Moments of Truth
Jan Carlzon, who took the reins of the ailing Scandinavian Airlines System (SAS) in 1981, turned it around dramatically by bringing a change in employee attitudes. He ignited a radical change in the culture of SAS by stating that they would turn in profit for the company by becoming a service oriented airline. He redefined customer service much before the advent of customer relationship management principles and practices as we know today. In fact, he revolutionized the airline industry through an unrelenting focus on customer service quality.
He wrote one of the best books on leadership by a CEO titled, Moments of Truth: New Strategies for Today’s Customer-Driven Economy in 1987 describing his turnaround strategies at SAS. This book is a must-read for leaders at every level of an organization. The American Management Association, in their 75th anniversary issue of their magazine called this one of the most important developments in management of the 20th Century. Here is what he communicated and demonstrated across his company:
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. Carlzon called it the ‘Moment of Truth.’ He believed and practiced that:
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.
Carlzon was clear from the time he took charge 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 (as they are referred to as ‘front line’ at SAS).
In 1981 immediately after he became the CEO, Carlzon thoroughly analyzed the situation and said that during the previous year SAS had 10 million customers and each one of them came into contact with five SAS employees, and each contact lasted 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.
Furthermore, he convinced all his employees that, “ 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, 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.
Every business has its own Moments of Truth. What are the Moments of Truth in your business or industry? How are you going to orient your team towards exemplary and exceptional quality of customer service in fulfilling the individual needs of your customers? How are you going to flatten the pyramid and empower your frontline employees to take responsibility? How are you going to seize those golden seconds of your Moments of Truth and prove that you are their best alternative?