Food for Thought

The Need For Consultancy

“Our Heads Are Round so our Thoughts Can Change Direction” [Francis Picabia]

I lately got involved in discussions about the need for consultancies and how that market suffers the first from the financial crisis.

German top-consultant Roland Berger was quoted saying “You cannot push-start a car from the inside”. Which I found valuable. But it reminds me of a major shortcoming of todays managements: I have not needed to push-start a car for decades. The view is rather rare on the streets. But I need to confirm: The job of a consultant in most cases is to have an unbiased look at the company, speak to the people, listen to their advise, organize it and present it to the company. At that level, some creative suggestions on how to solve the identified shortcomings helps to make you a good consultant.

Another cause is the discouraging of creativity by the bean counters. “Do your job, don’t think” is very common in larger companies with strict hierarchies. Mostly these companies are “managed” by bean counters, thinking of staff only as a little wheely in the machine – a “human resource”. Exchangeable, not valuable. In such cases I either can make these managers understand the value of a reevaluation of their values and the advantages of motivation of creativity, but more often I can only help them by voicing what they overheard for too long from their own people.

So the job of a truly good consultant (but they are rare) is to listen. To gain the trust from the people. To qualify, summarize their needs, consider solutions and present the findings to the management. The best ideas on the job are usually not mine. My experience only helps me to qualify them and put them into a structure and present them to management in a way they understand. Being the moderator…

Food For Thought.

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Crumbling Facades

What is money all about?

First the financial market in the United States failed. Constructs where a single person is responsible for the loss of 50 Billion US$ are just the top of an iceberg. That ice berg turned and we all feel it’s repercussions.

But it was not the U.S. that caused the problem, but the greed of financial managers and the corruptibility of the politicians that made it possible. German’s federal state banks had to be sold, only to learn the buying banks from the other states are simply in similar troubles.

Deutsche Bank manager Ackermann and Deutsch Bahn boss Medorn keep up the facade of the reasoning for the indecent salaries they and their buddies in other corporations pay themselves, blaming others in their companies for the problems their companies face. Isn’t it the CEO who is ultimately responsible? If he has his company not in check, he may not be worth his salary. If his company looses money, they make a bonus? When they fire people, they make another bonus? “No risk, just fun” the yellow press recently titled…

Companies asking for help, often “suddenly” coming up with hidden “treasures” and financing leaks often as high as the losses so far admitted. Oops. If I have a management that has no up to date information about their financial situation, I can imagine this in a start up or small company – but we talk “global players” here! My advise: Fire them! Sue them! You got to, they got to learn the basics of business before they are allowed any management job again!

Politicians having been informed as early as August about the financial troubles of German Hypo Real Estate but now claim their innocense?

In Russia, Oligarch Boris Abramovich lost first the control on AirUnion, which meanwhile “somewhat” restarted as Rossavia as a state airline, now looses Malev as well. His buddy Lebedev is out of a deal to take over German Öger Tours, he’s short on money – weren’t these the people anyone worldwide envied for their incredible wealth?

And wasn’t “U.S. President” a synonym for integrity? Thank you Mr. Bush… What a legacy for Barrack Obama.

So with all these crumbling facades, it is not the time for blame. But it’s time to roll up your sleeves and work to get us out of the mud hole these irresponsible and greedy idiots drove us all into. I am daily facing cases, where good people loose their jobs to managers, still thinking to cut heads is the solution. Or airline managers believing that it’s important to increase revenue at all cost. Flights take off fully booked but causing the airline to loose money?! That has nothing to do with bad sales, but with a bad, price-only-focussed strategy of short-sighted managers. Good service needs good people. But our industries miss to show their own strategy. What makes an airline commercially successful? More aircraft with less people? A drop in service? A university graduade being sent to the key account having no idea what a cross ticket is or what makes a travel reseller select one airline vs. another? Pay for coffee inflight? The next business for airports and catering companies is logically to have vending machines offering snacks and drinks at the gate (or on the aisle infront of the waiting room) at cost below that offered inflight…

But what keeps my mind busy is the question, why the facades visibly crumble, why we work in an industry where everyone tells me no one in his right mind would invest in? I did question the human “resource”-thinking. I hear from Lufthansa that the “Lufthanseat” (the employee news) is off reality. American Airlines staff tells me they have never heard of the company update video I remember from the 80s.

Our industry is like the opposite to the car industry, but not any better: Where they focus to build the big cars for big money and ignored the growing demand for low-consuming cars, our managers seek quick revenue at any cost…? Load factors and market share at the cost of yield and income.

We can learn from the current U.S. president. Airlines got to learn again that the manager is head of the family. That means (s)he also has to look after the family income and budget. But they got to get out of their glass domes, listen to staff and customers alike and finally start face reality!!! And come to grips and learn to make money!

Food For Thought – your thoughts about this sure are welcome…

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St. Florian’s Principle²

Oh holy dear St. Florian
Don’t burn my house
Take the neighbors one

Four related cases in the past weeks triggered this Food For Thought:

German Rail – remember Lufthansa…

The IT system of German Rail crashed, disabling not only the entire distribution for a day, but also the train guidance system EBULA causing major delays on train schedules, stranded passengers, the whole nine yards.

The German FVW titled its blog “That wouldn’t have happened in the past”. In m comment I referred to Lufthansa’s IT-crash in 2004 (German article). It is not impossible for IT to fail: A “99,9% up-time” is an +8 hour outage. Usually at the most busiest and inconvenient times.

Purely incidentally I was once at Frankfurt airport when the system failure disabled issuance of boarding passes. To date, I do not understand, why the staff just sat back and delayed boarding for “technical reasons” until I came, wrote the seat numbers on blank boarding passes and handed them out to the check-in agents. A wonder: NO single traveler sat on any middle seat, they either had a window or an aisle seat. I think that never happened ever since 😉 And that flight was about the only one that left that day “on schedule”…

But the believe in the invulnerability of the IT-systems is as unfounded at is is common. Contingency planning for any possible natural disaster, but none for the case of a computers black out! There were processes in place “b.c.” before computer. Have copy samples of “manual documents” dusting in a folder in the closet is not much of an investment, but it could be the difference to a cancelled operation. And for the case of a power outage just a box somewhere with enough copies for a 24 hour backup could not be that expensive either…

And even if you rely on it, German rail sure saved a few hundred Euros not investing on a cache memory for the train guidance system that would have saved them from major train delays…

Don’t they ever learn? Bean counters…

Oh holy dear St. Florian…

Striiike…

Image courtesy -die Welt-, click for full image series — Image courtesy “die Welt”, click for full image series

It is simply a miracle how lightly the passengers of U.S. Airways got out of a potentially fatal situation that is not uncommon in the aviation industry: Bird strike. Yes, the pilot is a hero, but as usual that means he has been faced with an impossible situation and by tons of luck was able to avoid desaster by a hair. As safe as flying is, accidents happen.

Reports do question the efficiency of the New York authorities. It’s not far from the hudson to central Manhattan. And a bird strike can disable steering capabilities… Let’s say, they got another wake up call.

Friends called raising a discussion related to my WIG-idea. No, that one is also “stalled”. But yes, In case of a bird strike, a WIG would not crash but simply drop some meters and float. And despite the fact that I am sure, countries in the tropical belt, especially faced with global warming should have a vital interest to push that technology, Mauritian Air Taxi just ordered a fleet replacement using standard engines.

Oh holy dear St. Florian…

Nokia

Yes, I know gloating is not nice. But a report last week on Nokia is a case that does make me smile. Nokia in 2007 shut down their plant in Bochum from one day to the other to replace it with a newly built plant in Romania. The result: Nokia’s reputation went through the floor (they became “the example” in Germany), their sales dropped, the Romanian plant only employs less than half of what they planned for. So the bean counters were miserably wrong with their previous assessments about the advantages for Nokia.

The closing of the report said something like: In the retrospect of the financial crisis, sure Nokia was just a little premature, but it shows how wrong it is to focus on numbers and short term profit only, underestimating social cohesion in crisis. It’s tough to calculate people’s reactions. And yes, more than 1.300 of the 2.500 former employees still have no new job… Them having the usual 50-100 friends and relatives in direct vicinity plus the usual 50-100 friends of these friends that are being aware of that, even on a conservative calculation that accounts easily up to some 5-10 million “lost customers”.

Oh holy dear St. Florian …

Uptime

Speaking with the IT-expert in a German tour operator about “dynamic packaging” he gave an example of his counterparts in other companies to target 70% uptime of their GDS-based functions. The issue we discussed being “time outs” on API-calls on the GDS causing vital systems to stall. We agreed. 70% is a farce! 99.x is the necessity. 99.9+ must be the goal. Having been pace makers on the IT-networking since back in the 60s (SITA, Sabre & Co), the travel industry has lost its drive.

Asking about why the tool they use does not have a function to check on API-calls for a time-out, I was told that the IT-company developing the tool did develop it for “agent use”, not for an “Automator” working unsupervised…

Oh holy dear St. Florian …

Do you have other such cases?

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Job Challenge or Play It Safe?

I am recently faced with the question, if I shall take up a very challenging position, asking the best of my abilities, thus meaning fun, but at high risk of a temporary assignment … Or play it save and go for a job I can do good, but which does not pose any real challenge but routine work – in return for a safe job?

And many friends face a similar question. Do they leave their “secure” job for another one around the corner they don’t know how “secure” it truly is? Monetary thoughts, very high valued by the bosses are of minor interest to most. It must be decently paid. No question about it. But if that is the case. Would you trade safety for some risky challenge? Sure – this answer did change quite a bit since the financial market turned the entire world into a madhouse.

So we all have to think about this question and give it serious consideration. But it can not be generally answered. Any one’s risk assessment is different. It depends on obligations to others, family, credit for a house, etc., etc..

If we have a challenging, well paid job and loose it? It is sad to see friends going broke, their spouses leaving them when times are no longer luxurious. So what values are important in life? At the same time, there are many companies speaking not of personell, staff or “our people”, but of human resources… What messages do we get from that?

Reconsider your values…

Food For Thought

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Have Space Suit – Will Travel

… is a book title. I referred to it in a discussion about relocation, where I want to share my experience here.

I found three “types” of people in regards to the willingness to relocate:

Type 1: The Earthbound
They grew up, work and will die in their home town. Maybe relocate to the next bigger town, but within a vicinity. They are rooted in their environment, friends, family.
Type 2: Upgrade + Stay
Relocate once to where they believe they find their fortune, root there and stay there. See Type 1.
Type 3: The “Bird of Passage”
Have Space Suit, Will Travel”. Will go, whereever a good job is offered knowing you can find friends anywhere and you can blend into any environment.

Concerns voiced in the discussion where related to environment, political insecurities, missing infrastructure, religion. These are usually Type 2’s, relocating only at forced necessity, but they prefer to stay where they are.
Many “birds of passage” evolve into a Type 2 when they get “tired”.

My only concerns on any relocation are (family and) my books. Everything is replacable, but I admit, my books I would miss. All my music is already MP3 and thanks to Terrabyte portable drives, it is no longer a problem to take movies and music along, but I did not yet find a good “book reader” replacing the paper version…

How do you think about relocation? Have I missed anything important? Thank you for feedback 😉

Food For Thought

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IATA says Aviation declines. Really?

According to IATA General Secretary Giovanni Bisignani, aviation warns of a decline in global aviation. But is that reasonable? Yes, global economy suffers. But look at the global maps and you will find a clear relation between airport and decent aviation and the size of cities. Aviation is a key motivator for business, but the travel industry suffers from a major inferiority complex:

Travel Agents: Any financial consultant who at the end of the year gets you €1,000 interest a year will be decently paid, but the consultant where you spend €5,000 for a vacation shall work for free?

Airlines: Global economy needs aviation. But thanks to price dumping (and not only since “low cost”), airlines operate for years at the edge of commercial harakiri.

In December, I was asked by an airline manager, what I would change in the airline industry if I’d have a chance. What I mentioned, many of you heard from me before again and again:
Remove the price tag from the tickets! No other industry in the world provides the information about the price the seller pays for the product. Or you would not buy a car or even a yoghurt without arguing with the cashier about a discount! This is a relic from the decades when airline tickets were decently priced and the travel agent truly was an agent, receiving 9% commission. At the time, many agencies cross-financed other business with their airline sales. An Economy Class ticket for €2,000 at 9% was a nice deal… The hotels, at the time frequently not paying the commission were “negligible”. That’s “the good old days”! Gone.
But if the travel “agent”, or better the travel consultant sells today, they get no commission. Then why do the airlines show the price? It is totally outdated thinking that must be addressed.

The second thought I had in mind I mentioned last week: Airline sales is “suddenly” en vogue again. The managers promoting sales-free and sales-independent “self service” and “internet” without a strategy find themselves the most hit by the financial crisis and the recessive commerce. Because cheap flights sell themselves, but they are also the most vulnerable. Selling a product is a question about long-term relation. So better have or build a sales team with a personal reputation in their market. As they represent you.

Food For Thought. Please share yours 😉

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Revival Of The Sales Manager

In the past months, IATA secretary general Giovanni Bisignani has published one horror scenario for the airline industry after another. At the same time, I have worked with an airline that had always addressed e-Commerce as a part of the sales portfolio and in the past year increased their sales force beyond the airline’s growth figures. At the same time, they announced record revenue and earnings where their direct competitors struggle to survive.

The following focuses on airlines, but is similar in other industries (i.e. hotels).

Since 1994 I address Airline Sales & e-Commerce in my annual ASRA-presentations… One concern I try to communicate ever since is the need for airline sales managers to adopt the new technologies into their product portfolio. The stronger e-Commerce gets, the more important that knowledge becomes. But just lately a friend of mine, being Manager Scheduled Flights Procurement – sitting on the other side of the table – complained that many airline sales managers have no idea what their company does in regards to e-Commerce… Say what?!

In fact there are two issues I see in need to be addressed:

1. The new role of the airline sales manager
In a highly dynamic development on Airline Sales & e-Commerce, the new airline sales manager has to be fit to not only know what the own company does in that field, but he is also the scout to monitor what goes on in the market and report it.
But: Few airlines have yet build the structures and hirarchies to promote a cooperation between the IT and sales department! In many airlines, IT is higher valued than sales, so IT projects are pushed forward without sales justification. Say what?!

2. The new value of the airline sales manager
Why is it that companies like Easyjet or Southwest Airlines operate a network of sales managers and lately increase their sales forces? Might it be possible that “traditional sales” has an impact to their revenue…? Isn’t it enough to focus on Google Adwords? And why the heck are these airlines having a sales force continue to have the higher service classes (First, Business) and fill them? Could it probably be that the sales managers can sell these “high end products”, where e-Commerce competes mostly on the price level? Exclusively on the price level?

As I emphasized in the past years: Everybody can “sell” cheap. You do not need a sales manager for that. But to sell out of season and to be able to sell at higher rates, it is reasonable to look at all distribution tools and channels: IT/e-Commerce, Yield Management, Sales and Marketing. And run them in a concerted way to assure best outcome. And hey: This is called “Sales”… Say what?! 😀

Food for thought! What do you think about this?

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Social Networking

As Blogs are a part of “social networking” and as I follow several blogs like the German Tourismuszukunft, I thought to share some thoughts. As usual, I do appreciate your feedback. This blog is meant to trigger thoughts and make you ask me. My statements are thoughtful, but not necessarily the only truth. Often enough, I do learn better from the exchange with you.

In November, I finally signed up for Facebook and Plaxo, finding old and new friends active in these networks. As of my “troubled history” with Xing and as a majority of my friends are international, I moved my private activities to Facebook and focus professionally on LinkedIn. Oh yes, and my reviews I add to Qype, though I did not have much time for that either lately. I publish once a week in this blog, try to think a bit about the philosophical blog on Sapphilosophy, try to answer on LinkedIn and communicate with my friends and update them on Facebook. Now I want to install WordPress on my website to move my blogs away from Big Brother Google, and my website needs some updating too… Information Overkill…

In an interview, I was just questioned that I do so much “business related activities”. But don’t we all have our hobbies? Business Development, Aviation and Hospitality are my business. And my hobby. My life. But we need to find the time first we can then invest into business and hobbies alike. On- or offline. And in honesty: I appreciate being a lot easier in touch with you than 20 years ago. And I appreciate a phone call (Skype?) and e-Mail. But isn’t a personal meeting definitely more valuable than any electronic exchange. Isn’t that, why we all appreciate opportunities like ITB to meet face to face with many in a short time? Isn’t that the same true for Sales? Yes, once a contact is established, e-communication is okay. But it does not forever substitute for personal meetings.

Food For Thought! (Share your thoughts with me)

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Paranoid: Big Brother’s Watching Me

The Association of Corporate Travel Executives (ACTE) is requesting that the use of a controversial identification document reading device, being deployed at U.S. borders, be temporarily halted until thorough testing can determine if it is a potential source of traveler identity theft. According to published reports, the new device can remotely read highly personal data as an individual approaches U.S. border crossings. If traveling in a car, the device can read data on every individual in the vehicle, using Radio Frequency Identification (RFID) chips embedded in passports, passcards, and drivers licenses.

ACTE is concerned that unauthorized individuals could either resort to electronic eavesdropping at the border, or use similar devices that could extract data from RFID chips at other locations,” said the association’s Executive Director Susan Gurley.

Some of you remember my ASRA-presentation 2007, where Christoph joked about me being paranoid? Yes, I am! Not paralyzed, but careful. My life is largely “online”, I use Social Networks, have my own websites and blogs. But yes, I do consider who gets access to what and I do distrust companies like Microsoft, Google, Yahoo & Co. I have to use them. Some of their stuff is simply great (Google Earth + Maps), but these corporations have stronger power today than a president of the United States. Do I use Facebook or does Facebook use me?

Food For Thought!

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Lately major discussions in Germany and online are the various public “rating” sites. Using Qype myself and HolidayCheck for the hotel ratings and reviews, I am a mature online user, able to read as well between lines as when I read the catalogue of a tour operator…

From many of my replies here the extract: It’s hyped. So to get the right perspective, sit back and think about it for some minutes. As you hopefully know Shift Happens, we are facing an information flooding. Where in the “good old days” it was necessary to know the restaurant and hotel critics, the authors of the major travel guides, it is now necessary to also know the major online portals. But it is not necessary to search and review all and any blog entries somewhere. That is “lost in the noise”, just as it was without Internet, where the noise existed (called “word-to-mouth-propaganda”).

Where in the good old days, the books and critics published in print had the main impact to day-to-day operations, the Internet offers another advantage. If you had a bad reputation in the past, it took you at least a year to get an update (new management, renovation, …) into the next edition. In the Internet, this can be promoted much faster.
But as fast, a bad rating can be outsmarted by good customers. If you have a problem with service, it is not the rating that sucks, but you better improve the service quality and proactively market it. Like the good old “We listen to our customers”…

Everything becomes public (and published) these days. But the users resort back to “trusted brands”, of which some (like HolidayCheck) are new, but don’t ignore the value of printed travel guides. It’s a shift from “search available information” to “select”. Where information was rare, it is now flooding us: “Select” means to be able to qualify the valuable information from the noise. And for the rated company to learn, what information has impact on the customers – and which are “just another one” with minor impact.

Do not ignore them. But don’t let the makers of these sites qualify their importance for you. The only ones who can are your customers and you. So if approached by another of these important experts telling you what you have to do: Don’t let them unsettle you. Sit back, think about it. But keep in mind: These tools do have their value and after a hype peak and a disillusionary phase, they’ll be here to stay…

[Update: I did not move from Qype to Yelp, there’s many other such “tools” meanwhile and I was unhappy with the user management of Yelp]

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