In his nearly seven years as CEO of Air New Zealand, Rob Fyfe made sure he answered each email personally, even the most difficult customer complaints.

Some of the emails were "colourful", says Fyfe, but he remembers one particular comment from a customer who complained about how his flights were always delayed.

"You service is lower than a snake's scrotum," the customer wrote.

Fyfe says he may not be that familiar with snakes' anatomy, but the sentiments of the email were still clear. He apologised to the sender and explained the delay was due to a system that was critical to flight safety and the pilot certainly did make the right decision in this instance. He also stated that the airline has the best on-time performance in the region, with close to 90 percent of flights taking off within 15 minutes of the scheduled departure time.

The sender offered him two bottles of his best French Bordeaux for a wager that his next two flights will be delayed. Fyfe matched it with six bottles of the wine the airline serves in business class.

Fyfe won the wager, and when the sender asked him how enjoyed the wine, the CEO said he would like to share it with all of those responsible for ensuring the planes left on time but it would be like "having communion".

Instead he offered to auction it off for Koru Care, a charity that organises trips for seriously ill and disabled children. In response, the customer sent more bottles of Grange to be auctioned off for the charity.

The lesson from this?

"Don't shy away from a complaint; engage with the complainant, figure out what the problem is and how you can restore their confidence," says Fyfe, who related this incident at the recent CIO Leaders' Luncheon in Auckland, sponsored by Fronde.

Related: In pictures: CIO Leaders' Luncheon featuring Rob Fyfe: Insights from a CEO-plus on customer engagement

Fyfe says he included this experience in his weekly email to Air New Zealand's 11,000 staff.

He says he shared such stories with the airline employees because he wanted these to become a reference point and a guide for what people did throughout the organisation.

Related: CEO-plus For Rob Fyfe, innovation and risk management go hand in hand, and he shares how this was demonstrated during his term as CIO and then chief executive at Air New Zealand.

At the CIO luncheon, Fyfe also talks about the value of getting first-hand account on what is happening in various business units.

Once a month, Fyfe would ask an employee to come and spend the day with him to see what his job was about. "Those experiences allowed people to see the trade-offs we have to make, the toughest of decisions," says Fyfe. He says they always chose people who they were confident will go back and share that experience with their colleagues.

Fyfe also worked in different areas of the business, including being a flight attendant and a baggage handler. He once worked the night shift at the Nelson hangar, donning overalls and helping to change brakes and tires. "Within an hour, they were interacting with you like you were one of them," says Fyfe. "You're no longer CEO, and you build long-term relationships."

"I could pick up the phone to anywhere in the organisation and talk to these people that I'd worked alongside for a day," he says. He would ask them about how the people felt about an issue or "what the vibe is" in that part of the organisation.

"You get really genuine unfiltered feedback... that was incredibly valuable."

Focus on people

"My leadership philosophy over the last three decades has been an unwavering belief that business success is essentially all about people," says Fyfe, who was CEO at the airline from 2005 to 2012, and had also been its CIO. He is executive chairman at Icebreaker and is on the board of Antarctica New Zealand.

"In my experience a highly motivated community of people working cohesively towards a common goal with a shared sense of purpose... will almost always outperform an opposition focused primarily on the bottom line, on financial ratios, and technical superiority," he says.

"We were never going to be able to create a competitive advantage through purely managing the financial metrics. We just didn't have the scale, and the airline business is a scale business.

"By trying to understand better who our customers were and how we could offer a better and more compelling service to our customers [we could] actually win by attracting more customers to fly on an airline and ensure we had fuller aircraft rather than trying to win through having a lower cost base, or some other miraculous way [of increasing] our revenue."

Following a survey of some 1000 customers, the airline distilled characteristics of New Zealand that they would like to bring on board. "If we can bring that personality to life inside Air New Zealand, then we can start to make the airline an added value rather than a barrier that you have to pass through before you get to start enjoying your holiday." The airline sought to bring that "personality" through everything in the business, from the IT team, to what goes on board with the aircraft, engineering and baggage handlers.

While the concept might not sound like a big breakthrough, he says, the airline industry was traditionally about planes, not people.

"Everyone spends their time figuring out which planes to fly, where to fly the planes, how much to charge for a seat. The heroes in the airline industry are the people that deal with the planes -- the pilots, the engineers, [they hold] the 'sexy jobs'."

So it is actually turning the business around when Air New Zealand says the airline "is about people, not planes".

This makes the airline heroes "different", he says, and they now include the flight attendants and staff at the check-in counter.

"The people who interface with the customers are the ones that are going to have the biggest impact to our customers," he says. "These people need to be supported throughout the organisation."

"When the door of an aircraft closes and the flight takes off, it is a bit like the rugby team running onto the field.

"What happens to your team in the field is up to the team or players and how they draw from what you have instilled in them. They are not going to give me a call and ask how to deal with any of those situations."

Taking a stand

He recalls another "colourful" email that contained a lot of unsavoury words that required being abbreviated into 'effing' when he read it.

Fyfe responded to the sender, saying "it embarrasses me that someone purporting to be a fellow New Zealander would engage with anyone in such a fashion."

He says after the series of exchanges, where he also explained the airline's side on the issues raised, the passenger became a "surprisingly loyal customer" and sent him regular feedback on how great his experiences were on Air New Zealand.

The adage in the service industry is that the customer is always right, says Fyfe. But "when you engage with people on this notion of 'welcoming everyone as a friend', to some degree it cuts both ways".

"If people are going to be either physically or verbally or emotionally abusive of our staff, they need to know that in our culture and our organisation, that's not acceptable. And I've got tremendous feedback from employees for the fact that we were prepared to take a stand," says Fyfe.

Two or three times a year, he says, "we'd divorce one of our customers, but you don't want to do it too often".

Online tools a double-edged sword

Ian Clarke, CEO of Fronde, says the same tools that help improve the customer experience are also available to the competition, so these are not the ones that make the difference to the public.

In fact, he says, some of the tools -- Internet, social networks and mobile -- "can be rapidly turned against you by disgruntled clients, increasing the impact poor customer experience can have on your business."

At the same time, customers use these online tools to get very detailed and immediate comparison to offerings and pricing across competing companies.

"The really competitive position your business can rely on is what your brand stands for and how you deliver on that promise," says Clarke, echoing Rob Fyfe's message on forging a customer-centric culture.

Rob Fyfe and Ian Clarke spoke at the CIO Leaders' Luncheon on 'Customer engagement insights from a CEO-plus' sponsored by Fronde.

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