Interview: Lyell Strambi, Chief Operating Officer at Virgin Atlantic

Lyell Strambi, Chief Operating Officer at Virgin Atlantic has been with the airline through thick and thin over the last six years. In this wide-ranging interview, he reveals how the passion of his people and their belonging to the Virgin tribe, (including subcontractors) creates real value for customers.

Since inception but more so in the challenging aviation market taht has existed since 9/11, Virgin Atlantic has earned its stripes in the field of customer service and satisfaction levels are running at 93%, making it one of the very best in the airline industry. My pen nearly melted with the speed I had to take notes, as Lyell covered the intervening years since that fateful day, up to the present in a rapid stream of consciousness. Along the way, he reveals the secrets of Virgin Atlantic’s success, and anyone who is the remotest bit passionate about customers, will want to hear what he has to say.

The scene

In advance of our interview, I sent Lyell some questions covering two main topics:

• Leadership of change
• Creating value for customers

I felt these two areas were worth investigating, as no amount of the slickest CRM technology will have much of a positive impact unless top management focuses on them simultaneously.

Phrases such as these can seem very dry and dusty. As such, they don't really grab the attention. An hour and a half later, I walked out of Virgin Atlantic’s HQ near Gatwick Airport, with a spring in my step and very nearly caught myself whistling. There is nothing dry or dusty about enthusiasm.

Fired up by this, two days later, after relating my impression of Virgin Atlantic's tribal culture I got a team of tax accountants to commit to becoming 'artists' instead of 'geeks'. So I know I am homing in on something deeply essential here: people’s noblest and most engaging instinct – to find meaning in their work and the freedom to enjoy it.

Back to the story...

Lyell disabused me pretty quickly about any preconceptions I might have had about 'change management' or 'CRM'. He knows all the classic stuff, but that doesn’t get to the heart of it, and he is clearly suspicious of pat 'process-jockey' approaches to either leading people or creating customer value. It is not a formula thing. It goes much deeper than that.

When the dreadful events of September 11th 2001 happened all airlines approaching the US were immediately diverted as the airspace closed and military jets scrambled in defence of America. At the time, 70% - 80% of Virgin Atlantic's profits came from trans-Atlantic flights. The airline also had a mixed fleet of new and older aircraft, some of which were caught up in the diversion. The impact was immediate and far reaching.

"The management team set up a war room. It's like bungee-jumping where you know the rope is longer than the drop. As you are falling you are frantically tying knots to make the rope shorter."

"Our first concern was for our passengers and flight crews heading towards the USA. From the 9th to the 14th of September no planes were allowed in or out of the USA. Two of our flights were beyond the point of no return and were diverted to Gander, Newfoundland. This is a small town (population less than 10,000 and only 500 hotel rooms). The runway was like a car park, crammed with 37 planes and over 7000 passengers that had been diverted. IT was obvious they would be stuck here for several days.

With most airlines, aircrew would have left the plane and been put up in a hotel leaving passengers to fend for themselves. Our aircrew stuck with the passengers and made sure that everyone had somewhere to stay. This small town opened its schools, churches and homes to everyone, as all the hotels were full. What could have been a nightmare turned into a fantastic experience, as the people of Gander did everything to make the passengers comfortable and entertained. Our crew visited our passengers every day to pass on the latest information and joined in the activities. Remarkably we got lots of letters from passengers saying what an amazing experience they had had, as well as praise for our crew members. You can’t plan for that."

To limit the exposure to this sudden downturn in transatlantic flights, the management team had to reduce costs. This meant redundancies. To make the transition as painless as possible, the company turned its recruitment team into an outplacement firm, providing coaching on interviewing and CV writing techniques and advertising to firms in the area. A job-bank was created and every company in the area was mailed to let them know about the excellent people who through no fault of their own were now available for work.

"It was important that we demonstrated to our employees that we valued them, even though as a result of the crisis we had to reduce our costs.We knew the staff who stayed would judge us by the way we dealt with those who left"

Many firms in a similar situation may have been tempted to batten down the hatches and look for further costs savings but instead the management team decided that it would use the opportunity to divest the older planes, keeping the newest aircraft.This would underpin the new strategy that placed safety at the heart of the business. It would also send a very positive message of intent that it wanted to emerge in better shape.

During this time the team continued with the investment in the 'Upper Class Suite' project, which has generated a lot of the success and recognition that Virgin Atlantic has fought hard to achieve.

'I hate CRM' - Lyell Strambi

This led neatly on to the thorny subject of 'customer value'. I gave my view that investments in CRM technologies are often made without giving much thought to this. Lyell responded by saying "I hate CRM." He went on to explain that in order to deliver real value to customers, you have to get everyone in the firm thinking and feeling along the same lines. This is not systems or process issue, but a cultural one.

"We’d always had great design and could produce a good product. Virgin Atlantic is different from most other airlines in having its own in-house design team. But this only addresses the physical product. To create a great experience for our customers, everyone in the company has to be involved."

A tribal culture unlocks customer value & innovation

The management team periodically develops big themes to mobilise the creativity of its people. In typical Virgin fashion, one of the first that developed after 9/11 crisis, was:

"Fit and Sexy"

The sense behind this was that if Virgin Atlantic was to become a successful airline, it had to stand out from the crowd. It had to del;iver the basics expected of every airline (FIT) and also develop experiences that helped it stand out from the crowd (SEXY). Lyell has a passionate aversion to 'me-too'. He said that if they see something being done by a competitor that is excellent, they might benchmark themselves against that aspect, but the real source of competitive advantage is to be distinctly different and tough to copy.

The 'Fit and Sexy' theme spawned many initiatives within the company but on top of this staff were asked to engage with passengers to find reasons to interact with them to make their experience more personal and memorable.

Employees are also trained to be acutely sensitive to the needs of customers by reading their faces and body language. One flight attendant, noticed a child playing on a computer game, so he went up to her and said, "I bet I can beat you!"

The design of the Upper Class cabin means that the flight crew is always on show, as the seats are arranged at an angle. If a passenger on a long flight looks in need of some conversation, the flight attendant will go and chat with them. If they are engrossed in something they will be left alone. The whole idea is to help make the time with the airline as pleasurable as possible for passengers, but in accordance with their individual needs.

Sometimes these spontaneous 'little interactions' result in a permanent change. The barman at the Heathrow airport Clubhouse, noticed an elderly lady struggling to eat a meal on her lap as the sides of the chair were too high, causing her to squeeze in her elbows. The chairs were redesigned and replaced.

Brilliant Basics

The 'Fit and Sexy' theme, has since been updated to one that is even more meaningful and promotes a passion within the firm and out to the extended team of subcontractors. This is the 'Brilliant Basics/ Magic Touches' theme. This has sharpened the edge of continuous improvement throughout the firm.

The 'Brilliant Basics', focuses attention on being the best at every service performed that impacts the customer. Any ongoing weaknesses or areas for improvement as singled out for extra focus are assigned an owner. This person has the responsibility to solve the problem and can call on anyone to support him or her. The walls of Virgin Atlantic offices are adorned with photographs of the people responsible for each improvement project and the status of their task. This creates a sense of accountability, importance of the project and momentum.

While a drive for efficiency underpins Brilliant Basics/Magic Touches, processes are designed to support the customer not make it easier for the airline. For example the choice remains with the customer how he or she wishes to contact Virgin Atlantic. Both Virgin Atlantic’s web and call-centre traffic are growing, while many other airlines have reduced call centre staff in pursuit of savings.

Magic Touches

The 'Magic Touches', part of the equation is an extension of the 'little interactions'.

This encourages employees to bring something of themselves into the customer experience. A major advantage that Virgin Atlantic has is that each year some 90,000 people enquire about jobs with the firm. From this they get about 35,000 applications each year and from these it takes about 1500 on board. This allows the airline to be choosy.A pre-requisite is this open and passionate nature that puts the individual in the place of the customer. Lyell or one of his fellow directors always speaks to the new recruits and reinforces the firm’s values:

"Our vision is to grow a profitable airline where people love to fly and where people love to work."

Lyell described the feeling at Virgin Atlantic like belonging to a ''tribe''. This also extends to subcontractors, and he gave two examples. An employee of a security firm, not recognising Lyell proudly told him that he worked for Virgin Atlantic. At JFK airport Clubhouse the chef, a lady called Rebecca, works directly for Sodexho yet she has won considerable praise from customers for her amazing ability to read the mood of the customer and conjure up meals that are just right. When asked who she works for she will say, "Virgin Atlantic, and our customers praise 'Virgins' chef."

Observe the customer to innovate

This power of observation, as well as providing magic touches, also promotes innovation.

Hanging around airports, irrespective of the comfort and service, can be boring. Recognising this, the Clubhouse team creates a more engaging and entertaining experience. Novel technologies are showcased at the Clubhouse, allowing executives to try out new things. The cocktail barman performs and entertains customers.

In the years since 9/11, Virgin Atlantic has a host of innovations to its name:

• First airline to travel with defibrillators and staff trained in their use
• First for remote check-in
• First to have real cappuccino coffee on board
• First to offer individual entertainment systems at every seat
• First to provide door-to-door service for Upper Class passengers
• First to provide in-flight massage

Continuous transformation driven by what customers value
What becomes very clear with Virgin Atlantic is that Leadership of change is not a one-off exercise that can be separated out and compartmentalised from any other initiative. It is if anything an ingrained and daily act of collective and tribal participation in a common quest. In this case to deliver brilliant basics and magic touches.

Our natural desire to compartmentalise CRM into bite-sized chunks, often means that we attempt to separate critical aspects that are more naturally joined. Virgin Atlantic has successfully managed to line up:

• Its vision; 'to grow a profitable airline where people love to fly and where people live to work'
• The right people – careful attention to recruitment of those with the right natural attitudes and abilities
• Focus on what is of value to customers
• And only then – processes & administrative support systems

Engendering that sense of purpose is made easier because of the inclusive and infectious enthusiasm of the management team. Lyell has an airline to run, yet for the hour or so I was with him, he made me feel as if I was one of his customers. I’ve never flown Virgin Atlantic, but next time I come into some money, you can bet your bottom dollar I will.

By Jeremy Cox CMC Editor Business & Strategy
If you would like to contact me and share your own experience or opinion please contact me at [email protected]