Book Report on Jan Carlzon\'s

BOOK REPORT ON JAN CARLZON'S MOMENTS OF TRUTH

In the award-winning book Moments of Truth (NY: Harper Perennial Publishing, 1987, 135 pgs.) author Jan Carlzon relates his personal story on how as president and CEO of Scandinavian Airlines System, he single- handedly transformed his company from the burden of huge financial deficits into a profitable and expanding business with greatly improved customer service and with an international market position unparalleled in the business world. In 1978, as an entrepreneur, Carlzon became the managing director of Linjeflyg, the major domestic airline of Sweden; three years later, he became the CEO of Scandinavian Airlines System (SAS), made up of airlines based in the countries of Norway, Sweden and Denmark. It was here that Carlzon's leadership and his entrepreneurial skills helped to reverse financial losses into great profits. Soon after accomplishing this amazing financial feat, he decided to write a book relating exactly how he did it which was published as Moments of Truth in 1987. In his introduction, Carlzon declares that a major part of the revitalization of the Scandinavian Airlines System was due to turning the company into one that is customer-oriented, for he states, "We have reoriented ourselves to become a customer-driven company," one that "recognizes that its only true assets are satisfied customers" who expect to be "treated as individuals;" otherwise, SAS will not be their selected airline (2). Carlzon then tells the reader where the title of his book came from in relation to having more than ten million customers in 1988-"These 10 million "moments of truth" are the moments that ultimately determine whether SAS will succeed or fail as a company. They are the moments when we must prove to our customers that SAS is their best alternative" when deciding upon which airline to use (3). Obviously, because of his experience in the business world and his

entrepreneurial spirit, Carlzon has come to realize that all businesses must dedicate themselves to customer satisfaction, for if customers are not pleased with the service they receive from a company, they will not return for their services. In Chapter One, Carlzon discusses the overall business climate that existed in the late 1980's and how his personal business strategies related to his employees helped SAS to achieve such unprecedented success in the airline business world. "In a changing business environment," says Carlzon, "you can't wield total control from the top of the pyramid. You must give people authority. . .They are the ones who can sense changes in the market" and through providing employees with "security, authority and the right to make decisions based on current market conditions," the CEO of any given company places himself in "the best position to gain a competitive edge" in not only the airline business but also other businesses which rely upon a broad and happy customer base (38). Throughout the rest of the book, Carlzon examines in-depth numerous aspects of the business world which he feels affects the success or failure of any given company. For example, Carlzon poses the question, "How can you know what your goals and strategies should be if you don't have a clear idea of the environment you're working in or of what your customers want?" (43). In addition, Carlzon sums up his argument pertaining to business customers by offering a very sound piece of advice for all those who aspire to raise a company from failure to one of success-"Only the customer, and the customer alone, will pay our costs and provide our profits" (134), meaning that any company's survival depends almost wholly upon how customers view a company and how that company fulfills its obligations to the customer in the form of great service and in the case of an airline how it provides safe and reliable travel accommodations.