A Culture of Questions

Generating the same reports over and over again will never provide fresh insight. Greater profits and productivity require creativity. They require thinking about problems in alternative ways. They demand that traditional thinking be turned on its head. Corporate culture needs to empower people to think ahead. Organizations need to be proactive, not reactive.

No matter how smart or curious people are they can t overcome the obstacle of fragmented information sources. But when the same information is made available to everyone, and it s consistent and accurate, the people asking questions will trust it. The more they trust the information, the more precise their questions will become and the less assumptions they will make. They will have the ability to accurately investigate the entire business environment in which they operate and make decisions to extract added value from it ”quickly and accurately.

In order to capitalize on their information resources, companies need to ask new questions, unusual questions and penetrating questions with unknown and possibly unexpected answers. The more detailed the question, the greater the potential return. Questions answered with summary data are rarely specific enough to yield new insight. Questions answered from detail data lead to new, more detailed questions and will reveal new opportunities. Asking questions is the best way of doing business. Continental has proven it time and again.

Continental Airlines

Larry Kellner, president of Continental Airlines Inc., is regarded as a margin manager. While he focuses on costs and revenues , his mantra is margin, making more than he s spending. Like many companies, employees are one of the key resources at Continental, and more productive employees mean better margins.

Kellner believes that employees rarely make mistakes on purpose. But without the relevant data, the thousands of decisions that Continental makes about its over 2,000 flights a day would be based on guesses and assumptions. In an environment without reliable information, a person is set up to fail.

When Kellner started at Continental in 1995 there was one daily performance report, with no financial data, and historical data was inaccessible for detailed analysis. Kellner and CEO, Gordon Bethune, had a vision of a company that put all the information its people needed at their fingertips. They believed that with the right information people would not only make the right decisions, when decisions needed to be made, but would also spot new opportunities. So actionable information is a double bonus and, in Kellner s experience, employees flourish when they are given the opportunity. It s a win-win situation. Empowered employees mean better business. Motivated employees are happier and happy employees are more motivated. Continental earns accolades for every aspect of its operations and in 2003 the company ranked on the Fortune 100 Best Companies to Work For list for the fifth consecutive year ”an accomplishment that only about 20 companies have achieved.

It s not only the employees who are asking questions. Every day Kellner has his eye on thousands of seemingly small things, asking how Continental might improve. Leadership sets the pace.

 

In a proactive business culture with the right tools and infrastructure in place, creative employees at every level of the organization can get answers to complex mission-critical questions in minutes, answers that might have taken days or weeks to find before ”long after the opportunity was lost.

Here s another example of the power of asking questions.

METRO Group

In 1997, at METRO Group, a major international retailer based in Germany with cash and carry, food retail, nonfood retail and department store divisions, the management realized that the essential prerequisite for the successful implementation of all their business strategies is the in-depth understanding of customer needs. Only through detail information can individual customer groups be targeted and retained to the business. Only the combination of all relevant data in one system can create the common language for all important business metrics. Now, after a major information initiative, every division member receives key data such as sales, profit, stock turn , customer traffic and average basket size every day. Fine-tuning is considered the art of profitable merchandise and customer management. Which might mean that the Frankfurt cash and carry store receives a high-level call from management asking why sales are down together with headquarter analyst s suggestions on where to focus attention for improvement.

Senior management has set a high standard of asking questions and drilling down into the details of the business.

 

At METRO Group, management is sending an important message. Employees at every level understand that asking questions is essential and understanding the details of the business for which they are responsible is critical. With empowerment comes accountability and responsibility. With empowerment also comes higher profitability.

If a new generation of questions is possible, a new generation of answers is enabled.

Wireless telephone companies lose in the neighborhood of 18,500 customers a day. It s called churn, and every wireless company has to deal with the challenge. The cost differential between retaining existing customers and securing new customers is approximately 1:7. It costs seven times more to acquire a new customer as it does to keep a customer. When a customer calls to cancel an account the customer service representative taking the call has less than two minutes to decide if they should try to convince the customer to stay and, if so, how best to do it. Keep in mind, the resources expended to keep that customer are one seventh of what it will cost to replace the customer. The customer representative needs fast answers to a host of questions that draw on information from around the company.

• How valuable is this customer s contract?

• What is the lifetime value?

• How well have we serviced this customer in the past?

• How many of her calls have we dropped recently?

• Which of our cross-sell offers has she responded to and what might she respond to?

• What are competitors offering?

• Can we beat their offer?

In the retail industry, Wal-Mart s ability to ask questions at every level is a model we can all learn from.

Wal-Mart

David Glass, Chairman of Wal-Mart, has information in his DNA; not surprisingly, so does Wal-Mart. Glass makes a practice of asking hard, detailed questions of his managers, every day. Why aren t shovels selling in Detroit? What else do people buy when they pick up diapers? His questions set the pace for the company. To be successful at Wal-Mart down the line, asking detailed questions and looking at the business and how to do it better are critical.

In a store in Laredo, Texas, for example, the manager analyzes years worth of sales data, factors in variables like weather and school schedules, and predicts the optimal number of cases of Gatorade, in what flavors and sizes, the store needs for the Friday before Labor Day. But that s not it. Then if the weather forecast suddenly calls for five degrees hotter, the manager has already arranged for an extra delivery of Gatorade.

At Wal-Mart, attention to detail means the company is prepared for change and able to seize opportunities on a day-by-day basis.

 

Asking detailed questions is valuable, on the top line and the bottom line.

These kinds of questions exist in every industry. Being able to answer questions at this level of detail has enormous implications. Corporate leaders must create a culture that encourages employees to ask the profitable questions, a culture that gives them the actionable business intelligence to do it. Regular reports are only a starting place. Daily, weekly and monthly reports are good for showing past errors but they don t lead to new ideas. Innovation requires looking to the future, asking new questions and looking at information in new ways.

Experts Say

The Devil is in the detail. Information that is captured once and at the source provides the most dynamic view of the details, as it enables companies to build upon previous knowledge, expand their current understanding of their environment, and it enables business leaders to make faster, more informed, business- impacting decisions.

Randy Mott
Senior VP/CIO
Dell

 

Asking questions does more than enable innovative solutions. It is a process of leveraging history to predict the future and knowing the business so well surprises don t happen. Downturns in business rarely happen out of the blue. The information is out there; it s up to us to keep track of it and heed the warning signs.

Qantas

In 1997, as the Asian economic crisis began to unfold, Qantas had seen some early warning signs of the impending downturn as bookings from Asia to Australia began to erode.

The airline s senior management was able to adjust to what it correctly suspected was a major economic downturn in Asia by taking swift action in cancelling services and redeploying the assets to operate in more profitable markets.

Qantas three- tier information system combines regular performance reports, what-if queries by business analysts who constantly remodel the reports and the ability to conduct investigative research in the data. The granularity and availability of Qantas data enabled it to react quickly and effectively to rapidly changing business forecasts. Qantas was not caught off guard by the Asian economic crisis. Control over its information means control over the future.

 

Control over core operations gives us the space to innovate and to envision where the company can go next . Industry leaders achieve their position because they build a rock-solid foundation of information and analysis. Strong leadership vision, a single version of the truth and empowered employees asking questions ”these are the hallmarks of a company prepared to prosper in the new economy. Successful companies shape their own future and that of their entire market. Let s see how different companies are doing it.