In my recent quest to dominate business knowledge, I wrapped up reading Winds of Turbulence, an overview by Howard Putnam of what it is like to be CEO of an airline that is both successful and fruitful and one that is struggling and on the decline. It takes courage to lead a company to greatness, and it takes even more guts to lead one through a declining and turbulent time of potential failure. The book was a wonderful read – very concise, not full of unrelated tangents, and was just entertaining and full of great and practical business examples of dos and don’ts, as well as some painful lessons learned.
Few industries have the ebb and flow that the airlines experience, regulation, deregulation, fuel costs, purchasing of planes, influx in prices, war, raw materials cost. It all has a very real impact on an airline’s bottom line, which in turn affects ticket prices, customer satisfaction, etc. It makes it non the easier to be successful, and guaranteed success is a “fleeting” (airplane pun) thing indeed :D Anyone heard of Northeast Airlines, Braniff, or Pan Am? Exactly.
Listed below are some of my favorite anecdotes and high level themes from this book. I take no credit for creating these and took them from the book itself. Credit where credit is due.
Budgets and Finances
· Budget mentality creates waste – The behavior and attitude of a “budget mentality” almost never reflect a company’s true needs. Ask anyone who has ever worked for a state or government agency. The mad rush to seize all the funds they can get creates wasteful spending, poor allocation of resources, and fosters a hostile and competitive environment instead of departments working together.
· Emphasize service and quality over profitability– This is one of my favorites, especially in the post 2008 world where greed and the mad pursuit of money and exorbitant wealth was a far cry from serving customers with a quality product while maintain a healthy, reasonable profit. Reality check: you can’t increase profits 5, 10, 30% on a yearly basis for forever! There isn’t enough economy to drive it.As stated in the book, “the bottom line will almost always take care of itself” p. 101
· Productivity goals – Budgets are bad and unrealistic for projections, instead companies should focus on what they are producing and the costs associated with that production. Maintain reasonable guesses to meet those needs, and only spend what you absolutely must.
· Spend $.85 to make $1? – Absolutely! Morality and ethical issues aside, a company should always be willing to spend some amount of money to gain an ROI if it is in line with their business plan, goals, and objectives.
· A company cash shortage $27,000 party – This story just makes me sick, in the midst of a cash crisis at one of his companies, a bill was paid for a $27,000 cocktail party. People are losing jobs, the operation ability of the company is up in the air, and someone threw a huge bash for no other reason then “they always do it.” Can you imagine? I would be irate! Needless to say, they lost their job… lesson learned: don’t be STUPID.
Keys to Success
These points truly speak for themselves and can apply to any aspect of life:
· “A plan is nothing more than a guide for action within an arena that is constantly changing. The demands of the environment must drive actions… the purpose of the plan is to reflect those demands…”
· “Report simple, timely, and honestly,” even when it doesn’t show you in the best of life. People appreciate straightforward news and high integrity far more than anything else. Anybody remember when Bear Sterns ate it in 2008? Literally the day before, their CEO insisted that “everything was fine.” Ha!
· Ability to laugh at ourselves – People, please. Don’t take yourselves so seriously! Work is serious enough as it is, and yet it is important to remain lighthearted.
These are the absolute musts for any company to follow religiously. It should be engrained in your culture and encouraged and supported at every level. No exceptions!
Needs of society
Benevolence to the environment
What are some other keys to success? Enjoy your weekend!