Institute for Simplicity

Peter Drucker said:

“Concentration is the key to economic results. No other principle of effectiveness is violated as constantly today as this basic principle of concentration.”

Lufthansa just announced that now you can also collect miles when you take a taxi. Jens Holzer, Director Partnermanagement Retail & Lifestyle of Lufthansa Miles & More is more than happy about the cooperation: „Finally we can offer the opportunity to our customers to collect miles through the whole chain of travel. Starting with the flight and rental car, and eventually with myTaxi trips. Most of our customers are business people. For those this additional option to collect miles is perfect.

What are we observing?

Today, Lufthansa has huge problems to keep up with low cost / low fares airlines in Europe or Emirates and others from abroad. Customers of Lufthansa are more and more unsatisfied with poor service, missing comfort, old interior which is not working properly, and on the other side expensive offers. Despite an incredibly perfect Miles & More Program – the Lufthansa results are not getting better.

What do we think about it?

Lufthansa has lost focus and has not any clue any more what is essential. In large advertisements Lufthansa announces the new Terminal A-plus in Frankfurt. It is supposed to be a great place for Shopping. Shopping? The key questions is not being answered: “Why should the customer fly with me?” There is a lot of “nice to have” and little important. Lufthansa prefers to do a little bit of everything instead of concentration on its products.

Now, we can take the myTaxi from the airport and collect – let´s say – 30 miles with Lufthansa. This can be irrelevant to the customer as well as to Lufthansa. For a bonus flight from Düsseldorf to Hamburg you need 1000 taxi rides like that. What is essential?

Our assumption:

If Lufthansa concentrates on the essentials every day and forgets about everything else, there would not be any of today´s huge problems.

Let us take an example: The European Agency for Flight Security plans for 2013 to allow pilots to fly and work more hours: Does this mean that safety is still guaranteed the same way as today. It has been a proof that tiredness of the crew in the cockpit is an important reason for plane crashes. What does the new regulation mean for Lufthansa and its core product which is flying thousands of customers daily? A reaction of Lufthansa could be: “Lufthansa pilots will still work only a maximum number of x hours. No matter what the new regulation says. Pilots now could fly more. But we consider safety still the major factor when flying our customers to their destinations. We will make sure that being tired because of long working shifts never becomes a problem of safety. We prefer to become the safest airlines instead of only one of the cheap ones. “

Our view: Lufthansa is not an airline any longer. That was in the past. Lufthansa is an agency for collecting and spending miles. And a staff department has been promoted to the position of Vice President in the organisation (check what Peter Drucker said about staff departments!). It is about bonus flights and free coffee machines by taking taxis and buying socks and underwear.

Simplicity – it is about the Essential!