Waiting for my flight in the lounge area of San Francisco airport, I wondered how American Airlines will fare with the disruption of operations following their Chapter 11 announcement and the loss of their CEO who quit for moral reasons following the board's action.
In Innovation in a Reinvented World I compare four industries operating in the old world of business versus the new world of business--transportation being one of them--and how the U.S. has slipped behind the innovation curve. Ironically, I list American Airlines as the only major U.S. carrier to avoid bankruptcy proceedings while still performing its maintenance, repair, and overhaul (MRO) work in the U.S.; unfortunately, another potential disruption to operations in a Chapter 11 world.
Although quick to appease skittish customers that it would be business as usual, American Airlines must keep in mind that two types of customers exist: the external customer--the buying public--and the internal customer--the innovating workforce.
Not only is it going to be tough managing day-to-day disruptions associated with shifts in business, AA will need to parallel-manage disruptive innovations within the company. The only way to do this successfully is with a surplus of trust with both customers.
Trust Deficit vs. Trust Surplus
Much of my 25-year career and business has focused on two sides of the same coin: disrupting the status quo via innovations and helping others navigate their way through organizational disruptions.
Innovation catalysts can weaken customer confidence when they disrupt daily operations, and if they fail to account for this ahead of time they risk creating a trust deficit. You'll want to bank enough customer credibility to tie you over a self-induced business disruption. Your goal is to approach a disruptive situation with your customer accounts in good standing, thus creating a surplus of trust.
A bigger challenge--and one that many businesses find themselves in today--is successfully managing market driven disruptions, customers' demands, and an organization's needs to fast-track internal innovations. Businesses that didn't pace themselves throughout the Great Recession are scrambling coming out of this economic slump.
This is where alignment of your internal customer base, i.e., your employees, along with your external customers, partners, and suppliers becomes critical. Product, service and process innovations don't happen by accident.
Assessing Your Trust Quotient
Let's begin with your internal customers and business partners. How loyal are your employees? How engaged in the company's reinvention strategies have they been during the last three years? Did they channel their energy into fear-based activities, e.g., fear of layoffs, instead of creative endeavors plus personal risktaking that fully engages them in the innovation process?
According to the Q4 2011 Randstad Employee Attachment Index, employees have mixed emotions about 2012:
- 56 percent of surveyed workers think they would not be able to find a job they would accept
- 47 percent plan to explore other opportunities as soon as the job market picks up
- 74 percent feel optimistic about their organization’s future
- 73 percent feel secure in their current jobs
How loyal are your customers? Continuing to nurture the customer relationship through economic ups and downs--whether they've placed recent orders with you or not--is key to retaining trust.
What about your strategic partners and suppliers? How engaged have they been in aligning themselves with your economic recovery strategies? Have you ignored them or did you use the anemic economy to renegotiate existing agreements that squeezed more out of them at less cost (win-lose)? Do you know whether they're using this down time to build new partnerships that could potentially impact your business in the next three years?
Call to Action: Reinvention Readiness
Do you know your organization's reinvention sweet spot?
As a business leader, you'll want to know whether you're facing 2012 with a trust deficit or trust surplus with employees, external customers, strategic partners, and suppliers.
Keep your surprises for the holidays.