How To Run A $20bn Airline

Beside a hotel pool in Bali recently, I read Status Anxiety by Alain de Botton.

I highly recommend it. (The book, and the poolside reading location.) But to save you the trip, let me give you Brent’s 30-second summary:

There’s an underlying anxiety about “who we are”, and how valuable we are as members of society.

And everyone has it. You have it. I have it. Bill Gates has it.

In the past, people didn’t have to worry about their status and role in the world. Royalty and peasants were set into their roles at birth. If you were born into the aristocracy, you’d be an aristocrat for life. If you were born a peasant, you’re a peasant for life.

But today, we live in a society where we can be whoever we want to be.

The possibilities for achievement (sexual, financial, professional) are higher and more varied than ever. But with so much variety in who we can be and what we can do – there are also unlimited ways we can compare ourselves to others, and judge ourselves to be “losers”.

The truth is, we can’t “have it all”.

We can have a lot – but not everything – and once we decide what is most valuable to us, we can live more healthily, and more happily.

The Same is True of Business

There are endless opportunities we COULD pursue in business – a seemingly endless list of things we SHOULD be doing – and an almost endless stream of interruptions in our day (from clients, staff, sales prospects, etc).

But not all of these opportunities, task and interruptions are valuable to us.

And by maximising the amount of focus we give to what’s important, we can have a happier and more healthy business.

What Should You Focus On – If You Want A Happy, Healthy Business?

Consider the following activities within your business:

  • Leadership – identifying (then committing people and resources towards) the highest and most valuable course of action.
  • Marketing – generating leads, sales and profits necessary to successfully fund all other business activities.
  • Management – ensuring performance and quality standards are met.
  • Production/Delivery – actually producing or delivering the thing that you sell to clients.
  • Admin – processing payments, paperwork. It’s necessary
  • Compliance – the mandatory standards that government regulators require you to satisfy, where those standards go beyond what would be valuable for the business itself.
  • Waste – ineffective uses of time, money, effort, people and resources. (To be avoided at all costs.)

The highest value activities are at the top of this list, and the lowest value activities are at the bottom. And the higher tasks have flow-on effects to all of the lower tasks.

Imagine this stream of tasks as a river. If the waters are muddy or polluted at any point on our river, those polluted waters are going to pollute every point of the river below.

Getting back to the question: What Should You Focus On – If You Want A Happy, Healthy Business?

I Confess: There’s Something More Valuable Than Marketing…

I’m a marketing guy – but there’s ONE THING that I believe is more important than marketing.

It doesn’t take long to implement. But I’ve seen PLENTY of clients screw up because they haven’t invested a few minutes into this activity.

The most valuable activity you can undertake as a business owner is Leadership – setting a vision for what you want to achieve.

Once you (as a leader) have committed to this vision, it will be easy to make clear and rational decisions on everything else.

Let me give you an example.

How To Run A $20bn Airline

Herb Kelleher, the genius businessman behind Southwest Airlines, built his business on a simple objective.

“Southwest is the low-fare airline. Not A low-fare airline. We are THE low-fare airline. Once you understand that fact, you can make any decision about this company’s future as well as I can.”

This singular objective informs every decision Southwest makes – from the reason why Southwest flies nothing but Boeing 737’s (reducing maintenance and training costs), to the airports they fly into (the ones with low landing fees), to how they treat their staff (the best in the industry, as they recognise the cost of re-hiring and re-training), to on-board catering, and even their early adoption of online ticket sales – all of this can be traced back to their “low cost” mantra.

Cheating in Business Leadership…

There’s one trait that every leader’s business vision shares…

No matter what your business vision is – whether it’s to feed the poor, see your incredible product change the world, or just simply challenge yourself to make as much money as you can – every business as a need to GROW.

So, even if you haven’t refined your business objective yet, the end outcome you’re going to need to achieve is the same: to grow!

The “Aggressive-Growth” Mindset

A business owner with a clear vision to grow their business develops a condition I like to call Trifle Intolerance.

The key symptom of Trifle Intolerance is a rational, almost fanatical hatred of anything that stands in the way of measurable and lasting growth.

  • Leadership defines the focus (something-plus-growth), and then gets out of the way! No changing the rules of the game on whims mid-way!
  • Marketing gets as much attention as it can – and marketing is held accountable to performance. It works best, or it dies. No if’s or but’s.
  • Management is focussed on quality (as a lapse in quality is a distraction from growth work), and ensuring growth in performance.
  • Production delivers the most profitable product to clients, in a way that the clients are most likely to return as repeat customers.
  • Admin (frankly) has to keep up. The purpose of the business isn’t to serve admin, it’s for admin to serve the business.
  • Compliance is a necessary evil for lasting growth – as falling foul of regulators would be a growth-diminishing distraction. But compliance only deserves the “minimum effective dose”.
  • Waste, misuse and squandering of precious resources that could have been used to help the business grow are the greatest sin. Every person, every resource, every dollar, and every second has its purpose – and its purpose is growth.

In short, resources are redirected towards marketing (near the top).

This is how businesses can grow quickly and substantially – without substantially increasing the number of staff, amount of capital, or number of working hours being invested into the business. By redirecting time, effort and money from less effective activities, to more effective activities.

Speak soon,

Brent Hodgson
(Taking over Pete Williams’ Desk)

P.S. – If you could make a few tweaks to the way you were running your business – make a few 10% gains – and those tiny improvements doubled your profits… Would you make those tweaks?

If so, make sure you grab the 7 Levers and the Growth Paradox white paper we published recently.

about-pete
Pete Williams is an entrepreneur, author, and marketer from Melbourne, Australia.

Before being honored “Australia’s Richard Branson” in media publications all over the continent, Pete was just 21 years old when he sold Australia’s version of Yankee Stadium, The Melbourne Cricket Ground For Under $500! Don’t believe it? You will! Check out the story in the FAQ section (it really is our most asked question).

Since then, he’s done some cool stuff like write the international smash hit ‘How to Turn Your Million-Dollar Idea Into a Reality’ (+ the upcoming ‘It’s Not About the Product‘) and he’s created a bunch of companies including Infiniti Telecommunications, On Hold Advertising, Simply Headsets and Preneur Group.

Lots of other people think he’s pretty good too! He’s been announced as the Global Runner-Up in the JCI Creative Young Entrepreneur Awards for 2009, the Southern Region Finalist in the Ernst & Young 2010 Entrepreneur of the Year, and a member of SmartCompany’s Top 30 Under 30.

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