I follow news on travel technology, but as a newcomer to the industry I definitely lack some knowledge on its history. That's what I thought about when discovered Wayblazer (see TLabs here) and tried to get into the details about its founders. Amazingly, that was the 1st time when I learnt about Terell Jones and his tremendous сontribution to online travel technology. I've also discovered his book "ON Innovation" and felt that I can't miss it (being VP Innovations myself). While reading the book, I've decided to turn some of my notes into a collection of quotes that I've divided into 3 parts - useful insights, pieces about travel technology history (I tried to define "chronological order" in this part) that are also useful examples of how innovation is done, of course, and just some short inspirational quotes. Oh, and there's one funny story too. :)
These quotes are not "the best part of the book" or something like it. These are just insights that are valuable for the company that is on the same growth stage on which Excursiopedia is at the moment (for example, I've almost missed the part about innovation in huge corporartions that might be extremely valuable for those who work in big companies). And, well, it's about online travel - industry in which I am working for the past 3 years and which I am really keen about, so everything is quite personal here.
All credit goes to Terell Jones, online travel pioneer who founded Travelocity and Kayak.com, and continues to work on the front edge of travel technology with his new project Wayblazer (btw, you might find "traces" of Wayblazer idea in the book if you read carefully).
Part 1. Useful Insights
[On supporting ideas from employees]
"It is important to remember that as you “motor” through your company—holding meetings, speaking to colleagues, giving presentations—you leave a big wake behind you. That wake consists of what you say and, even more importantly, how you say it. Employees have very sensitive antennae that detect (or think they detect) the hidden meaning behind everything you say. Their perception of your true intentions is what shapes their actions. Do you support, amplify, and endorse new ideas? Or, more often, do you find yourself minimizing, sidelining, and playing “devil’s advocate”? In your own mind, you see this as looking at new ideas from all angles to ensure their viability. But from your employees’ point of view, it may seem you always shoot down what they say. What you and your managers say, every day, matters a lot".
[3 quotes on listening to customers]
"Can you build sensors into your business to understand what your customers want next? Analyze search terms to identify what people are looking for related to your core products and services. Then, identify what doesn’t show up on your website. If a lot of people want something related to your area of expertise and they can’t find it on your website, that’s a red-flag measure of unmet need".
"At Travelocity I put a British phone booth in the main hall. If you picked up the phone, you could listen in on customer service calls. Every person in the company, from the guy in the mail room to me, had to listen to two customer service calls a month and then have ideas for these two questions at the next staff meeting".
"Kayak.com is a search company. Like Google, we don’t take phone calls, but we do get e-mails. Lots of e-mails. Our CTO, Paul English, determined it would be smart to send those e-mails to our programmers instead of creating a customer service department".
[Getting "insiders' insights"]
"Salesforce.com’s Chatter is helping many companies toss questions out to their internal experts (and experts they might not even know they have) to quickly find answers to dilemmas. You already have experts such as these in your company. The trick is to deploy the software so you can use them to innovate in ways you never imagined. Turn your experts into innovators!"
[On switching employees' positions]
"The head of marketing was constantly complaining about delays and bad analysis with our CRM system. I got fed up and put him in charge of the system and gave him control of the programmers and data analysts. I also told him he’d also have to learn to serve the rest of the company, as he was not the only customer of CRM. It worked. He shortened feedback loops, decreased time to market, and increased experimentation, which increased overall effectiveness".
[On idea incentives]
"At American Airlines, we had an idea program where employees were paid for ideas based either on the revenue created or expenses that were actually taken out of budget as a result (as determined by a management committee). As in an incentive program, the employees selected “gifts” from a catalog. I can testify that incentives work, as my wife got a mink coat out of her idea! And I approved hundreds of thousands of dollars in gifts from ideas that saved us millions".
[On quick innovation testing (Travelocity way)]
"So we did two things. First, we created a Quick Hits group that worked on any good idea that took under six weeks to deliver. This solved a problem I used to have at AA. My boss there was convinced that big projects had more value than small ones. I didn’t (and don’t) believe this was necessarily true. Customers don’t care how much effort or time you put into a new feature; they only care what it does for them. Creating this Quick Hits team allowed us to get a steady flow of new features into the customers’ hands. I’m convinced that a continuous pipeline of improvements is a beautiful thing that pays off for all involved in, and around, a company. In addition, I hired two programmers to work directly for me. Their sole responsibility was to take my ideas and build prototypes quickly that we could then test on the website. As covered in our previous section, you can get almost instant feedback on your ideas online, and that we received!"
[On waiting for the right time for innovation]
"I’ve now come to believe that visionary projects that don’t make it the first time should be reviewed every six to twelve months to see if the world has caught up with them. Perhaps the second or third time around, they will have evolved into an “idea whose time has come.”
[And on shipping at the right time]
"Ship before your innovation becomes old hat or before circumstances change and render you obsolete before you start. Create your own external force if you need to, but put your idea on the line and ship. It is the only way your idea will become a reality and turn into an innovation that makes a “dent in the universe.”
Part 2. Online Travel History
[How Travelocity started]
"We had a similar fear problem at Travelocity. When we started its predecessor, EAASY SABRE, we knew travel agents would be concerned about an online booking product. So, our first iteration of the system allowed customers to make a reservation, but they had to send it to a travel agent to issue the ticket. Since AOL and others were paying SABRE for providing the system, we even paid the agents a small incentive ($5) to service the booking (in addition to the commission that the
airlines paid them for ticketing). This worked for a while. But the agents really didn’t grab on to the system. The bookings showed up in an obscure electronic file they never looked at. And as they didn’t know these new customers and were busy on the phone with existing business, many times they just ignored the online reservations. Unfortunately, those online bookings expired, and were cancelled, as they weren’t ticketed. Customers were understandably upset. When we started Travelocity and moved to the Internet, we knew the problem would be even bigger, so we created our own travel agency and gave the customer the choice of booking with us or with their local agent. The travel agent trade press thundered against us, but agents still were mostly unconcerned. Finally, in the interest of providing the best possible service, we eliminated the travel agency option and only issued tickets ourselves".
[How Travelocity was launched]
"Travelocity launched with four buttons on the home page: Reservations, Destinations, Points of View, and Merchandise. We thought that was what people would want to accomplish: browse destinations, read critical reviews of potential locations, make a booking, and perhaps buy a suitcase or a travel item. We could not have been more wrong. The only thing customers wanted to do was to make a reservation. Travelocity was at the time a joint venture with the company providing the destination information. We had to negotiate our way out of that deal, buy the URL from them, and completely change the layout of the site to reflect what the customer wanted. We kept to our core proposition but rejected all the rest, and quickly".
[On Expedia launch of dynamic packaging]
"This employee was at Expedia. His idea was to allow customers to package air, car, and hotel together into a “dynamic package” and receive a discount. The new wrinkle was customers would receive the same types of discounts they could get on preplanned tours, but they got to select the components themselves instead of it being done for them. This guy presented his idea to Expedia’s president. He admitted it would cost a lot of money, take a long time, and there was no data to prove it would pay off. But he was convinced this was the next new thing, that it would be a revenue jackpot, and that it was important to get there first. It took a year for this visionary (let’s give him his due) to convince executives at Expedia they should try it, and many additional months to create the new option and make it real. However, when they did put this new option in play, Expedia doubled their sales in two quarters. They passed Travelocity like we were stopped. We never caught up. One guy. Just like the one guy who wouldn’t give up at 3M and finally created the Post-it Note".
[What happened when Sabre bought Travelocity back (after it has been public for some time)]
"As the time to close the deal approached, I called the chairman and said, “I need your help. The way the executive employment contracts are written, the leaders have to leave the company if they want to get paid for their stock options. These options are big money to them, and I believe they all will quit to get paid. We should find a way around this clause.” “Well, I just don’t think we can do that,” he retorted. “It would not be fair to those executives at SABRE who won’t get such a payout.” I was incredulous. “Hang on a minute. If you do this, you will have just paid $500 million to buy back the company and not have the executives in place to run it!” He replied that he thought they could handle it with promotions and transfers, and that my plan “just would not be fair to the SABRE guys.” I pointed out that “the SABRE guys” had not created $2 billion in value, but to no avail! Although he said I could stay, almost all of us left. At this critical juncture, Travelocity got entirely new management and, frankly, hit quite a speed bump in growth".
[How Kayak.com was founded]
"Kayak.com was founded after a discussion between the founders of Travelocity, Expedia, and Orbitz. We wondered what to do with all the visitors who searched us to find the right price and then went directly to the vendor (American, Hilton) to buy. We thought, there has to be a better way. And there was. We simply built a site where customers could search everything they wanted and then buy directly from their supplier of choice. Kayak is (not unlike the examples above) a change to one part of the travel business model".
Side note: you might find some insights about online travel history in my paper on online travel M&A deals (includes few words on Travelocity history too)
Part 3. Short Pieces of Wisdom
- There is absolutely a time and place to focus efforts. But if the goal is to inspire employees to be more innovative, a few “hair burning” days might be in order.
- I often hear entrepreneurs talk about how many friends their company has on Facebook, how many followers they have on Twitter. I want to ask them, “Are you using them for innovation?”
- Want the best ideas to make it through the gauntlet? Make sure they get a wide review.
- Fear of new ideas has been around as long as new ideas have. Which is why minimizing fear is part of the job description of any innovative leader.
- They think innovation is a “right-brained” art, not a “left-brained science.” Actually, it’s both. And anyone can do it.
Funny Story on Trying to Prevent All Possible Risks
"When it became clear that computer uptime was essential for running a modern airline, American wanted the safest computer center ever built. So it was buried deep underground, there were backup generators, power from two separate grids, banks of batteries. To enter, you were required to both have a retina scan and be weighed on a scale (to make sure you didn’t steal anything). There was even a massive ice storage machine to continue to cool the computers if the chillers failed.
Disaster struck when a raccoon entered through a small duct, crawled deep into the center, and ate a critical control wire…crashing the entire system. You can’t plan for everything".
That's all I wanted to write (and to quote). I hope that this writing will make you get to Amazon to get Terell's book (I got Kindle version, but now think about getting paperback one too) and to use it for your daily innovation activities. :)
To sum this up I want to put one last quote from the book here:
No more reasons why you didn’t follow up on your idea. Just do it. ( Tweet )
P.S. Check out some of my writings on online travel here.