Moment of Truth

Topics: Management, Decision making, Leadership Pages: 16 (4462 words) Published: January 16, 2011
A Book Report
New Strategies for Today’s Customer Driven Economy

By Jan Carlzon
President, Scandinavian Airlines


The first 15-second encounter between a passenger and the frontline people, from ticket agent to flight attendant, sets the tone of the entire company in the mind of the customer. This is what Carlzon calls the “moment of truth.”

“Everyone needs to know and feel that he is needed.” “Everyone wants to be treated as an individual.” “Giving someone the freedom to take responsibility releases resources that would otherwise remain concealed.”

“An individual without information cannot take responsibility, and individual who is given information cannot help but take responsibility.”

Jan Carlzon

A Moment of Truth:

We have reoriented ourselves to become a customer-driven company – a company that recognizes that its only true assets are satisfied customers, all of whom expect to be treated as individuals and who won’t select us as their airline unless we do just that.

SAS is not a collection of material assets but the quality of the contact between an individual customer and the SAS employees who serve the customer directly (or, as we refer to them, our “front line”).

Last year, each of our 10 million customers came in contact with approximately five SAS employees, and this contact lasted an average of 15 seconds each time. Thus, SAS is “created” 50 million times a year, 15 seconds at a time. These 50 million “moments of truth” are the moments that ultimately determine whether SAS will succeed or fail as a company. They are the moments when we must prove to our customers that SAS is their best alternative.

Tomlinson & Associates ◆ “Organizational Excellence – A Culture of Discipline” ◆
If we are truly dedicated to orienting our company toward each customer’s individual needs, then we cannot rely on rule books and instructions from distant corporate offices. We have to place responsibility for ideas, decisions, and actions with the people who are SAS during those 15 seconds: ticket agents, flight attendants, baggage handlers, and all the other frontline employees. If they have to go up the organizational chain of command for a decision on an individual problem, then those 15 golden seconds will elapse without a response, and we will have lost an opportunity to earn a loyal customer.

In today’s world, the point of departure must be the customer – not the production tools or technology itself – and this means that companies must organize themselves differently to survive.

In a customer-driven company, the distribution of roles is radically different. The organization is decentralized, with responsibility delegated to those who until now have comprised the order-obeying bottom level of the pyramid. The traditional, hierarchical corporate structure, in other words, is beginning to give way to a flattened, more horizontal structure. This is particularly true in service businesses that begin not with the product but with the customer.

In order to become a customer-oriented company, extensive changes will be required on the part of frontline employees. Yet, the initiative for those changes must originate in the executive suite. It is up to the top executive to become a true leader, devoted to creating an environment in which employees can accept and execute their responsibilities with confidence and finesse. He must communicate with his employees, imparting the company’s vision and listening to what they need to make that vision a reality. To succeed he can no longer be an isolated and autocratic decision-maker. Instead, he must be a visionary, a strategist, an informer, a teacher, and an inspirer.

To middle managers he must delegate responsibility for analyzing problems, managing resources and most importantly, supporting the needs of the frontline employees.

To frontline employees the leader must pass along the...
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