Make $2 billion the Westjet way
Posted: May 28, 2008, 4:24 PM by Diane Francis
Riding a stock market wave or being an oil sheikh isn't rocket science but creating a success in a lousy sector is not only a miracle but something the rest of us can learn from.
Don Bell is one of four founders of Westjet, a Canadian airline company which began in February 1996 and has made money for investors ever since ($10 to $50 a share) and actually did so by pleasing its employees then customers.
He dropped by to the Dundee/Dynamic group’s Scottsdale Arizona conference this week and treated the audience to a bunch of really smart business and human resources observations. His truisms apply to any enterprise.
“Now the company, which began with three old aircraft bought from Canadian Airlines [taken over by Air Canada], is bigger than Canadian was with 37% of the domestic market,” he said. “First year revenues were $37 million and now it’s $2.1 billion and the market cap is $2 billion.”
Meanwhile, the tarmacs are littered with fallen competitors. So much so that, as Warren Buffett, famously said once that over the span of 58 years America’s commercial airlines have lost a collective total of US$24 billion. He said that the biggest favor that anyone could have done for investors would have been to have shot the Wright Brothers before they took off at Kitty Hawk.
Here are Bell's truisms -- his ten ingredients for business success:
Find a model that works and copy it. Westjet admired and copied Southwest Airlines, another great business story.
Treat your employees as your number one priority and they will treat your customers the same way.
Share the wealth. (Westjet has a capitalist, not unionized, culture because it matches discounted share purchases of up to 25% of worker salaries, dollar for dollar)
Hire for attitude, train for skills
Empower your front-line employees who work with the customers
Embrace technology. Westjet’s profitability is due to its proprietary reservation system which costs 7 cents per customer compared to other airlines where costs are $5 per person.
First get the business plan, then get the money
Keep it simple
Fly union-free
Party, party, party. (Throw lots of celebrations for employees)
He also said key to creating an intelligent culture was to re-label lots of things. This helped change attitudes and shape the winning DNA which is at the heart of Westjet and other great businesses.
Call Centers were dubbed Super Sales Centers and the modus operandi was to always answer the phone, never take callers through a series of voice-mail prompts. ("Making customers go through this means they will end up with an agent and be mad, thus setting up the agent for failure and the customer too. So we answer the phones.")
Accounting is referred to as Beanland
Executives are called Big Shots
Passengers are referred to as Guests
Employees are People
Policies are Promises
“Attitude is everything and attitude is what you do when you’re not being watched,” he said. “We emphasize four things: smile, make eye contact, listen and remember names. We also have a customer service recovery plan so if we lose your luggage we send you a real apology and a credit for $100.”