Over the years I have written and spoken frequently about how change in the business landscape effects strategy, leadership skills, executive careers and, indeed, the existence of entire companies.
Change takes a staggering toll on companies and people. If you look at the Fortune 500 from the mid-1950s only 50 or so companies remain on the list today. Some of those companies went away for the right reasons – they became part of a larger company some of which withstood the fires of market evolution. The vast majority though fumbled and stumbled into oblivion. They didn’t see the change or refused to adapt, continuing to make the proverbial buggy whip even when automobiles began to dominate or that their decisions in response to market shifts were inadequate, misguided, or fell victim to a cascade of other factors.
In my speeches on college campuses and to professional groups across the country, I like to focus on three industries – airlines, communications and healthcare. I use these three as examples because they clearly provide some important lessons on market change, on what to do, what not to do as well as a plethora of cautionary notes for executives will if they take the time to look.
In this post, I want to focus on the airline industry, and one former carrier in particular: Braniff International Airways, an organization that revolutionized airline marketing and cabin service during the 60s, 70s and early 80s. Until a deep national recession, 20 percent credit card interest rates, skyrocketing fuel prices that went up more than 94 percent, and airline deregulation combined to drive the airline into unsustainable losses, Braniff was one of the most profitable airlines.
It was also one of the most innovative, painting their planes bright colors, refurbishing the interiors with yellows and reds and outfitting their flight attendants in uniforms designed by Pucci. It is very unlikely to see uniforms as extravagant as this nowadays, as most companies find that customized embroidered shirts can be just as effective in helping with the overall look and perception of their business. But these startling changes plus enhanced cabin service created a wonderful spirit and propelled Braniff into the forefront of a sea-change in how US airlines marketed themselves – The End of the Plain Plane – and, more importantly, how they served their passengers.
Their employees knew these changes were special and there was an enormous sense of pride in working for an airline that was uniquely different and determined to show travelers that there was a better way. For an industry whose plane’s livery and crew member’s uniforms historically reflected a military heritage, Braniff International established a new standard for style and service.
After the Pucci era, Braniff shifted to Halston ultra suede uniforms and redesigned their colorful livery, including several planes that were painted with bold Alexander Calder designs and interiors that featured leather seats, an industry first, and soothing colors with gold accent pin stripes.
However, due to soaring fuel prices, the stagnant economy and the radical upheaval brought about by airline deregulation, Braniff could not survive. They tried. On one day, they expanded their route network by 50 percent to protect their market share. While there was evidence that the expanded networking strategy was working, they could not overcome a cascade of other economic conditions, most notably deteriorating cash reserves.
The end of a remarkable 54-year run came on May 12,1982 when the airline suddenly ceased operations.
Of course there was anger and finger pointing – that management had become too arrogant, that their egos overwhelmed common sense. That may be.
The most remarkable thing is that many of the Braniff employees never lost faith or pride in what they accomplished – how they dramatically changed the service formula with enormous style. They retain that sense of pride 33 years after the airline went out of business. Their feelings, this devotion, can be found on web pages and on Facebook as well as with active groups of retirees around the country. They speak of their jobs with amazing satisfaction and a remarkable sense of accomplishment even though most of the traveling public today is unaware there ever was such an entity called Braniff International Airlines.
Unfortunately, management at the time probably did not fully appreciate, or understand how they could leverage that powerful reservoir of employee pride and commitment in times of turmoil and market upheaval. That is a lesson that today many leaders still fail to grasp.
In my industry, healthcare, this intensity of pride can be such a powerful force for good, an energy that makes customer service better, patient care safer, and serves to cement community support for the work they perform.
The former Braniff employees do not have bumper stickers or buttons extolling their greatness. They that they truly changed airline service with an approach that was innovative and stylish is just part of who they are today.
That kind of Braniff pride is powerful. Leaders should pay attention to examples like this one.