4. SIA’s organizational activity system
The five pillars of SIA’s organizational activity system, described
below, are rigorous service design and development, total
innovation, profit consciousness ingrained in all employees,
achieving strategic synergies, and developing staff holistically.
4.1. Rigorous service design and development
Almost two and a half decades ago, services marketing professor
Lyn Shostack (1984) noted that service design and development
were characterised by trial and error rather than by a structured
process as was the case in manufacturing. Things appear to have
changed little since then for most service organizations. SIA
however views product design and development as a serious,
structured effort. SIA’s initial commitment to exceptional levels of
service and innovation begun in 1972, when, after its separation
from Malaysian Airlines, it chose not to be a member of IATA, whose
rules SIA considered too constraining.
SIA has a Service Development department that hones and
thoroughly tests any change before it is introduced. This department
undertakes research, trials, time and motion studies, mockups,
assessing customer reaction; to ensure that a service innovation
is supported by the appropriate procedures. Underpinning the
continuous innovation is a corporate culture that accepts change
and development as not just inevitable, but as a way of life;
a cultural element that is also inculcated at the national level by
Singapore’s government. A trial that fails or an implemented
innovation that is removed after a few months is acceptable, and
damages no-one’s reputation.
At SIA it is expected that any innovation may have a limited shelf
life. SIA recognises that to sustain its differentiation, it must
maintain continuous improvement, and be able to dispose of
programs or services that no longer provide competitive differentiation
or that could be offered in a different way. According to SIA’s
senior management, ‘‘It is getting more and more difficult to
differentiate ourselves because every airline is doing the same
thing . the crucial fact is that we continue to say that we want to
improve. That we have the will to do so. And that every time we
reach a goal, we always say that we got to find a new mountain or
hill to climb . you must be able to give up what you love’’ (Yap Kim
Wah).
The stakes are raised for SIA, not only by its competitors but also
by its customers, who have sky-high expectations: ‘‘Customers
adjust their expectations according to the brand image. When you
fly on a good brand, like SIA, your expectations are already skyhigh.
And if SIA gives anything that is just OK, it is just not good
enough.’’ (Sim Kay Wee). Combined with its extensive customer
feedback mechanisms, SIA treats its customers’ high expectations
as a fundamental resource for innovation ideas. Weak signals are
amplified; every customer letter, be it complaint or compliment,
creates a reaction within the airline. There is also a program called
‘‘SIA’’, for ‘‘staff ideas in action’’, where staff can propose any ideas
they have that would improve service or cut costs. Additional
sources of intelligence are the IATA, Global Airline Performance
(GAP) survey, and SIA’s ‘‘spy flights’’, where individuals travel with
competitors and report detailed intelligence on competitive
offerings.
Lastly, SIA recognises that its competition does not just come
from within the industry. Instead of aiming to be the best airline its
intention is to be the best service organization. To achieve that, SIA
employs broad benchmarking not just against its main competitors,
but against the best-in-class service companies.