When We Need to Retool

October 12, 2008

There are times when an industry has gone as far as it can go on their current practices.  At times like that, it becomes necessary for a new player to come along and shake things up.  Most often, it takes a new player because the cost of changing the way an existing company does things is far to great for anyone to get accepted.  There are too many highly paid board members and CEO’s with too much pressure from stockholders to suggest drastically changing something within an organization.

As an example, I will use the struggling Airline industry.  Nothing seems to be working for them now.  At one point, it appeared that Southwest Airlines has come into an industry that needed a new player at the right time to change the way things work.  But it is apparent now that the change that should have been felt was not widely accepted.

When you have to charge someone an extra $20 to change their reservation on the phone, there is a problem.  In affect, you are scamming someone who is already your customer.  This person has already made the decision to fly with you.  They have already paid money, choosing your service over that of your competition.  So why make them question that decision?  Why make it any harder for them to get what they need?

When you have to charge people to check a bag based on how much it weighs without announcing that to them before they come in, there is a problem.  If I purchase a ticket online, and it does not warn me that I will pay an extra $15 because my bag is one pound over a limit, what am I supposed to take from that?  What happens the next time I need to fly, am I going to happily choose your company again and pack a little lighter?  No, probably I will do some more research and do everything possible to choose another carrier.

So what does the airline industry need?  Where does it go from here?  For starters, it needs an outsider’s persepective.  It will need a new leader, one that steps up and challenges the things that today’s giants take for granted.  How can you reward people for being loyal?  How can you save money for the company, and relay that savings to everyone who chooses your service?  Fuel is expensive, but is there a way to pay for rising fuel costs by cutting your expenses in another way?  Stop looking for little ways to “steal” money from customers.

It’s time for someone to start to think a little differently about the way that we fly.

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Innovate to Find Your Blue Ocean

July 11, 2008

Innovation can come from a number of different situations.  Sometimes innovation comes out of necessity: to prevent a company from going out of business or to prevent an industry from losing touch.  Sometimes innovation comes out of luck: product development gone wrong or a “just for fun” project goes the distance.  And sometimes innovation is a well-planned strategy.

Companies that live on innovation have always found their place in the market.  The book, Blue Ocean Strategy, written by W. Chan Kim and Renee Mauborgne, is excellent read on this subject.  Instead of fighting in the red oceans, where bloody competition is the name of the game, Blue Ocean companies create their own uncontested market.  They take an existing idea and change it to find a new market.

A company that is built out of this type of strategy is innovating all the way.  Built from the ground up on the ideals of innovation, they tend to change the game for many well-established organizations, and open up consumers eyes to greater ideas and expectations.  Some great examples they use in the book are Cirque de Solei and Southwest Airlines, two organizations that approached old industries in a new way to capture their own market.

What is your Blue Ocean?  Stop cutting prices.  Stop the negative ads against your competitors.  Find your own market and let innovation guide you to even greater success.