BOLD: HOW TO BE BOLD IN BUSINESS AND WIN – The Story of “Virgin Galactic”

The future belongs to the Bold.  The world is so crowded that only those who have a significant and dramatically different story to tell will grab the attention of customers.

In a world and age when we have come to expect good level of service and product as given, only an exceptional and memorable experience will earn customer loyalty.

Different breed of organizations are now emerging, they succeed because they have courage, confidence or just sheer chutzpah to pursue a purpose beyond profit:  to engage, entertain and educate their audiences, who see their customers and employees as members of a like minded community, who create and administer cult-like following among their brand – both within and outside their organizations – who are not just different, but dramatically different and who push to the extreme the consequences of their dreaded positioning and strategy.  Virgin Galactic is one of the bold brands.

Virgin Galactic

Virgin has long been thought of as the ultimate “challenger brand”.  It’s business model has been to take on large, established companies in a sector and seek to rewrite the rules, usually in favour of customers.  Being Bold, brave and innovative are in the DNA of the brand and it’s Visionary founder, Sir Richard Branson.

The Brand believes in making a difference.  Virgin stands for money, quality, innovation, fun and a sense of competitive challenge.  At virgin, they always look for the next big things, that may become a major global business.  This approach has led Virgin to create more than 200 branded companies world-wide, employing about 50,000 people in over 29 countries.  Their business spans music, media, mobile phones, travel, financial services, entertainment, leisure, and many others -the latest being Virgin Galactic – the successful flights of Virgin Galactic Vss Eve, the launch vehicle along with VSS Enterprise, the passenger vehicle – represents the opportunity of ordinary people traveling into space, making pace a new frontier for business.

Bold Practices

-       Virgin Galactic aims to fly 600 people in the first year of operation, that is more people than have been in space in 50 years.

-       The Mother ship USS Eve, is the largest 100% carbon composite plane currently in service and is the most environmental friendly aircraft in the world.

-       The passenger vehicle VSS Eve, completely redesigned based on customer feedback about their expectation of space travel.

-       The cost of a passenger flight is $200,000 compared with the Soviet-era passenger seat of $20-30 million.

-       Over 300 customers have registered and the company has over $40 million in deposit, though the first commercial passenger flight is yet to take-off.  Such is the power of Virgin brand.

-       The aircraft will operate initially from the purpose-built Space Port America in New Mexico but can operate from any commercial airport in the world.

-       The name Virgin Galactic was registered before the first flight was ever made.  

        So, let’s be bold.

Culled from:  BOLD:  How to be bold in Business and Win, by Shawn Smith and Andy Milligan

BOLD: HOW TO BE BOLD IN BUSINESS AND WIN – The Story of “UMPQUA BANK”

The future belongs to the Bold.  The world is so crowded that only those who have a significant and dramatically different story to tell will grab the attention of customers.

In a world and age when we have come to expect good level of service and product as given, only an exceptional and memorable experience will earn customer loyalty.

Different breed of organizations are now emerging, they succeed because they have courage, confidence or just sheer chutzpah to pursue a purpose beyond profit:  to engage, entertain and educate their audiences, who see their customers and employees as members of a like minded community, who create and administer cult-like following among their brand – both within and outside their organizations – who are not just different, but dramatically different and who push to the extreme the consequences of their dreaded positioning and strategy.  Umpqua Bank is one of the bold brands.

UMPQUA BANK

The self styled greatest bank in the world, passionately believes, it thinks banking should be like a great retail experience and even calls its branches stores to highlight the belief.

South Umpqua State Bank started in 1963 as a small community bank in South Oregon.  Ray Daus took over as President in 1994 when the bank had assets of $140m and employed 60 people.  Under his leadership, the bank grew to more than 180 branches (stores), 2,500 people and over $12b in assets.

Media outlets like Business Week, New York Times, have repeatedly nominated Umpqua as one of the coolest places to work.  Fortune Magazine has included Umpqua on its best companies to work for list, including November 13 in 2008.

Umpqua has positioned itself very successfully as an integral part of the community and more than just a bank.    It encourages its people to work in community and create store formals that provides a place where customers can come and spend time, not just bank.

It has taken it store promise out on to the street through its innovative “handshake marketing”, which promises “something wonderful will happen to you today”.  Its culture infectious and new employees and acquired businesses have been described as Umpqaulized.

The name Umpqua means “raging water” in Native American dialect, an apt description of the turbulence that hit the financial sector in 2008/2009.  But Umpqua culture helped it grow through the difficult years.

Bold Practices

-       Strip all back room operations from stores so that only things people did was to focus 100% on customer experience

-       New hires were recruited from retail companies and they were trained in the complexes of banking and sent to train at places like Riz Carton (a Five Star Hotel) to learn about delivering services that knocks you off your feet.

-       Empowering people – we hire decision makers and empower them to make decisions that will impact our customers as front desk officers.

-       We are part of our community, our over 2,500 employees engage in a volunteer 40 hours a year of their time to non-profit endeavours with focus on youth/education.

-       Measuring the experience – if you are going to centre our organization on customer experience, you have to be able to measure the experience. It’s called return on quality.  Our people are measured as a team and as individual – great incentives for those who do well and recoach/mentoring to upgrade others to maximize service level.

-       With advancement in technology, most people rarely come to banks now a days, as lots of banking could be done on phone or online, but at Umpqua, we try to create a wonderful experience, so that our customer can say “I think I go to Umpqua Bank and have a coffee while I do some shopping online, while am there, I might cash a cheque or make a deposit” – a significant difference created by our core experience.

-       Our bank (store) design format is very unique, we borrow great idea from best retailer and adapt them to our banking environment.

-       Creating a seamless multi-channel experience – ensure the same culture, the same feeling that the customer get from walking into our store or branch is also felt on the web, in all call centres and it must be delivered through all our channels.

-     The Umpqua brand promise – to make your stop at an Umpqua bank the best thing you did all day.

-       Handshake marketing – an example of this is demonstrated in “random acts of kindness” when a Manager of a store down the street may ask the manager of a fast food restaurant to select two tables daily and ask the manager to pay for their meals, that it’s on Umpqua bank.  Such random kindness spread like wild fire – goodwill to the bank.

-       Get in the flow of social media – The biggest thing about social media site like twitter is that the conversation is going on about your company regardless of whether you participate or not, so we decided to participate.  You must participate to resolve issues and ensure positive tweets about us always.

-       As a company, your visions moves from being a project to how we live, breathe and everyone follow suit – culture and brand are the same you cannot have one without the other.

-       Every single employee attends a motivational moment session every day to inspire us on the job.

-       The branches are called stores and the bank advertises for new hires in the retail space (press).

-       Employees are trained in customer service by customer centric organizations like (Five Star Hotel) Riz Calton Hotels.

-       Employees can spend as long time as it takes to satisfy a customer.

-       Any employee can call the president on any issue.

-       Every employee has to answer the phone with “welcome to the world’s greatest bank”.  People who don’t want to do it can’t join the bank.

-       They mystery shop at branches of other banks, they are thinking of acquiring, to check the culture and customer facing operations.  The Bank has successfully acquired or umpquatized 23 other banks since 1994.

Bold Lessons

-       Look outside your industry – Look beyond your industry to study comparators rather than competitors.  They saw what the best retailers were doing and they applied it to financial services

-       Be the Brand – Walk your talk – Create a branded customer experience.  There is only one Umpque, the look and feel of the store, the technology used they way the employee deal with you.  All of these combined together to create a distinctive customer experience that shouts “Umpqua”.

-       Embracing the digital Media – Understanding the power of the internet/social media and using these as a seamless commercial tool with customers.  Mentoring/ responding to tweets, creating business communities and integrating mobile tech are all important aspects – but first and foremost in the service of the store.

Bold HR Policies

-       Umpqua is a brand the understands the importance of the employee experience and works hard to create a culture that supports the service strategy.  Empowering employees to do whatever it take to satisfy customers, encouraging “random acts of kindness”, and daily “motivational moments”, are all examples of a fundamental belief in the power of the people to differentiate a brand.

-       From running advert in the retail space, rather than financial press, to sending new hires for training to Ritz Carton are examples of bold HR practices mirroring the strategy.

-       Umpqua created a change culture – almost cult like – because if recognized that the only way to differentiate in a relatively commoditized area like banking was through the experience its people could deliver.

        So, let’s be bold.

Culled from:  BOLD:  How to be bold in Business and Win, by Shawn Smith and Andy Milligan

BOLD: HOW TO BE BOLD IN BUSINESS AND WIN – The Story of “AIR ASIA X”

The future belongs to the Bold.  The world is so crowded that only those who have a significant and dramatically different story to tell will grab the attention of customers.

In a world and age when we have come to expect good level of service and product as given, only an exceptional and memorable experience will earn customer loyalty.

Different breed of organizations are now emerging, they succeed because they have courage, confidence or just sheer chutzpah to pursue a purpose beyond profit:  to engage, entertain and educate their audiences, who see their customers and employees as members of a like minded community, who create and administer cult-like following among their brand – both within and outside their organizations – who are not just different, but dramatically different and who push to the extreme the consequences of their dreaded positioning and strategy.  AIR ASIA X is one of the bold brands.

AIR ASIA X

Tony Farnandes, CEO of Air Asia, mortgaged his house and together with some investor, bought Air Asia, a moribund airline, carrying a $12.5m debt in 2001.  In 2009, the airline earned a net profit of over $161m.

Air Asia quickly established itself a one of Asia’s leading airlines.  With its promise of “Now everyone can fly” it has extended operation to 20 countries around Asia.  It’s bold vision lead to the carrier ordering 20 new aircrafts from Airbus in midst of recession.  It has won numerous awards, most recently being voted the best low-cost carrier in the world in both 2009 and 2010.

Bold Practices

-       We took the low cost airline model and applied it to long-haul operations and doing this when everyone in the aviation industry said it can’t be done.

-       We also believe that if we give people much lower fare, more people will travel.

-       We also believe that there is a way of operating at a dramatically lower cost than other airlines because they tend to be homogeneous in their business model:  everybody does things in a certain way.  With our smaller planes we got the world lowest unit cost per available seat kilometer.  We were doing 2.8 us cent per available kilometer seat in contrast to Singapore airlines 6 cent, Cathy Pacific 7 cent, BA 8 cent, etc.  So at an operating cost of 2.8 cent, we are talking of a 20 or 30% reduction where the big boys can’t discount and squeeze us out of market, we are looking at more larger reduction in operating cost.

-       Another breakthrough insight is that the entire long haul (distance) aviation industry has been focused on what I call the “Time-sensitive, price-sensitive customer”, whereas Air Asia built its model around the price-sensitive, time-sensitive customer – a segment previously untapped.

-       Aviation industry had its origin serving the premium end of the market – the upper end of market, flying 30 years ago was a whole glamorous experience, because that is where airlines make bulk of their money.  That means you fly when the business class passenger prefers to travel, e.g. Cathay Pacific on average report their aircraft utilization rate is 12 hours a day.  So in a year, the aircraft is in air half the time the other half, they are sitting on the ground.

-       Air Asia X fly 18 hours a day, that is a big difference.  How do we achieve this difference?  For the past 50 years, airlines have been thinking about the premium customer.  The premium customer wants 2 things (1) They fussy about the time they depart (2) the time they arrive.  So that’s why you see long haul flights leaving Asian Airports close to midnight and arriving London or Sydney in the morning.  So the plane just sits there and wait until they are needed again clocking huge parking charge in the meantime.

        A premium passenger does not like to wake up at 3 am in the morning to catch at 7.30 am flight to Singapore, so the plane waits for a more convenient time for the passengers to fly back.  This means a lot more down time than necessary.  So at a lower cost, we were able to attract customer that was not time sensitive.

-       Seamless continuity with feeder connections in between countries is very important.

-       Air Asia X has diverse people with various experiences, most of which were not in airline business, the number one reason is probably to always ask why and why not – challenge the status quo always.

-       At Air Asia, their values and KPIs were very simple and everyone knew what it was all about

        1.      To get to $1billion dollar mark in 5 years

        2.     Get their cost structure to 2 cent per available seat

kilometer – cost focused

        3.     Three of every four seats in the plane must be filled and three out of every four air worthy aircrafts are always in the air.

-       Using Social media to sell an experience:  A key difference from other airlines is our extensive use of digital channels and social media.  Air Asia has about 75% share of sales coming through the internet, which is higher than most airlines.  Air Asia X has 89%.

-     We are also selling experiences, long haul travel to exciting destinations.  When we sell flights to Australia, we tell them “You got three of Conde Vat’s top 10 Islands on your door step: Bale, Langkavi, Phukat.  You got exciting cities:  Bangkok, Singapore, Kuala Lumpur, Hong Kong.  So with Air Asia cheap fare, you can shop in Kli, go phuket for beach holiday, visit Angkhor Wat for sightseeing.

        It is this multi dimensional variety that I really changing the way people travel and you begin to get a community built around your brand.

-       Building customer communities partnering with sports – sponsoring Manchester United in 2005, Oakland Raiders Football team, etc, when you make these brands parts of your global network, people start to associate that lifestyle with your brand.

-       Partnering with youth and university students with music and entertainment world, like sponsoring people to 02 Arena in UK to watch Rolling Stone perform or flying to London to watch Arsenal, it’s about lifestyle, an aspirational lifestyle.

-       Leveraging the brand – Air Asia X set themselves the objective of earning about 50% of our revenues from non-airline related sources.  This requires very big and bold ideas, i.e. Air Asia Courier Services, etc.

-       Connecting people to a purpose.  Air Asia has a slogan “Now everyone can fly”.  The Air Asia X version is “Now everyone can fly extra long”.  People join us not because we are the greatest players in the industry, but because of the challenge of building something new that allows people to travel faraway places and make the world a smaller place.  Because of cheaper fares people can now reach each other often connecting families.

-       At Air Asia, multitasking is a way of life.  Everybody does everything themselves.  

-       Low cost doesn’t mean poor services or low employee morale.  Our business model will only work if we pull together as a team.

-       A culture of openness – Anyone can approach anyone else.  It only works when we all work, everyone is involved.

-       Lean, not mean – highest cost is in relation to engineering – others are allowances to crew, pilots, etc.  Others are fuel.  So we reward and recognize outstanding performance.

Bold Practices

-       Air Asia was first Airline in the world to eliminate fuel subcharges.

-       In 2009, it offered a million free one way tickets with 400,000 snapped up with 24 hours.  Air Asia ordered 200 new aircrafts in depth of recession.

-       Air Asia is one of the Top ranking face-book accounts in transportation field.

-       Air Asia Red Txx.com is the portal where customers can book music and entertainment and download music need and news.

Air Asia Vision

-        To be the largest low cost airline in Asia and serving the 3 billion.  People who are currently under served with poor connectivity and high fares.

Mission

-        To be the best company to work for, in which employees are treated as part of the big family.

-        To create a globally recognized Asean brand.

-        To attain the lowest cost so that everyone can fly with Air Asia.

-        To maintain the highest quality product, embracing technology to reduce cost and enhance service levels.

-        Air Asia X launched the first SMS booking service in the airline industry.

-        Air Asia X launched the flat bed premium seats that are available in all its long haul flight.

-        Air Asia has adopted more of the style of Virgin than it has its Asian competitors.  No surprise the CEO used to work in Branson’s music business and Virgin owns 16% of Asia Carrier.

          So, let’s be bold.

Culled from:  BOLD:  How to be bold in Business and Win, by Shawn Smith and Andy Milligan

BOLD: HOW TO BE BOLD IN BUSINESS AND WIN – The Story of BT CELLNET (“02”)

The future belongs to the Bold.  The world is so crowded that only those who have a significant and dramatically different story to tell will grab the attention of customers.

In a world and age when we have come to expect good level of service and product as given, only an exceptional and memorable experience will earn customer loyalty.

Different breed of organizations are now emerging, they succeed because they have courage, confidence or just sheer chutzpah to pursue a purpose beyond profit:  to engage, entertain and educate their audiences, who see their customers and employees as members of a like minded community, who create and administer cult-like following among their brand – both within and outside their organizations – who are not just different, but dramatically different and who push to the extreme the consequences of their dreaded positioning and strategy.  02 is one of the bold brands.

02

02 started life as BT Cellnet, the mobile business of British Telecommunication.  As part of deregulation in the Industry, BT Cellnet was spun off as a separate entity in 2002 and rebranded as MMO2.  The very name was designed to bring a breath of “fresh air” to the industry.  However, the Financial Times was less convinced and said the name was daft and the brand practically worthless.  Four years later, the worthless brand was sold to Telefonica for a mere $17.7billion.  By 2008 02 had overtaken it’s giant parent (British Telcom) to become the largest provider of Telecom connections in the UK and the fourth best-loved brand in Great Britain.

What did 02 to turn around an ailing business and become a power house in UK economy:

  -     It was a classic approach of starting with customer insight.

-       Having a point of difference

-       Aligning your people with it

-       Tearing the industry Rule book

-       Seeking to dramatize your difference thru bold innovations  

-       02 values was bold, open trusted and clear

Today, 02 is market leader in UK, being number one in terms of total revenue, earnings, new customers, customer base, having achieved more connections than all competitors combined and customer satisfaction.

Bold Practices

-       The difference between 02 and other companies in their space, was that they were a brand first and foremost, rather than a company that happen to have a brand.

-       Lots of committed people, genuinely committed to making a difference, talking and listening to customers about things other than plain vanilla mobile communications.

-       DNA of 02 is changing the rules of the industry or not playing by the rules at all.

-       Our hypothesis was that would differentiate in a commoditized market by looking at the experience we delivered as opposed to the technology – becoming experience focused, rather than technology led.  We become an enabler of great experiences – we are not in the voice or text business – asking people how they want their life enable and you make your device to serve their purpose.

-       The sim-only tariff broke the industry norm of attracting and trapping customers into contract so they cannot exit at will.  Competition thought 02 were crazy and their customers would leave them, but they didn’t.

-       02 did not only change the contract terms, they changed customers’ experiences,  network experience, shopping experience and tariffing experience  - Now their deeds were matching their word – the keep it simple.  Ultimate vote of self-confidence.  This attracted loads of customers to 02.

-       Changing the way the industry works.  Telecommunication is notorious for making the simple incredibly complex.  When a new customer contacts us, the first thing the industry will say to the customer was “what you need to do is………, well if that’s the start of any conversation, you have lost it already.  At 02, they became ruthless at taking out the things that customers don’t value and refocusing more of our energy and our resources on things that they truly value.

-       Existing and new customers were offered new deals against industry norm of only offering new prospects deals to convert them.

     

Turning people to fans

-       If you cannot turn your employees into fans, there is no way that you will turn your customers into fans.

-       Providing value to customers “If we make 10 things 10 percent better, we become 100% better – categorize customers into categories as regards their value to your capacity and treat them accordingly well.

-       We are a customer insight company, first and data-based second.

Bold Lessons

-       It only works when it all works – we will be doing well when all of us is applying themselves, not a few.

-        Ying Yang – Always give customers and employees some love to appreciate them. 

-        Create a victors cycle – happy employees, happy customers, happy shareholders.

-        It’s about what you do, not what you say you do.  Don’t tell me you are funny, tell me a joke and I will laugh.

-        Courage of conviction – To build a relationship with customers, you have to be clear in your communication and their expectations and your deliverables.

-        Measure what matters.

Bold Practices

-        It bought the naming rights to the “white elephant millennium dome” – one of the largest distributors of live entertainment tickets in UK (e/and partnering with AEG, rebranded it the 02 Arena) which is now the most successful music venue in the world.  (We are in the entertainment business because we are in the experience business 02.

-       Turning people into fans – measures “fandom”, willingness of it’s customers to become evangelic advocates for the brand.

-     02 pioneered sim-only tariff, against industry practice of trapping customers with contract phone lines making it easier for them to leave whenever they feel so.

-        Fair deals for existing as well as new customers.

-        02 products are designed as simple to use as possible.

-        02 took 500 people out of head office and put 2,000 into retail stores and call centres to interface and change customers’ experiences, i.e. relocating cost to those areas customers value most.

-        02 bought Ja Jah, a VOIP Technology that is direct threat to 02 existing technology.

-        Launch Apple Iphone into UK market.  Apple chose 02 for no financial advantage over others but because they were the brand that has most of their type of customers and the brand that is aligned to their own experience in terms of customers’ experience.

-        02 values were bold, open, trusted and clear.

-        02 believes to be in the experience business not the mobile phone business.

          So, let’s be bold.

Culled from:  BOLD:  How to be bold in Business and Win, by Shawn Smith and Andy Milligan