Four years ago, I was at work sitting through lunch meeting around the health of our office. At the time what we were producing was great, and moral was high…but profitability was sort of lagging. My coworker deadpanned, “I supposed you can’t be considered successful until you’re considered profitable.” I sort of chuckled at the time, because I figured it was his way of basically stating that we were screwing up. I mean, isn’t the only way a business can be successful is if it’s profitable?
That moment has stuck with me over the years, and probably has done a decent amount to deprogram my b-school education. I was surprised at the automatic leap I had made to equate profit and success. I know that successful businesses are usually sustainable and profitable, but I had let something else define what success means. And when someone else defined success they implicitly defined what we would measure to be successful.
Its pretty fascinating that people are really good at optimizing what the measure. The act of tracking anything socially elevates its importance. And if we think something is important, we make sure we tend to it. On the job accidents, profitability, CO2 emissions, return on investment, net promoter…you name it, we can track it. Things get sticky though when the ideals we measure conflict with each other. Is profitability more important than customer satisfaction? Is avg. purchase price more important than how many people I tell about what I purchased?
I’ve been noticing lately how the airlines measurements get them in trouble time and time again. There’s the standard bullshit we all sort of laugh about when they push back from the gate for an ‘on-time departure’ only to sit on the runway for an hour. Last week, I noticed a new one. Since some airlines charge for every bag checked, the overhead storage space on the plane has become even more of a premium. As passengers filed on the plane, a flight attendant told a man he would have to gate check his bag. He smugly replied, “I guess no one else wanted to pay that $25 bag surcharge either.” We had so many bags to gate check that the plane left late. So in this case, the airline didn’t make any extra money (they don’t charge for gate check), the flight left late, and everyone was miserable. Way to go, Delta.
Dave Carroll of the band Sons of Maxwell have been getting a lot of attention because of one of their airline horror stories. Apparently United broke some of their music equipment in 2006. After no one at United helped them repair the damage, they wrote a song about it and posted it on You Tube. So what would might have been a $2k repair bill for United turned into a decent sized fiasco, 2.4M people have watched that video in 6 days. (That’s the population of Houston.) Good news for the Sons of Maxwell, bad news for United.
I guess it’s no surprise that the airlines who are thriving in today’s environment (southwest, virgin, jet blue), are the ones who have figured out that the customer experience (and how they measure it) are arguably one of the most important pieces of their strategy.
If you think about it, how you measure success is probably more important than how you define success. If you goal is to go east, and you measurements reward your for going west, where do you think you’ll end up?