Jan Carlzon
Encyclopedia
Jan Carlzon is a Swedish
businessman. He is most noted for being Chief Executive Officer
of SAS Group
from 1981 - 1994.
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.
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 Business class
.
Within one year of taking over, SAS had become the most punctual airline in Europe SAS Group
and had started an on-going 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.". These changes soon impacted the bottom-line as well and the company made a profit of $54 million in 1982. Several case studies about the turn-around are available and it has been referenced widely in management literature
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 republic
s 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 747
s in 1989 http://www.iht.com/articles/1993/02/05/freq.php. SAS has never since flown aircraft with as large a capacity as it does not believe the flights would be profitable.
retail company CDON
. In 1999 he became chair of the Swedish Tennis Association and a board member in the International Tennis Federation
. He has been chair of the British Swedish Chamber of Commerce since 2003 and, until June 2010, he chaired the MARSHMALLOW entrepreneurs' organization Företagarna. 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.
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....
businessman. He is most noted for being Chief Executive Officer
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
of SAS Group
SAS Group
Scandinavian Airlines System Aktiebolag , trading as SAS Group and SAS AB, is a holding company based in Solna, Sweden. It is the parent company of the airlines Scandinavian Airlines, Blue1 and Widerøe, and the aviation services companies SAS Business Opportunities, SAS Cargo Group, SAS Ground...
from 1981 - 1994.
Jan Carlzon graduated with an MBA from the Stockholm School of Economics
Stockholm School of Economics
The Stockholm School of Economics or Handelshögskolan i Stockholm is one of Northern Europe's leading business schools. Its Masters in Management program is ranked no. 2 in Northern Europe and no. 13 in Europe by the Financial Times...
in 1967 and immediately started his career in the international hospitality industry
Hospitality industry
The hospitality industry consists of broad category of fields within the service industry that includes lodging, restaurants, event planning, theme parks, transportation, cruise line, and additional fields within the tourism industry. The hospitality industry is a several billion dollar industry...
at Vingresor. He rose to the position of President in 1974. In 1978 he joined Linjeflyg
Linjeflyg
Linjeflyg was formed in 1957 as a Swedish domestic airline by Scandinavian Airlines System, Dagens Nyheter AB and Stockholms-Tidningen AB.In October 1983, Linjeflyg moved from Stockholm-Bromma Airport in the central part of Stockholm, to Stockholm-Arlanda Airport in the north of Stockholm. Bromma...
, the Swedish national airline, as President before becoming its CEO in 1980. From 1981 he also served as President & CEO of SAS Group
SAS Group
Scandinavian Airlines System Aktiebolag , trading as SAS Group and SAS AB, is a holding company based in Solna, Sweden. It is the parent company of the airlines Scandinavian Airlines, Blue1 and Widerøe, and the aviation services companies SAS Business Opportunities, SAS Cargo Group, SAS Ground...
, the holding company for the national airlines of Denmark
Denmark
Denmark is a Scandinavian country in Northern Europe. The countries of Denmark and Greenland, as well as the Faroe Islands, constitute the Kingdom of Denmark . It is the southernmost of the Nordic countries, southwest of Sweden and south of Norway, and bordered to the south by Germany. Denmark...
, Norway
Norway
Norway , officially the Kingdom of Norway, is a Nordic unitary constitutional monarchy whose territory comprises the western portion of the Scandinavian Peninsula, Jan Mayen, and the Arctic archipelago of Svalbard and Bouvet Island. Norway has a total area of and a population of about 4.9 million...
and Sweden
Sweden
Sweden , officially the Kingdom of Sweden , is a Nordic country on the Scandinavian Peninsula in Northern Europe. Sweden borders with Norway and Finland and is connected to Denmark by a bridge-tunnel across the Öresund....
, better known as Scandinavian Airlines System.
Challenges at SAS
At the time when Jan Carlzon took over the at the helm of SAS, he hated life and was almost suicidal. The company was facing large financial difficulties and losing $17 million per annum 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
Business class
Business class is a travel class available on many commercial airlines and rail lines, known by brand names which vary by airline or rail company. In the airline industry, it was originally intended as an intermediate level of service between economy class and first class, but many airlines now...
while at the same time doing away with First Class
First class (aviation)
First class is a luxury travel class on some airliners that exceeds business class, premium economy, and economy class. On a passenger jetliner, first class refers to a limited number of seats or cabins located in the front of the aircraft which are notable for their comfort, service, and privacy...
on its European routes Business class
Business class
Business class is a travel class available on many commercial airlines and rail lines, known by brand names which vary by airline or rail company. In the airline industry, it was originally intended as an intermediate level of service between economy class and first class, but many airlines now...
.
Within one year of taking over, SAS had become the most punctual airline in Europe SAS Group
SAS Group
Scandinavian Airlines System Aktiebolag , trading as SAS Group and SAS AB, is a holding company based in Solna, Sweden. It is the parent company of the airlines Scandinavian Airlines, Blue1 and Widerøe, and the aviation services companies SAS Business Opportunities, SAS Cargo Group, SAS Ground...
and had started an on-going 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.". These changes soon impacted the bottom-line as well and the company made a profit of $54 million in 1982. Several case studies about the turn-around are available and it has been referenced widely in management literature
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
Joint venture
A joint venture is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets...
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
British Airways
British Airways is the flag carrier airline of the United Kingdom, based in Waterside, near its main hub at London Heathrow Airport. British Airways is the largest airline in the UK based on fleet size, international flights and international destinations...
and Japan Airlines
Japan Airlines
is an airline headquartered in Shinagawa, Tokyo, Japan. It is the flag carrier of Japan and its main hubs are Tokyo's Narita International Airport and Tokyo International Airport , as well as Nagoya's Chūbu Centrair International Airport and Osaka's Kansai International Airport...
. 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
Stockholm
Stockholm is the capital and the largest city of Sweden and constitutes the most populated urban area in Scandinavia. Stockholm is the most populous city in Sweden, with a population of 851,155 in the municipality , 1.37 million in the urban area , and around 2.1 million in the metropolitan area...
in 1985 and translated into English
English language
English is a West Germanic language that arose in the Anglo-Saxon kingdoms of England and spread into what was to become south-east Scotland under the influence of the Anglian medieval kingdom of Northumbria...
in 1987 by Harper Perennial
Harper Perennial
Harper Perennial is a paperback imprint of the publishing house HarperCollins Publishers. Harper Perennial has divisions located in New York, London, Toronto, and Sydney. The imprint is descended from the Perennial Library imprint founded by Harper & Row in 1964...
under the title Moments of Truth. The American Management Association
American Management Association
The American Management Association , based in New York City, is a corporate training and consulting group that provides a variety of educational and management development services to businesses, government agencies and individuals. The non-profit membership organization offers business courses in...
, 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
Air Transport World
Air Transport World is a monthly trade magazine covering the airline industry published by Penton Media. They also provide an online version with daily air transport news. The publication covers airline operations, market conditions, management, and related issues...
naming SAS Airline of the Year for 1983 in early 1984.
Carlzon also oversaw a complete corporate identity
Corporate identity
In Corporate Communications, a corporate identity is the "persona" of a corporation which is designed to accord with and facilitate the attainment of business objectives...
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
Landor Associates
Landor Associates is a San Francisco-based brand and creative design consultancy. Founded by Walter Landor and his wife Josephine in 1941, Landor pioneered many of the research, design and consulting methodologies that are now standard in the branding industry.-Operations:Landor offers brand...
, was not good enough or they had misunderstood it and painted the plane with 5 crowns to symbolize the 5 Nordic countries
Nordic countries
The Nordic countries make up a region in Northern Europe and the North Atlantic which consists of Denmark, Finland, Iceland, Norway and Sweden and their associated territories, the Faroe Islands, Greenland and Åland...
. 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
Finland
Finland , officially the Republic of Finland, is a Nordic country situated in the Fennoscandian region of Northern Europe. It is bordered by Sweden in the west, Norway in the north and Russia in the east, while Estonia lies to its south across the Gulf of Finland.Around 5.4 million people reside...
and Iceland
Iceland
Iceland , described as the Republic of Iceland, is a Nordic and European island country in the North Atlantic Ocean, on the Mid-Atlantic Ridge. Iceland also refers to the main island of the country, which contains almost all the population and almost all the land area. The country has a population...
are both republic
Republic
A republic is a form of government in which the people, or some significant portion of them, have supreme control over the government and where offices of state are elected or chosen by elected people. In modern times, a common simplified definition of a republic is a government where the head of...
s 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 747
Boeing 747
The Boeing 747 is a wide-body commercial airliner and cargo transport, often referred to by its original nickname, Jumbo Jet, or Queen of the Skies. It is among the world's most recognizable aircraft, and was the first wide-body ever produced...
s in 1989 http://www.iht.com/articles/1993/02/05/freq.php. 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 InternetInternet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...
retail company CDON
CDON
Cell adhesion molecule-related/down-regulated by oncogenes is a protein that in humans is encoded by the CDON gene.-Interactions:CDON has been shown to interact with CDH1 and BOC.-Further reading:...
. In 1999 he became chair of the Swedish Tennis Association and a board member in the International Tennis Federation
International Tennis Federation
The International Tennis Federation is the governing body of world tennis, made up of 205 national tennis associations.It was established as the International Lawn Tennis Federation by 12 national associations meeting at a conference in Paris, France on 1 March 1913...
. He has been chair of the British Swedish Chamber of Commerce since 2003 and, until June 2010, he chaired the MARSHMALLOW entrepreneurs' organization Företagarna. 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.
- "An individual without information can't take responsibility. An individual with information can't help but take responsibility."
- "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."
- "Mistakes can usually be corrected later; the time that is lost in not making a decision can never be retrieved”.
- "... the right to make mistakes is not equivalent to the right to be incompetent, especially not as a manager."
Honors and awards
- Honorary doctorate from Pepperdine UniversityPepperdine UniversityPepperdine University is an independent, private, medium-sized university affiliated with the Churches of Christ. The university's campus overlooking the Pacific Ocean in unincorporated Los Angeles County, California, United States, near Malibu, is the location for Seaver College, the School of...
- Honorary doctorate from Pacific Lutheran UniversityPacific Lutheran UniversityPacific Lutheran University is located in Parkland, a suburb of Tacoma, Washington. In September 2009, PLU had a student population of 3,582 and approximately 280 full-time faculty...
- 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