Lean Office

Free Turnaround Advice to All Struggling Airlines

By Jon Miller Published on October 11th, 2006

It started out as a routine one hour flight delay and missed connection. Snowstorms in the winter, thunderstorms in the summer. When you are traveling by air through the Midwest, plans that don’t go according to plan are almost a given. We arrive in Minneapolis and the passengers shuffle off of the airplane, collecting their hotel and meal vouchers. Most of us have missed our flights and proceed to collect our bags.
There’s a crowd at the baggage carousel. I wait for half an hour, watching it stop and go, stop and go. Giant LCD screens advertise a local casino. Few bags appear, people disappear. After an hour the people dwindle, and the carousel stops. No bag. I join the line of people inquiring as to the whereabouts of their luggage. I overhear the airlines agent say that the remaining bags are here in Minneapolis but somewhere within the baggage handling system. It is time for maintenance of the system, so they can not be retrieved. Our bags are somewhere in the system, unavailable until tomorrow.
At 11PM this strikes me as possibly the stupidest thing I have ever heard. This sort of rigid adherence to a maintenance schedule at the expense of customers betrays common sense. Go get the bags. By the same logic they should maintain aircraft in mid-air if the aircraft reaches the point in its lifecycle while in flight. Hotels should clean rooms at 9AM sharp regardless of whether and how rooms are occupied. The Minneapolis airport baggage handling process needs kaizen.
I’m curious exactly where my bag is in the “system”. The agent tells me with great cheer that my bag is actually in the back room on a cart. It’s ready to be loaded onto the first Seattle flight in the morning. The airline has done me a service in their mind. My bag was taken care of. I don’t even have to pull my suitcase around tonight. They could have sent a barker telling people with bags going to Seattle the situation. They could have posted a sign.
She hands me a bag of toiletries. It’s lucky there was nothing in the suitcase I really need, such as medication, as the “system” has no sympathy for such things.
I find my way to the ground transportation center, pick up the courtesy phone and summon the hotel shuttle. It arrives after 10 minutes. The driver gets out, but does not open the door to the shuttle or let me in. He stands there with his radio in his hand. It squawks. He listens. It is a cold night in Minneapolis. I motion toward the door, he looks at me, and pushes it open. I go in and sit down. He tells me the Comfort Inn is not accepting any more vouchers tonight. He can’t take me. It was kind of him to drive all the way to the airport to tell me this. Another broken process.
I need another voucher, for a hotel that will take me. It’s midnight. The terminal is empty. I look down from the escalators and see a figure in a red cardigan moving slowly down the length of the hall toward an exit. I catch up with her and explain that I need help. She is surly. I can’t blame her. It’s the end of her shift. As a customer I’m the only thing that stands in her way of making an exit and going home. She finds a supervisor from behind the ticket counter and disappears out the door.
With a new voucher in hand, I return to the ground transportation area. I pick up the phone and call the hotel. A recorded female voice welcomes me to the Days Inn. They look forward to serving me. Instructions follow. I follow the instructions. The message cuts out, the phone rings at the other end. Once. The recorded female voice starts again. This is exactly how I would design a phone system if my was aim to videotape the reaction people had to it and sell the footage for entertainment. I push the zero button. It rings once. And repeats the message. I am surprised when after 12 more pushes of the zero button, each time being welcomed by the female voice, a live voice answers. A shuttle is on its way.
At the hotel over 80 people have checked in tonight diverted in their travels as I have been. This places a strain on their capacity to shuttle people to the airport in the morning. The man at the desk asks me if I prefer the shuttle departing at 4AM, three hours before my flight, or at 6AM, giving me an hour. Since my luck has been improving steadily in the last few minutes, I choose the latter.
Tonight’s travel experience process was badly broken. Nobody from the airlines was overseeing the entire value stream of getting customers from the arriving airplane to retrieving luggage to the hotel and back to the airport the next day. What exists is a series of disconnected, non-visual steps with no feedback loop other than the unhappy customer fixing their own problem. These travel experiences are not rare occurrences, but there is no evidence that airline or airport management is learning from them.
Some of the key behaviors of truly great organizations that operate under the kaizen philosophy are making abnormalities visible, taking immediate action to solve problems in a standardized way, and managing through teaching everyone in the organization how to serve the customer and solve problems. In this travel experience the airlines / airport / hotel extended value stream demonstrated a lack of all three.
There is a formula that explains part of Toyota’s thinking process and what makes them a great company. It is Profit = Price – Cost. This is in contrast to the traditional Price = Cost + Profit. The customer sets the price based on the value they see in the product or service. The provider of the product or service can make a profit only but cutting cost. The struggling legacy airlines are operating on the second equation. The successful low cost airlines recognize that the price is set by what the customer is willing to pay, and they reduce costs relentlessly to turn a profit.
But there is a third aspect that is often neglected. That is the definition of value by the customer. The price is determined by the customer in proportion to the value. If you increase the value as perceived by the customer, you can increase the price. If you can increase the price and keep costs fixed, you can increase profit. This does not require innovation, just the execution of good service.
As a business traveler, or even a vacationer, how much more would you pay for traveling with an airline that delivered a bullet-proof process for handling the cancellation of flights and adverse changes to your plans? What if they rented a van and took you directly to the hotel? What if they brought your bags to you? If we are only paying to be moved from point A to point B when we travel by air then the two profit equations above work. If we are expecting a service then airlines could set prices in a different way.
Free turnaround advice to all struggling airlines: do kaizen in all processes to reduce cost and improve quality and at the same time understand what aspects of the service customers value and will pay a higher price for. Offer these services.
The bag of toiletries contained a XL size Fruit of the Loom undershirt, and the worst tasting toothpaste I have ever put in my mouth. I’ll be home in 10 hours, barring a freak blizzard in Minneapolis or the hotel shuttle blowing a tire on the way to the airport.

  1. Kevin

    October 12, 2006 - 7:46 pm

    I hear you. I was delayed at LAX a few weeks ago and put up in a local hotel. The bus to the hotel also had several flight crews from the same airline… and they were let off first at the Crowne Plaza. I was then taken to a much lower level hotel, where I literally had to walk past a couple ladies of the evening to get to the front desk.
    Try Lufthansa sometime. This past summer while traveling in Europe I flew that airline almost exclusively after hearing a lot of good things. All deserved. In the extreme rare instance that a flight was a minute or two late, a team of agents met the plane and escorted each customer to their next flight… thereby providing a great service while also ensuring that next flight left on time. Those Germans understand clockwork. I may be involved in a lemon lawsuit over one of their cars, but their airline works great… and I’ll tell other people about it.

  2. Jon Miller

    October 12, 2006 - 9:50 pm

    Thanks for the tip about Lufthansa Kevin. I’ve flown mostly KLM in Europe with no trouble, luckily. Who is the comparable premium U.S. airline? Is there one?

  3. Barry

    October 13, 2006 - 7:25 pm

    It has been my experience that it is not just the Airlines (Although they are some of the worst offenders) who offer poor customer service in the US. I have come to expect less than stellar service in America. I actually have built it into my expectations now and don’t even get upset anymore.
    Many of our industries such as construction, computers, software, auto, and a lot of retail just don’t do a very good job with customer service. It’s almost a second thought with many companies. Think about how many Telephone computer mazes you have to go through these days to just get through to someone who might be willing to help.
    So whose fault is it? Well, I have decided that it really isn’t the front line person’s fault. It seems to me the fault for a low level of service or a poorly developed system lies most directly with Management.
    I think that the Management of many of the US Industries simply do not have the level of System Thinking sophistication as someone like Toyota. The companies that do things well and take care of their customers, especially during unusual hardship understand the long term value of providing exceptional service.
    The problem is that without a company that does things right (like Toyota) competing in an industry, then there really isn’t any alternative. Without someone to act as a leader and do things well in an industry, then progress may not come about. Then customers are stuck with the level of service that is delivered by whatever group of companies is competing in that industry.
    I read a Bain article recently that basically said that the only thing that mattered was whether the customer had a favorable enough impression to purchase again.
    We need a Management awakening in many of our Companies on the order of what was experienced at Toyota in the 1940’s and 50’s.

  4. Dblwyo

    October 24, 2006 - 9:18 am

    Sympathize with your observations. Having worked around the transportation (passenger included) industries for a while we could discuss what it takes to create an end-to-end experience for passengers. But instead let’s focus on your question – what would you pay for a value-driven total experience? Granted the airlines per se and the industry as a whole are very non-responsive. At the same time they need to institutionalize processes to provide an affordable experience and over time such processes become sclerotic. Given all that the basic strategic finding is that people in fact choose lowest prices over any other criteria when flying – the experiments with more room, etc. being proof points. It would be enormously expensive to provide the kind of adaptive service you seek. Would you be willing to spend, say $1-2K for a trip where your ticket likely cost $200-400? One wonders if their isn’t a business model here focused on high-service end-to-end travel where part of the business model is insurance like – that is one pays, say $750 for a $500 ticket on every trip with the expectation on both sides that you’ll be taken care of. In the Hotel industry compare and contrast the Ritz-Carlton to the Courtyard and $135/night vs $300/night.

  5. Jon Miller

    November 25, 2006 - 1:56 pm

    I would probably not be willing to pay $1,000 for a $200 ticket, but in fact this is what we do as business travelers when we opt for a Y class coach ticket (changeable, refundable) rather than the lowest cost (non-changeable, non-refundable) when traveling through O’Hare in blizzard season on the way to an important business meeting. We are paying for the convenience of being able to take the ticket from our canceled flight to another airlines and get a seat.
    I think the real solution to the “stranded in Minneapolis” situation is something similar to what Southwest does by having all of their crew, captain included, help with cleaning the airplane after the passengers depart. In Lean terms it is multi-process handling and cross-training. It gets the job done quicker at a lower cost.
    If everyone from the airlines helped get the stranded passengers rebooked, to their hotels, etc. rather than leaving this to a few stressed out “specialist” agents (and having the crew take the first shuttle to a nice hotel ahead of all passengers, as in Kevin’s example) then we could have more adaptive service. Do this a few times and the crew might come up with improvements to the process as they would experience the frustration of their passengers on the gemba, trying to summon the shuttle, etc.
    Air travel is a vital part of our global economy as well as national infrastructure. Let’s keep complaining constructively.

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