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Last Friday, I turned in my resignation notice after four years of employment with this company.

My decision was not a hard one, as many problems have transpired during the time that I have been here. Still, you asked me to reconsider my decision because you felt that I was making a mistake and would benefit from staying with the manufacturing company.

It has been said that people do not quit companies—they quit their bosses. In this case, I believe that you quit being my boss a couple of years ago.

Please let me provide you with the specific reasons I am leaving so that you might be aware of them, and perhaps even address them before others leave. Some people have already left the company due to layoffs, while others have resigned to pursue other opportunities.

The department in which I work has been downsized from 12 to 3 people in the last year, and everyone is anticipating more layoffs if the economy and company sales do not improve.

As a result of the layoffs, I have been doing the essential work of those that departed. While I understand that the company does not need as many people when sales have decreased, it would also be nice if the workload was reduced proportionately.

Unfortunately, I am now working long days and nearly every weekend. Because I am an exempt employee, this extra time is not compensated over and above my normal salary.

The second thing is that the company focuses on what they have determined is their primary aim: getting planes into the air.

Too many of Southwest’s competitors focus on something else; there are too many to mention here, but the reality is that with too many things to focus on, nothing gets focused on.

Southwest realizes that to make a profit, the planes have to be in the air, taking people to their desired destination. A plane that is not in the air is not making money.

Third, the company has an efficient organization. The fact that they fly only Boeing 737 airplanes is well known but apparently, until recently, not well respected by their competitors.

The efficiencies of having a single kind of plane to service, fuel and fly makes a tremendous difference for all involved. The learning curve is shorter and less steep.

The company knows who their customers are. Years ago at a conference a regional manager for Southwest told the audience that the ideal customer was not always a business person, although they served that demographic, but a traveler who had some leeway in planning the trip and was flexible about flight schedules. This could be a business person but was more likely to be a vacation traveler or a senior citizen.

Fifth, the company does market research by taking the time to watch customers during the airport experience. By sitting in an airport terminal and observing how different people deal with real and imagined obstacles, the company can take that first hand knowledge and use it to make it easier for those customers to be and stay customers.

As an example, those that use wheelchairs and walkers have an easier time today because someone witnessed firsthand what those individuals had to endure. The competitors of Southwest might see this differently, as a problem and not an opportunity.

Most organizations can learn something from Southwest. Do you hire the right people, for the long term? Is your primary aim crystal clear to every employee? How can you make your organization more efficient? Do you have a solid grasp of your ideal customer? Do you perform research by seeing how your customers “experience” your company? Answering these five questions could make a good company a lot better, very quickly.

Which one will you address first?

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The airline business is a brutal one. If you added up all the profits earned since the industry started, and subtracted the losses incurred during the same time period, the net profits would be a loss. Yet, consistently for the past 30 or so years, without fail, one player has made money, and had fun doing it: Southwest. www.Southwest.com

There is something to be learned from this well run organization. Many books have been written about this company, and many stories have been banded about on how the company got started and how it has grown.

Here are some of the key competitive advantages that Southwest has utilized to become a leader in an industry known for failures.

First, the right people are hired. One key to this is that the organization is not in a hurry to hire people. While the company has the same urgent need to fill positions as any employer, they want the individuals they hire to be the right ones. Southwest hires for the long term. The right people don’t get hung up on titles and job descriptions. People that work for Southwest do what it takes to get the job done. There is a culture of respect within the organization.

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There is a culture of teamwork. There is a culture of fun. There is a culture of openness.

I believe that every business in every industry can learn something from Starbucks. Perhaps the biggest lesson is that it is possible to reinvent a product that has been around for years.

Coffee products were capital intensive, highly competitive, mature, and dominated by brands both local and global, yet Starbucks distinguished itself from the competition in four ways.

First, the company provides excellent customer service by employees who want to be there. They want to be part of a proud, dynamic and growing organization. The people working at the company understand that they are the key to success, and they act accordingly. The company treats its employees well, offering outstanding working conditions and benefits for part time employees.

This competitive advantage enables the company to be selective when hiring. Can the same be said of Starbucks’ competitors?

Second, the company has established a quality product line. While some people don’t care for the taste or flavor of Starbucks coffee, the company has gone out of its way to develop a selection of products that appeal to a broad base of consumers. There are a variety of products available for each time of day, and they are based on the preferences of each local market.

Third, the company has established a physical environment conducive for business. Each contemporary Starbucks unit is located in an area with good parking and access.

At Starbucks, you don’t simply enter a physical place, but rather the appeal is based on the entire experience. It is almost as if Starbucks is saying “Welcome to our special place, relax and enjoy yourself. Stay as long as you like. Our place is your place. Thanks for spending time with us.”

Fourth, each unit is company owned and not franchised. This keeps high quality control levels. This also provides the company with tools to expand the experience beyond the physical venue of the store setting; you can get Starbucks coffee at the office, the grocery store, on airlines and so forth.

Some franchise operations, by comparison, limit the physical distribution which is why you don’t see Baskin Robbins ice cream in a grocery store. Starbucks learned that the experience of the product should not be limited, but it should be controlled.

Ken Keller, 661.295.6892
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Coffee is a commodity, being second only to oil in terms of dollars traded in the world. During my early career days, I had the pleasure of being in the coffee business for eight years. I worked for brands that most Americans would easily recognize on the local supermarket shelf. These brand names were also served in restaurants, coffee shops, airplanes, cruise ships and vending machines all around the country.

As an active participant in the coffee world, I witnessed a decline in daily coffee consumption. My parent’s generation consumed coffee throughout the day, while my generation was raised on soft drinks. Many of my friends never acquired a taste for coffee.

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Many did not have the patience to wait for it to brew in the morning. They would rather reach into the refrigerator and grab a can of soda. “Jolt Cola” was created to fill this need.

During this time, the per capita consumption of coffee declined to less than 2 cups per adult. Times have changed, and more people are drinking coffee today than at any time since the 1960’s. Per capita consumption has increased to 3.3 cups daily.

In an incredibly short period of time, people have developed a new mindset towards coffee. Americans have become increasingly intolerant of drunk driving, and coffee is a nonalcoholic beverage that encourages socialization. People also want a casual environment where they can take their children.

Starbucks contributed greatly to the new consumer mindset toward coffee. Before Starbucks, people went to the local donut shop, a convenience store, or perhaps even a diner to get their coffee.

But there really wasn’t an atmosphere suitable for people to sit and talk, as many of these places wanted to free up their tables for other customers.

Starbucks successfully reinvented a product that had been around for centuries, and was able to charge a premium for this commodity.

The Starbucks chain expanded from 84 locations in 1990 to almost 8000 in 2006.

Howard Schultz, the founder of Starbucks, recognized the growth potential in the gourmet coffee market. He observed that many Europeans enjoyed drinking coffee at sidewalk cafes, while he also noted the explosion in premium wine sales in America.

These two concepts were successfully integrated by Starbucks. Starbucks developed products (known by food marketers as “day parts”) that fit both work and leisure time in the afternoon. They also created a place for socialization after dinner.

Prior to that, public venues were limited to bars and full service restaurants.