Jan Carlzon

Jan Carlzon (born June 25, 1941) is a Swedish businessman. He is most noted for being Chief Executive Officer of SAS Group from 1981 - 1994.^[1]

Jan Carlzon graduated with an MBA from the Stockholm School of Economics in 1967 and immediately started his career in the international hospitality industry at Vingresor. He rose to the position of President in 1974. In 1978 he joined Linjeflyg, the Swedish national airline, as President before becoming its CEO in 1980. From 1981 he also served as President & CEO of SAS Group, the holding company for the national airlines of Denmark, Norway and Sweden, better known as Scandinavian Airlines System.

Challenges at SAS

At the time when Jan Carlzon took over the at the helm of SAS the company was facing large financial difficulties and losing $17 million per annum^[2] and had an international reputation for always being late. A 1981 survey showed that SAS was ranked no. 14 of 17 airlines in Europe when it came to punctuality. Furthermore, the company had a reputation for being a very centralized organization, where decisions were hard to come by to the detriment of the customers, the shareholders and the staff. He revolutionized the airline industry through an unrelenting focus on customer service quality.

One of the first things Jan Carlzon did at SAS was to introduce the world's first separate cabin for Business Class while at the same time doing away with First Class on its European routes.

Within one year of taking over, SAS had become the most punctual airline in Europe and had started an ongoing training program called Putting People First developed by Claus Møller of Time Manager International ('TMI'). The program was focused on delegating responsibility away from management and allowing customer-facing staff to make decisions to resolve any issues on the spot. Jan Carlzon said at the time: "Problems are solved on the spot, as soon as they arise. No front-line employee has to wait for a supervisor's permission.".^[3] These changes soon impacted the bottom-line as well and the company made a profit of $54 million in 1982.^[2] Several case studies about the turn-around are available and it has been referenced widely in management literature^[4][5]

This decentralisation of the organization led to both a large boost in company morale and the formalization of the training methodology of the program in a joint venture in 1982 with TMI called Scandinavian Service School. Scandinavian Service School since went on to establish offices in all three of the Scandinavian countries as well as Finland and the training program was exported to other hospitality organizations including British Airways and Japan Airlines. The flat organizational structure, delegation processes and empowerment of employees adopted at SAS also led to Carlzon writing a book, Riv Pyramiderna (Swe., which translates into Tear the Pyramids Down), published by Bonnier in Stockholm in 1985 and translated into English in 1987 by Harper Perennial under the title Moments of Truth. The American Management Association, in their 75th anniversary issue of their magazine in 1998 called this one of the most important developments in management of the 20th century.

The changes at SAS led to Air Transport World naming SAS Airline of the Year for 1983 in early 1984.

Carlzon also oversaw a complete corporate identity re-design, a process which was marred when a journalist gained unlawful access to a hangar with a plane painted in a proposed livery was photographed and widely published in Scandinavian newspapers. Unfortunately, either the brief to the agency, Landor Associates, was not good enough or they had misunderstood it and painted the plane with 5 crowns to symbolize the 5 Nordic countries. This caused a huge public furore as SAS only contains the airlines of the three monarchies Denmark, Norway and Sweden. Incidentally, the other two Nordic countries Finland and Iceland are both republics and would therefore not be represented by crowns. The task of re-developing the corporate identity was later given to another firm.

In the latter years of Carlzon's tenure at SAS he was coming under increased pressure from shareholders as competitors had caught up with the lead established by SAS in the business market in the early 1980s. At the same time increasing oil prices and a less than profitable first class operation led to SAS scrapping First Class on its intercontinental routes and retiring its Boeing 747s in 1989 . SAS has never since flown aircraft with as large a capacity as it does not believe the flights would be profitable.

After SAS

Carlzon left SAS in November 1993 and founded the investment company Ledstiernan in 1994 where he was chairman. Carlzon was also one of the founders of the Internet retail company CDON. In 1999 he became chair of the Swedish Tennis Association and a board member in the International Tennis Federation. He served as chair of the British Swedish Chamber of Commerce between 2003 and 2006 ^{[6] [7]} and, until June 2010, he chaired the MARSHMALLOW entrepreneurs' organization Företagarna.^[8] He was also one of the founders of European telecoms company NETnet International S.A. and is part owner and chair of Karl Stockman AB, a Swedish investment company.

Quotes

• "We have 50,000 moments of truth every day." - said at the start of the First Wave seminars to turn SAS around in 1982 and referring to every time an employee of the company came into contact with a customer.^[9]
• "An individual without information can't take responsibility. An individual with information can't help but take responsibility."^[10]
• "I learned that, before you reach an objective, you must be ready with a new one, and you must start to communicate it to the organization. But it is not the goal itself that is important."^[10]
• "Mistakes can usually be corrected later; the time that is lost in not making a decision can never be retrieved”.^[11]
• "... the right to make mistakes is not equivalent to the right to be incompetent, especially not as a manager."^[12]

Honors and awards

• Honorary doctorate from Pepperdine University
• Honorary doctorate from Pacific Lutheran University
• Commander with Star of the Royal Norwegian order of Merit
• Awarded H.M. the King of Sweden's medal of the 12th dimension with the ribbon of the order of the Seraphim
• Fellowship in the Norwegian Academy of Technological Sciences.^[13]

References