose your value, however, as soon as you fail to utilize all the tools (including data) made available to you to do your job.

 

Management Training Blogwatch – January 5, 2009

Posted on by
Reply

Management Training Blogwatch – Best of the Blogs

We scoured and we scrubbed and we were left with just few posts and articles worthy of making it into your reading rotation for all things Management Training.

Perhaps it was the holidays and everyone was taking off between Thanksgiving and New Year’s Day, but we simply struggled to find more than just a handful of very good posts from the past five weeks. (The pickings were so slim we even had to include two of our posts into the mix.)

Although not from a traditional Management Training Blog, we recommend the first post below: excerpts from a great interview with Dilbert creator Scott Adams. A worthy read.


We’re Dilbert Fans
That inspired him to join a management training program. Adams left banking when his then-boss “told me the company already had too many generic white guys in senior management, and promoting me would only make things worse. …

Leadership Management Training
Corporate executives often book leadership management training courses for their employees in order to boost the workers’ skill sets and effectiveness when dealing with subordinates.

Maslow’s Hierarchy of Needs
A strong understanding of Maslow’s Hierarchy of needs should be incorporated into any management training program. Understanding the hierarchy will help managers to understand the behaviors of their employees as they move through life. …

Management and Ethical Responsibility
Think about what you can do the next day to improve yourself. Are you setting a positive example for your employees?…

Epic Living – Leadership Development Career Management Training …
In times of crisis (economic or otherwise) organizations begin to think about leadership. Actually, they think of it often. What they do about it is another thing. I feel for those organizations that neglected growing leaders when …

Real Estate Blog – Lessons in Management – Lesson II
Here is the second installment of 6 of the Management Training. Read Lesson I before reading this one. This is an important one, so don’t miss a word. Lesson #2 A priest offered a Nun a lift. She got in and crossed her legs, …

Great Leadership: Successful Succession Management
EffortlessHR Blog · Time to vote – Bloggers Choice Awards 2009. 1 week ago. Epic Living – Leadership Development Career Management Training Executive Life Coaching Author …

Delta Airlines – Not Sweating the Small Stuff – Leadership Lessons …
Leadership Development & Management Training Resources and Topics. More Leadership Lessons from the Airline Industry – Delta Stubs Their Toe (Again) · TheManager

Brett “Cuatro” Favre and the Leadership Lesson of Humility
Leadership Development & Management Training Resources and Topics. An Update to our Leadership Lessons from Brett Favre · TheManager…

Secret Tips For Delivering a Persuasive Sales Speech …
Business Management, Training. If you’re new here, you may want to subscribe to my RSS feed. Thanks for visiting! Delivering a persuasive sales speech is not really as difficult as it seems once you …

 

Catch Your Limit: Management Consultancy, Leadership Blog and Fish Cleaning Service

Posted on by
1

 

Great Leadership Blog Worthy of Special Mention – CatchYourLimit.com

As our regular readers know, we produce four semi-regular Blogwatch series covering Time Management, Sales Management, Management Training and Leadership Development. In these series we attempt to help you cut through the clutter and discover great writing and great advice.

While we think we do a pretty good job of culling the crud, we sometimes overlook great blogs. When we do, we’re excited when readers bring these wonderful sites to our attention.

One of our readers turned us on to a great Leadership Development website that had not been a part of our Blogwatch series, called CatchYourLimit.com. This site and its accompanying blog are the brainchild of an innovative leadership consulting company known as Catch Your Limit.

What makes Catch Your Limit so innovative is their approach to management and leadership consulting that moves away from the starched shirts and toward what really matters: coaching; accountability; consistency and cleaning fish. (Long story, you have to read their About Us page to understand.)




Based on what we learned about this innovative consultancy and their great blog, we hereby amend yesterday’s Leadership Development Blogwatch and add the following post:

Transparency is to Employee Engagement as Failure is to Innovation

Leaders will never gain the trust of their employees, especially in uncertain times without a significant level of transparency. As innovation needs experimentation and failure, employees need transparency from leadership for engagement to take place.

One of the difficulties many organizations are facing is transitioning from a “corporate memo” top down communication culture to having honest and candid conversations with their employees. The former creates an environment of rumors, gossip and anxiety while the latter allows employees to feel a certain level of security remaining engaged and productive.

Like improving the economy it’s easier said than done. It isn’t easy to tell people they may lose their job. It isn’t easy to discuss a negative financial outlook…

(To read the rest of this article and other great posts on CatchYourLimit.com, please follow this link.)

 

More Leadership Lessons from the Airline Industry – Delta Stubs Their Toe (Again)

Posted on by
1

More Leadership Lessons from Delta Airlines

In a recent post, we admonished Delta Airlines for the ill-conceived, confusing Delta Breezeway enacted in late 2007. It seemed that even months after its introduction, most Delta gate agents and Delta frequent fliers still had no idea how to use them.

We are proud to say that between Thanksgiving and Christmas, Delta gate agents suddenly began using the Delta Breezeway consistently across the seven different airports we used. (This is a record, to be sure, as any Delta gate outside of Atlanta or Cincinnati employed a different set of rules when using the Breezeway for the first ten months following its inception.)

Congratulations Delta for finally making sense of something so simple – of course, we still believe you could have rolled this out more intelligently; employing proper project management principles coupled with better education and training.

Delta Airlines – Not Sweating the Small Stuff

The debacle that was the Delta Breezeway reveals a lackadaisical attitude in the Delta boardroom for truly serving the customer. Delta simply doesn’t sweat the small stuff. In any normal leadership situation the ability to not sweat the small stuff is an admirable quality. Given the razor thin margins of the airline industry, it’s almost required that you sweat everything – especially the small stuff that impacts your customers.

Southwest Airlines (SWA) gets it. The SWA leadership has always been known as a group that plans everything from boarsding a plane to their overall business health. SWA gets it; and they generally get it right the first time.

As a disclaimer, it’s important to note that none of the AskTheManager editors enjoys flying on Southwest. Their cattle call style of assigning seats and loading planes might make logistical sense – and families with kids seem to be okay with it – but it is terrible for business fliers who travel for a living. That said, SWA is the healthiest airline in America and deserves to be studied by those who are struggling. (Hint for the other airlines: look at SWA’s leadership, and how the company tests and measures before they implement wholesale changes.)




You Cannot Test Ideas in the Boardroom

Southwest’s style of loading planes, as we wrote, has been a nuisance for business travelers – especially those who like to lounge before they fly. We must know we will have the aisle seat in the exit row and we don’t want to have to fight for it.

In the airline industry, unloading and loading planes quickly – faster than your rivals – earns you a competitive advantage. SWA gets this. They’ve made a conscience choice to forego most business travelers in return for better margins. That is their choice.

It’s old news, but Southwest experimented with assigned seating for about a year only to decide to slightly modify their 36-year old cattle drive in favor of a more orderly numbered seating system. (To read more about this decision, here’s a news story from September 2007.) No assigned seats, but with less of a cattle call. The leadership lesson for Delta is not that they should switch to a numbered system for assigning seats, rather that they should alter the way they enact changes at their struggling airline.

Last month – just days after Delta completed its merger with Northwest and proclaimed that there would be no immediate changes – Delta made an enormous change to the way everyone, including frequent fliers, gains access to premium seats (exit rows, most aisle seats and coach seats near the front of the aircraft). They adopted, without warning or testing, a system that we’ve been told was in place at Northwest. They wanted everyone to pay extra for those seats.

While we’re are certainly not opposed to Delta raising revenue in creative ways, we were absolutely shocked to learn that as frequent fliers we didn’t even have access to those seats until check-in. You see, Delta wanted to sell those seats at a premium to regular fliers, so they blocked frequent fliers from gaining access to those seats.

They clearly tested this concept only in the boardroom, and it passed with flying colors.

Oops, Time to Reverse another Bad Delta Decision

To their credit, Delta only made their coveted Platinum and Gold members suffer for a few weeks before they reversed this idiotic and untested change. We can only imagine the emails that flooded Delta.com complaining of this policy (we know of a few sent by us that were not pleasant).

The moral of this story for all businesses is to follow the Southwest example. Even when the world was telling them for decades that their system for assigning seats should be altered, they resisted the temptation to enact wholesale changes and tested (for months, in controlled situations at just a few select locations) a new system before determining a course of action.

This is why Southwest has fared better than Delta and the other large airlines. The Delta leadership could learn a thing or two from Southwest.