Team, Not the Leader, is Key in Service Industry, says Lufthansa CEO - CSR Minute for September 19, 2013

Sep 19, 2013 12:00 PM ET
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In a service business, it’s the team, not the leader, that counts. So says Lufthansa CEO Carsten Spohr about his management strategy for the German airline. He also says that the American “hype” about individuals who lead companies from the top down is “over.” Spohr describes his work schedule as CEO as 30 percent meetings with front-line staff: pilots, flight attendants, and mechanics. This approach keeps him close to the details of airline service and to the employees who execute them.

It also informs Lufthansa’s new internal efficiency program, SCORE, which produced 800 measures last year that reduced costs, resulting in $852 million in added profit. The strategy comes naturally to Spohr: a licensed Airbus pilot for the airline, he is a rare mix of pilot and manager. Keeping close to the details is important in an industry that Warren Buffet called “a death trap for investors.” Recently, the global airline industry has been in one of its periodic upticks.

The Bloomberg World Airlines Index is up 23 percent in the last year. But Deutsche Lufthansa AG, the parent company of Spohr’s airline, is up 30 percent. A thorough review of Lufthansa’s model might reveal a case study packed with positive guidance for all businesses in service industry sectors.

I’m John Howell for 3BL Media.

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