January 28, 2009
This post is on customer service because of an email I recently received from WestJet. I’ve appended it below.
<Begin WestJet message>
As a valued Guest, we would like to remind you that you currently have a credit which will expire on the date listed in the above subject line.
You can use your credit to book a flight for yourself to visit friends and family, or you can surprise a friend or relative by transferring your credit to them. Please contact our Sales Super Centre in Calgary at 1-888-870-6258 prior to the expiry date if you’d like to use or transfer your credit.
With over 45 North American and Caribbean destinations to choose from, planning your next trip has never been easier. Visit westjet.com for more details. Your credit can only be used to book flights and is not eligible to book packages with WestJet Vacations.
If you have already used your credit, we thank you for choosing WestJet, and look forward to seeing you again soon!
Bob Cummings, Executive Vice President
Guest Experience & Marketing
<End WestJet message>
This is the second time WestJet has contacted me to remind me of credits I had forgotten. Last time the company actually phoned me. WestJet could have just let the credits expire and it would have been fully justified in doing so. However, by being proactive, the company sends me the message that it cares about me as a guest and is looking out for my best interest.
WestJet “gets it”. The company understands that customers matter. It understands that the only rules that are important are those that help your customers come back over and over again. It understands the big picture. In this case, it “spent” $100 on my credit, but by doing so ensured that I will continue to be loyal to the company (and I fly back and forth between Prince George and Vancouver almost every week).
My father did a lot of domestic and international business travel when he was professionally active. He often paid full fare for first or business class seats. He had been loyal to Air Canada since the 1960’s – even when being pressured by colleagues to fly Canadian Airlines, WardAir (in the day) and WestJet. Over time he accumulated a lot of Aeroplan points, so when he received a statement notifying him that a large portion of his points had been “retired” he was, naturally, surprised. When inquiring with Aeroplan, they simply notified him that rules had been sent out to him and that, had he read them, he would have known that unused points are eventually retired.
It was his fault for not reading the rules. Aeroplan was right, no doubt. But I too was at fault in respect of my credits with WestJet. Both credits were sitting there on my account and I just had not used them. But instead of letting my credits expire, in accordance with its rules, WestJet was proactive. Air Canada’s Aeroplan was not.
WestJet’s approach has had the benefit of creating a collegial relationship with me. Air Canada’s approach creates an adversarial relationship. What I now find is that I give WestJet a lot of slack when it is running late, has equipment problems, makes errors etc. etc. That is because I know the airline cares about me and looks out for me. I do not afford Air Canada that latitude.
I do not blame Air Canada’s front line employees, but I do blame Air Canada’s management. Management creates the culture and empowers its staff. It does this by espousing a system of beliefs and by setting boundaries.
It may sound a bit glib, but providing exceptional customer and guest experiences is not that hard provided that an organization has a clear system of beliefs (“without our guests we would not exist, therefore, we believe in making every experience with our company a positive one”) and easily understood boundaries (“we are never permitted to blame customers”).
The system of beliefs should permeate the entire organization. It is a feeling, it is a culture and, developed and deployed properly, becomes a non-negotiable for every member of a company’s team – from the CEO to the janitor.
Setting boundaries and then letting your team operate anywhere within those boundaries permits creativity, entrepreneurship, empowerment and fleet footedness. Let them loose to do what they think is right. The CEO of the hospitality company I consulted to put it best when he said, “if it feels right then it probably is – so do it”. He was able to provide this freedom in part because we had clearly defined boundaries and a terrific system of beliefs.
Here is to WestJet’s continued success and growth. Let’s hope more companies are able to follow the example it sets.
January 23, 2009
“Let our advance worrying become advance thinking and planning.” – Sir Winston Churchill
For those of you who do not know me, I have started, managed and sold two start up businesses. My first was a restaurant which grew to about $4 million in revenue, was profitable and employed about forty people. My second business was a computer services firm which grew to $1.5 million in revenue and ten employees.
I sold my restaurant when I was 24 years old and felt like I had the “midas touch”. It was successful out of the gates, was very popular in our community and grew beyond my expectations. That first success had me convinced that I could do it again without much effort. Boy was I wrong. I made a ton of mistakes in my second business and paid for them.
While I could probably fill many blog posts just listing my mistakes, I think my fundamental error was not developing a well thought out plan. I am convinced that, had I put some thoughts on paper before starting my second business, it’s doubtful that I would have ever founded it. This is not because it was a bad business, but more because it was the wrong business for me and what I wanted to accomplish.
More on my second business in another post.
I often tell budding entrepreneurs that, knowing what I know today, I wouldn’t have invested in myself when I started the second business. Instead of researching a market, identifying a problem, designing a solution, understanding how I was going to make money and assembling the right team I just “went for it”. I’m convinced I did this because I had already been successful once, why not a second time?
Since selling the last business I have come full circle and am now a fervent believer in planning. A business plan doesn’t need to be complex, it just needs to answer a few fundamental questions:
(1) What is the problem?
(2) What is your solution?
(3) How are you going to make money?
(4) Who are you?
I decided to post on this topic because of a recent email exchange with my sister-in-law. For sometime now she has been convinced that an opportunity exists for her to develop a patient advocacy consulting practice. I won’t butcher her business concept here, but suffice it so say that I agree with her (and have recent experience to bolster my point of view) and think she should do it. But, I don’t think she should do it without a plan.
In our most recent exchange she wrote that she was, “at an absolute standstill.” She thought it was because she didn’t know how to market the concept (although there are two physicians who have already agreed she has an interesting business in mind and one specialist has gone so far to offer to help market her business through his web presence). But, in my view, she’s at a standstill because she hasn’t answered the four questions appended above.
She’s going to write the plan and I have offered to act as her sounding board. The hardest part of planning is getting the first words on the paper, so much like she plans to be a patient advocate, I will be her “planning advocate.” I will post on her progress here and hope to be able to announce the launch of her business in the not-too-distant future!
January 21, 2009
As some of you know, I am consulting to the University of British Columbia in the formation of a campus wide program in entrepreneurship. It’s been eight years since I owned my own business, so while I can’t consider myself a current entrepreneur, I certainly have the bruises to prove that I am entrepreneurial (stay tuned for the results of my current business pursuit).
I’ll post on our program as it evolves over the course of the next several months, but in the interim let me plug a terrific group of UBC students who are putting together Canada’s premier student run business plan competition.
Enterprize Canada (www.enterprizecanada.org) is a Canadian national business plan competition that provides students from across this country an opportunity to have their business concepts and plans vetted, critiqued and submitted for all sorts of prizes and accolades. I know one of the organizers (Boris Remes) and if his method of operating is any indication of the quality of this event it will be a incredible buffet of entrepreneurial excitement!
As I go through the process of forming UBC’s entrepreneurship program, I’m constantly invigorated by this university’s entrepreneurial talent. Whether it’s the 2nd year Applied Science student who has a growing business and is struggling to decide whether to finish his degree, or the young alumna who is building the next great web 2.0 business – these young entrepreneurs are incredible.
If you’re a business person who wants a look at the next generation of business leaders, an investor looking for the next great thing, a mentor give something back to today’s young entrepreneurs or even an entrepreneur looking for mentorship, skills development, money or profile then check out this event.
January 10, 2009
Household financial management
I am putting together a financial management system for our household. In the great words of one of Canada’s most respected think tanks, The Fraser Institute, “if it matters, measure it.” We’ll be measuring our budget and keeping it simple.
Here is our system. Use it, plagiarize it, criticize it or tell me what you do.
(1) We put together a system of accounts which is on a cash flow basis (both my fiancé and I receive the cash from our incomes several weeks after we earn it)
a. Revenue which equals our combined income (as opposed to sale of capital assets).
- Cars – including fuel, insurance and maintenance
- Dog – all expenses related to our puppy
- Entertainment – including everything fun except going out to restaurants
- Groceries – all non-restaurant food items
- Household – all expenses related to the roof(s) over our heads
- Savings – in accordance with The Wealthy Barber this should be no less than 10% of your income (I like it to be 10% of gross income, not net)
- Tax Provision – our income taxes are not deducted at source, so we need to put aside enough cash to cover our tax liabilities.
- Travel – personal travel including vacations and trips to visit family
c. Net cash flow
(2) Our accounts are listed in an accordion file folder that holds up to sixteen accounts (good for when we add more)
(3) We collect receipts for everything we purchase whether paid for by credit card or by cash.
(4) When we come home we each file our receipts under the most appropriate account
(5) At the end of each month I enter the receipts into our chart of accounts, give my fiancés credit card receipts back to her for reconciling against her credit card bill. I keep mine for reconciliation. I throw out (recycle) the cash receipts.
(6) We measure our actual results against our budgeted results and determine where we need to make changes.
This is a very easy system to follow, only takes a few minutes per month, ensures you know where your money is going and helps to monitor your savings.
Let me know what you do.
January 4, 2009
It is not pretty, but I have taken a look at my portfolio and its 2008 performance and thought I would post some details here.
Structure – defensive and ready to buy
I hold a combination of equities directly and through index funds. I also own bonds through index funds and hold cash in my registered retirement fund (RRSP’s in Canada, roughly equivalent to the US 401K) and in a non-registered trading account. I trade on my own account through a major Canadian bank’s online brokerage.
I am pleased to say that I think my portfolio is fairly defensive with 32% in cash, 42% in equities and 22% in bonds. At the age of 35 and using the “100 minus my age” rule of thumb I should be 65% equities and the balance in cash and bonds. Over 2009 I expect do some buying, so the composition of my portfolio will likely change significantly in favour of stocks with some additions to my bond holdings too.
Holdings – not sufficiently understood
Admittedly I am bit embarrassed publishing a chart that specifies my holdings. This embarrassment is not necessarily because I think the holdings are bad, indeed, I would not own them if I thought they were bad.
I am embarrassed because I have not done nearly enough research on my holdings. I own index funds and have not dug deeply into each fund’s holdings. Consequently, I do not really have a handle on whether I am properly diversified. Additionally, I have not performed the necessary financial analysis to determine whether my equities actually create shareholder value commensurate with their risk profiles or whether they erode it.
What a year. My non registered account is down a mind numbing -19.21% and my RRSP (the money I plan to retire on!) is down a slightly less unnerving -16.09%.
The only solace for me is that according to Google Finance, the S&P TSX Composite is down more than -33% and the S&P500 was down almost -37% for the twelve months ended 2008. So I am only slightly less unsuccessful than the S&P. Most certainly nothing to write home about.
2009 – “You only tell who is fishing naked when the tide goes out.” – Warren Buffett
I have put together an investment discussion club comprised of five friends and myself. All six of us come from different professional backgrounds (an entrepreneur, an Accenture consultant, the director of fiscal studies of a major Canadian economic think tank, the CFO of a small technology company and a director of business development from a battery supply company) and we range in age from 35 to 47.
What we share is a keen interest in our investment portfolios. We will not necessarily invest together and we are not putting any money on the table, so it is not an investment club per se. What we will do is discuss investing strategies, methods for putting our personal portfolios together, tools for assessing investment opportunities and we will discuss specific investment recommendations.
Our group’s expectation is that we all become better investors and reach financial independence sooner as a result of our learning.
My hope for myself is that the group impresses sufficient discipline on me so that I will properly assess my portfolio, put more structure into its construction and take the time to review the financial performance of current and proposed equities.
Over the course of the year I’ll continue to post my portfolio’s performance. If I have done my job properly then I should do far better in 2009 (after removing the effect of a far improved market (hope springs eternal, right?)).