Innovation in the Air – United Abandons Airline Dogma and (surprise) it Works!

A recent Wall Street Journal article details United Airlines’ “p.s.” service, an enhanced First and Business-class offering between New York, LA and San Francisco. As airlines grow increasingly adversarial with their customers, removing pillows, snacks and flight crew decorum, and nickel and dime passengers for everything from checked baggage to bad in-flight entertainment, the move by United stands out for taking the opposite tack.

With a great abundance of whining about oil prices and cheap customers, airlines seem to be tripping over each other to offer the poorest service levels. Champagne has long since disappearing from most first class cabins on domestic flights, and pity to poor soul in coach who might think an 8oz. bottle of water would be included in her fare. Business travelers have long been the golden goose of the airlines, and now even their benefits are cut while fares climb. Airline dogma seems to be: they’ve got nowhere else to go, let’s cut ‘em to the bone!

United, albeit only on two routes, jettisoned this mantra of mediocrity and embraced a “revolutionary” concept: people will pay a premium price for a premium product, and you’ll actually make money on it! As the WSJ mentions, loyalists of other airlines have defected to take advantage of this premium service, and the routes are the most profitable of United’s entire network. Color me skeptical, but I fear few other airlines will take notice, and most will continue cutting service and raising fares, making flying a nightmare from the second one gets exposed to the inanities of the TSA to the moment one arrives at their destination. The silver lining of this article is its applicability to other industries, and a testament to the effectiveness of moving against the pack.

With the economy turning sour, many companies are doing their best tortoise impersonation, retreating into their shells and looking at cost cutting and retrenchment as their preferred modus operandi. This creates a marketplace full of opportunity. Whether full or flush, there are always consumers and businesses that need a premium product and are willing to pay handsomely for it. Internal organizations, like IT can strive to create value and increase competitive ability while their counterparts in other organizations pour over their budgets, red pens in hand.

While your competitors refuse their customers a handful of stale peanuts, offer yours a cool glass of bubbly.

Forget “Alignment”

We’ve spent more than a decade in IT talking about “alignment” and “getting a seat at the C-suite table.” In contrast, look at counterparts in Finance, Sales, Marketing or Operations. There is no talk of aligning Sales with “the business,” and rarely do you hear CFOs or COOs lamenting their inability to get the CEO’s ear.

While Marketing and Sales direct all their efforts towards increasing the company’s bottom line, we in IT tend to focus on technology as the sole reason for our existence, rather than the tools of the trade to accomplish the company’s objectives. It’s time for a shift in thinking, and IT needs to see technology as our toolkit, not their raison du être. The best carpenter will work with you to design a new porch for your house, determining how you intend to use the porch, addressing aesthetic and pragmatic concerns, and asking questions you might have otherwise not considered, well before the first nail is hammered. Too often in IT we show up with nails and hammer in hand and start working, when the problem might require a plumber instead. IT’s role should be more about joint problem solving and diagnosis than just implementation.

Rather than trying to justify our toolkit through tenuous ROI and TCO calculations, IT should look to improve bottom line results; technology is part of the solution but not the solution itself. This shift in thinking alleviates the need to debate mercurial concepts like alignment. If you’re working to improve the bottom line like any other business unit, you are aligned. You also eliminate the need to justify IT expenditures. When you’re selling improved market share, rather than a new data warehouse, everyone is talking the same language and focusing on the results, not haggling about whether #2 or #3 nails are appropriate for the project at hand.

The Genius of Apple

Many look at Apple as having revolutionized the computing industry. From sleek rounded machines in an age of boring beige boxes, to the iPod and iPhone, Apple has a knack for introducing successful products. While Apple’s success seems to stem from innovative thinking, at their core they borrowed an old concept: becoming a platform company.

Before the personal computer had landed on nearly every desk and Microsoft was a household name, platform companies ruled computing. If you bought an IBM machine, whether it was a “workstation” that sat on someone’s desk top or a huge mainframe computer that occupied a small room, IBM made the hardware, software and most of the application. A competitor’s machine could not run IBM’s software and vice versa, and you purchased your entire “computing experience” from a single company.

This all changed with the personal computer, and IBM’s decision to have a small Washington state software company make its operating system. This seemingly spelled the end of platform companies. Microsoft now made the software, and IBM lost its grip on the personal computer market, as competitors flooded the scene, all of their machines equally capable of running Microsoft’s software. Software became the key to computing, and purchasing decisions were made based on what software you wanted to run, rather than the manufacturer’s badge on the hardware.

In this environment, Apple struggled mightily and for a time tried to follow in the footsteps of IBM and allow commodity hardware from a number of manufacturers to run its operating system. Once this strategy failed, Apple looked to Steve Jobs with hopes of innovation and new thinking that would save the struggling company. Rather than striking off in yet another new direction, Apple under Jobs leveraged its biggest difference with its competitors: the fact that it was a platform company in a world of hardware and software companies.

One of the PC’s most attractive features was also a grave weakness. Microsoft software worked with hardware from literally thousands of vendors, functioning on everything from machines sold to mainstream manufacturers, to high-performance PC’s built in the garages of enthusiasts and gamers. Hardware quality was not directly under Microsoft’s control, and a hodgepodge of vendors, software components and poorly-developed supporting applications created a perception that PC’s were inherently crash-prone, and that one needed a full-time technical support staff to keep their machine working and free from the nefarious threats posed by viruses and crackers.

Apple controlled its hardware and software, just like the IBM or Digital Equipment of old. Rather than supporting thousands of possible hardware configurations, Apple supported a handful, and provided for an aggressive strategy of “planned obsolescence” to reduce the need to support older hardware. Apple even took a page from the playbook of the legacy platform companies, providing hardware and software support, and developing a slew of ancillary applications, from word processing to video and music editing, all while Microsoft was forced to fragment its software offerings due to competitive concerns.

In addition to owing its entire platform, Apple expanded the platform concept horizontally, creating “feeders” into its core computing products in the iPod and iPhone. Aside from the obvious design queues, both devices were pure Apple: combined hardware and software that focused on an integrated “experience” rather than a bullet list of features of technical functionality. In marketing these devices, a subtle yet recurring refrain caused consumers who liked the platform to wonder if it would be even more successful when paired with a Mac computer and operating system.

There’s a certain genius to identifying the core strength or differentiator of your company, and applying it across your products and go-to-market strategy. In Apple’s case, it was dusting off the notion of being a platform computing company, even as the world at large scoffed at the model of distinct hardware and software companies, each racing toward increasing commoditization. There may be a comfort in the anonymity of moving with the pack, following the latest business “gospel” spouted by self-appointed soothsayers. Look at your business and search for unique competencies, products or experiences, vis-a-vis competitors. Flashy product design and skillful marketing certainly contributed to Apple’s recent fortunes, but a willingness to exploit a decades old business model while the competition blindly followed Microsoft and IBM also played a critical role. What seemingly antiquated competencies can you dust off and use to define your own market?

Run What you Brung

There’s a saying in motorsports circles to “run what you brung,” meaning that rather than lust over turbochargers, engine modifications and esoteric tunings, simply drive the vehicle you came with, in its current state. It’s easy to attribute any failings in your ability to the tools available to you, or expenditures and enhancements that are in the works. In many cases, IT too should focus a bit more on running with what it already has available.

Most of us have been through huge systems implementations or upgrades, where thousands of hours and millions of dollars result in a go-live that brings a palatable sense of relief, and a desire to move onto the next challenge. Bits and pieces of functionality or process changes are pushed back to some future date, and as the personnel and money focus on the next project, these lists tend to become lost or shuffled off on junior staff. The hard work done, millions of dollars of additional business benefit lie untapped, with IT turning its attention to the sexy new project rather than putting the final spit and shine on what was just implemented.

With corporate budgetary belt-tightening becoming an increasingly likely scenario, look for systems that are already in place, where significant process or cost improvements can be found and realized with minimal effort. Dig up the long ignored lists of future enhancements, and investigate what can be done quickly, cheaply and with the most impact, and look to refine what you already have in place, as requests for new implementations will likely face increased scrutiny. Instead of the next big thing, run what you brung to the accolades of your peers in the C-suite.

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