Moments of Truth [Paperback]

Jan Carlzon (Author)

Book Description

Release date: February 15, 1989

The president and CEO of Scandinavia Airlines (SAS) shows how to adapt to the new customer-driven economy.

Editorial Reviews

From Library Journal

Moments of Truth is Carlzon's story of how, under his leadership as president and CEO, Scandinavian Airlines System (SAS) emerged from deficits to profitability, improved services, and enhanced its market position by becoming a customer-oriented company organized for change. His strategiesa focus on the customer, encouraging risk-taking, delegating more authority to front-line employees, and eliminating vertical levels of hierarchy for a more horizontal organizationbear the hallmarks of entrepreneurial management and the pursuit of excellence. Reportedly a Scandinavian bestseller, Carlzon's book has a universal message and deserves attention for its clear illustration of these strategies in action. Recommended for business collections. Elin B. Christianson, Library Consultant, Hobart, Ind.
Copyright 1987 Reed Business Information, Inc. --This text refers to an out of print or unavailable edition of this title.

Review

"The best book on leadership by a CEO." -- --John Naisbitt, author of Megatrends

"The best book on leadership by a CEO." -- John Naisbitt, author of Megatrends

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Product Details

• Paperback: 160 pages
• Publisher: HarperBusiness; Reprint edition (February 15, 1989)
• Language: English
• ISBN-10: 0060915803
• ISBN-13: 978-0060915803
• Product Dimensions: 5.3 x 0.4 x 8 inches
• Shipping Weight: 4.8 ounces (View shipping rates and policies)
• Average Customer Review: 4.5 out of 5 stars  See all reviews (29 customer reviews)
• Amazon Best Sellers Rank: #143,768 in Books (See Top 100 in Books)
  • #10 in Books > History > Europe > Sweden

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Most Helpful Customer Reviews

33 of 34 people found the following review helpful

4.0 out of 5 stars Both enlightening and witty June 11, 2000

By Pierre Weydert

Format:Paperback

In "Moments of Truth" Jan Carlzon, the then president of Scandinavian Airlines System, tells the extraordinary story of turning a lacklustre state-run airline into a profitable business that consistently won passenger preference surveys. The central element of Carlzon's line of reasoning is the "moment of truth", a concept that was first formulated by Richard Normann in 1984 and which comprises the notion that a service company's overall performance is the sum of countless interactions between customers and employees, the so-called moments of truth that either help to retain a customer or send him to the competition. As Carlzon does emphasize, the implementation of the idea behind this concept is hardly an easy task to accomplish, especially so because it implies the transition from a production-oriented to a market-oriented approach within the company. The measures to be taken in order to make this strategic realignment possible include flattening the organizational pyramid, making sure everyone knows about the company's vision and, last but not least, empowering "front line" employees. Once these changes have been successfully implemented and are being pursued with perseverance, chances are that the outcome will be, as Carlzon puts it, "millions of satisfied customers and thousands of motivated employees".

"Moments of Truth" can be considered a prime example of how to explain a business strategy on very few pages and in an entertaining way. Although the book is written in an anecdotal style and can easily be read within a couple of hours, its contents are of interest and potential value to every manager in the service industry. Congratulations to Mr. Carlzon on a book that is both enlightening and very witty!

13 of 14 people found the following review helpful

5.0 out of 5 stars Great Model of Customer-Centered and Trend-Focused Company April 8, 2000

By Donald Mitchell HALL OF FAMETOP 100 REVIEWERVINE™ VOICE

Format:Paperback

I see this book referenced in the literature of customer service, complexity science, and employee-oriented studies. Having now read the book, I can see why so many people refer to it. First, the book is extremely clear and easy to understand. It operates at a common sense level that is missing from many management books. Second, the author is describing case examples from his own first-hand experience. And he is certainly not Al Dunlap. Almost anyone would identify with the principles espoused here, which is to focus your resources and attention on where it will do the most good. Although people who refer to this book are clear about seeing the customer service aspects of Carlzon's thinking, I found that his strategic thinking about where trends force improved performance was even more impressive. Put the two together, and you have a remarkable opportunity to improve. Three, he explains very well the context of why he did things and how Scandinavia is different from the United States. That added a lot of meaning for me of case examples that I am not familiar with. If you want to see three examples of how unstalled thinking can make a big difference in your company, I urge you to read this book. Carlzon is a true stallbuster in areas like overcoming communications, bureaucracy, disbelief, unattractiveness, and misconception stalls. If we ever do another edition of The 2,000 Percent Solution, I would certainly like to use some of these examples in it. I particularly recommend chapters 5 (setting the strategy), 6 (flattening the pyramid), 7 (taking risks), 8 (communicating), 10 (measuring results), and 12 (the second wave). You will not find better advice anywhere else on these subjects.... Unlike most management and leadership books, this one is a quick and easy read. Yet it contains a lot of meat. Carlzon seems to be able to get his point across in about one-third the space of most business authors. You'll like the difference. Read more ›

7 of 7 people found the following review helpful

3.0 out of 5 stars You can read it in an hour July 13, 2008

By Tom Munro

Format:Paperback

This short book is an examination of three companies that Jan Carlzon worked for and how he turned them around. The first is unremarkable and is not relevant to his later insights. He was responsible for a company which was a subsidiary of a airline which sold holidays. He reduced costs to get it through an economic downturn.

The next job he had was working for a Swedish domestic airline. The airline was losing money but the ability to cut costs was limited. The reason for this was that the airline schedules and routes had been determined politically. There was limited ability to cut costs. The strategy he used to overcome the problem was to try to increase revenue by fare discounting. The problem was that previous fair discounting attempts had not been that effective. He developed a advertising strategy which aimed at expressing the cost by referring it to notes of currency. This was successful and traffic increased not by an anticipated 20,000 but by 120,000.

Following that he was put in charge of SAS an international airline company that was owned by Norway Sweden and Denmark. His strategy to make the airline profitable was to sell full fare seats. Up to this time Carlzon had made a habit of firing internal marketing units in his airlines and depending on the knowledge of his staff at the front line. He was able to use this knowledge to make his airline attractive to business class passengers.

He removed first class and created a business class.(In his view the only people who used first class with any regularity were airline executives) The business class had a distinct section of the plane which was curtained off. They got on the plane last and left first. They had a distinct waiting area.... He worked out that the most significant thing of importance to business class travellers was prompt departure. He asked one of his employees to come up with a strategy of moving to 100% success of leaving at the right time. They came up with a strategy which identified the reasons for airplanes leaving late. They were:

* Waiting for passengers on connecting flights
* Waiting as a result of meals not turning up for the passengers
* Waiting for late staff
* Compressing flights

A strategy was worked out that would cost an estimated $1.8 million dollars to make flights go on time. From now on no one would wait for connecting flights. Passengers would be put on other carriers. If meals did no turn up it was thought that in most cases there would be a surplus and if there was not customers could be given vouchers for restaurant meals at the next embarkation point. If cabin (as opposed to flight) staff did not turn up the aircraft would take off. The compression of flights means that if a plane was half full it would be cancelled with the aim of trying to fill up the next plane to a full load. Flights simply were to be flown regardless of whether the flight was full. This in fact was going to be the major part of the $1.8 million cost.

What happened was that the strategy of flying on time was so successful flight compression was not a problem. All flights were now full and the strategy only cost $200,000 with the pay off the increased revenue from the full flights.
Another strategy was Carlzon's moth balling of newly purchased airbuses. One of the things which characterizes the airline industry is the use of new technology. To this extent the industry is production driven. The advantage of the new airbuses was that they had a lower cost per-passenger mile. The problem with them was that they were a bigger aircraft and for them to run cost effectively the airline would have to have less scheduled flights and have more people flying on each scheduled flight. This however had the potential downside that the airline would lose attraction to the customer as there was less flexibility in the schedule. For that reason Carlzon kept his older DC 9 aircraft in service as he was customer focused.

The conclusions that Carlzon draws about how to run a company is that marketing and sales are the key. The reality of a company and how it is seen is based on the individual moments of contact that a customer has with the representatives of the company. As these contacts are so important it is his view that the representatives of the company at the client interface be highly motivated and skilled. Further that they have the ability to make decisions about what they do. Lastly that they be in a position to feedback to the management what the realities are. In his view a flatter empowered structure is the key to the success of the modern corporation.

The sorts of things that he did were counter intuitive. It would be thought that aircraft which flew cheaper would be good for the bottom line. It makes good sense to compress flights so that aircraft fly full. Yet it was these things which potentially had the cost of reducing market share. Managers who were isolated from the customers might think it was attractive to cut costs in this way but front line staff are better able to sense the market dynamics of the industry. Read more ›