More than one million people fly Virgin Blue each month and last year, despite rising oil prices and competition from other carriers, Virgin Blue posted a profit of $158.5m. Lauren Thomsen-Moore talks to Virgin Blue CEO Brett Godfrey about his role in steering the airline’s customer service strategy and philosophy.
A member of Virgin Blue’s Brisbane Airport Ground Crew developed a new load and trim system for Virgin Blue pilots to use when they complete their paperwork prior to every flight taking off. The previous system was manual and time consuming, so Wayne Bradford took it upon himself to develop a better way.
Virgin Blue trialled it, the pilots loved it, it worked brilliantly and the new system has been part of Virgin Blue’s standard operating procedures pretty much since it launched. This is the sort of initiative that CEO Brett Godfrey believes is at the heart of the organisation.
He says that the philosophy and culture in Virgin Blue welcomes change and new ideas and that some of its best innovations have come from staff suggestions.
This is why we have an open door policy and why the management team get out amongst the frontline staff on a regular basis during our roadshows’.
It gives us the opportunity to see how the operation is working at the grassroots, but it also gives me the opportunity to come face to face with ideas and suggestions as to how we can do things smarter or, if not, then at least more engaging for our staff, he says.
This is one of the reasons Virgin Blue is one of the best known brands in Australia, and was the country’s most reputable firm in 2003 according to Harris Interactive Inc, which measures corporate reputation and addresses the concepts of corporate innovation, sincerity and social responsibility.
Godfrey’s Virgin career began in the early 90s when he moved to the UK to join the hugely successful airline Virgin Atlantic, the premier international carrier based in London, as Finance Manager.
After three years in that role, I moved on to Belgium and my next challenge was when I was hand-picked to represent Virgin’s interests in the acquisition of a new European low fare carrier Virgin Express. I was part of the team that took the airline public in 1997 and was promoted shortly after to the role of CFO.
With Richard Branson and my Deputy CEO, Rob Sherrard, we planned and plotted during 1999, making a surprise announcement in Sydney on November 30, 1999 of Virgin’s intention to become Australia’s newest and freshest airline.
In early 2000, I moved with my wife and children from Brussels to Brisbane and set up Virgin Blue’s headquarters. My team and I have spent the past four years turning the concept into reality and I’m proud that Virgin Blue is now Australia ‘s leading low fare carrier.
According to Godfrey the game plan had always been for Virgin Blue to become one of the world’s leading low fare airlines but the team were always fully aware of the challenges facing them, both in the past and also the ongoing tests associated with one of the world’s most dynamic, competitive and volatile industries.
Every team member, myself included, left secure jobs, and took a significant risk in signing up’. We all knew our mortgages and pay packets were on the line, though this wasn’t the over-riding motivator.
We all had faith in the business plan and a fair dollop of passion to make sure our airline became sustainable. Every day brings new challenges and new opportunities but we are still very focused and committed to both maintaining market relevance and staying true to our low fare/high quality service model.
According to Godfrey, to be successful they had to exhibit unique selling points that were not only low cost, but also exceptionally relevant and desirous to the market. Airline 101 or the me too approach wouldn’t have cut it.
I strongly believe we differentiated ourselves to such a degree that people saw us as a breath of fresh air. I feel our most unique selling point’ differentials are our people and culture, he says.
You can’t go out and buy a can do’ attitude and it is one of our greatest assets. Many of our team members have been with Virgin Blue since the beginning and have a sense of ownership over our airline.
I think it is really important to develop a culture and nurture it long term and that’s something that is difficult to do unless you start from scratch and build up.
Virgin culture is unique worldwide and in Australia , our team, I believe, is more Virgin than Virgin!
Godfrey is quite upfront when it comes to the impact of the Qantas discount airline, Jetstar, on the Virgin Blue game plan. He says the cut-price airline has created very little change to the Virgin Blue game plan.
When we launched in August 2000, we aimed to be the low fare airline leader in the Australian market and we promised never be beaten on price.
Today Virgin Blue is the low fare leader; we still won’t be beaten on price and furthermore we welcome competition because it’s great for all Australians who were held to ransom for airfares before we came along.
If anything, it’s our competition that has had to drastically change its game plan to keep up with Virgin Blue and remain relevant in the market.
If there is one area in which Godfrey has had a big impact on the Australian business scene it is his cool and upfront public style. He is the epitome of a modern business manager.
I’ve often said that the CEO who claims to know all knows nothing. You have to employ people whom you can trust to get the job done. I’m not a chief pilot, but I know a great pilot who is. That has to be the starting premise. I would say that I have a very open style and that I trust people to get on with the job in the way they think is most appropriate.
Godfrey believes there is no point giving people a job to do then following around behind them telling them how to do it.
I think it’s really important to empower people to do their job, to support them in their decisions and to encourage outside the box’ thinking because this is where you can really make a difference. People will make mistakes, just as often as CEOs. Learn from it and move on. Full stop.
And when it comes to the key management skills that have delivered success for Virgin Blue he is equally as focused.
Our airline is different to any other company I have ever known. The team culture is our only long-term competitive advantage; the pride in our modern jet fleet, the way our staff actually care when they ask people how they are, the smiles are genuine. This comes not just from managing people but making sure they have a great working environment and are part of a happy team.
Godfrey believes it comes from recognising when people go above and beyond the call of duty and he believes Virgin Blue people do that every day as part of their normal job.
In his words, he also believes it’s important to get amongst the troops.
I spend a couple of days a month chucking bags, cleaning planes and boarding guests just to get close to the front line. You really see the business and open yourself up to direct access.
Great ideas flow from these roadshows’. Sitting back in your office and being the CEO of the coal mine, you’d expect to find coal go to the coal face and you chance finding diamonds. Don’t always leave it to lieutenants to filter out all the gems put forward by your staff.
There’s not a CEO around who doesn’t at least claim that people are the strength of the organisation. However the secret is ensuring that the staff believe it too…
With Godfrey it is self evident.
I have always advocated that we are in the customer service business, not the airline business. Our people are the front-line team who our guests deal with every time they fly: from the guest contact centre, to the check-in, in-flight and baggage collection. Without the outstanding service, we wouldn’t be where we are today.
You must ensure you keep your staff happy, as a result they are more inclined to keep our guests happy and that keeps the shareholders happy. So it’s a win for everyone.
When it comes to the difference between leadership and management, Godfrey has clear views.
I see leadership as a function of management. Good organisational leadership is relating to people from all departments by keeping in touch with the everyday operation by walking the floor’.
For instance, we have a policy that everyone travelling on duty travel stays back to help the cabin crew clean the aircraft to help get the next flight out on time. No-one is above helping anyone and that’s what true team spirit is all about.
With very few exceptions, I make a point to stay back after every flight and help the crew clean the aircraft. It gets the plane out on time and gets our crew home.
Leaders can’t lead or develop healthy relationships with staff if they want those staff to perform duties they aren’t prepared to do themselves.
Staff have to both know and respect you before they can be properly led by you.
So, where did the desire to run an airline come from? And what is the essential background for the job?
Godfrey says he has had a lifelong interest in aviation and a fascination for aircraft.
But I don’t think it’s an essential requirement to succeed in my role.
I believe the skills needed to be a good CEO cannot be taught at business school. You need to have a healthy determination to succeed, common sense and the ability to communicate with all levels of the business and listen to the ideas of others.
You also need to surround yourself with a capable and reliable team, be prepared to take risks and have the ability to acknowledge and learn from your mistakes. Appropriate training and work experience will obviously enhance these abilities but I truly think these qualities need to be part of your personality from the very start.
When asked if leadership can be taught, Godfrey had some clear views.
I believe that leadership can be improved through experience, be it in the field or in the classroom, but I have no doubt that leadership is an inherent personal characteristic. That it is something that you may or may not have in your makeup.
I do not subscribe to leadership being taught as you must have the potential to lead in the first instance. Some people just wouldn’t make good leaders no matter how much education, conducive environment or intellect.
Leadership is a sub-set of management which, depending on the type of business you run, may not be a strong prerequisite for success, he says.
From my perspective, however, I have learnt my management from trial and error’; which is primarily experience.
Godfrey admits that he graduated from university with a Business degree but not a management focus.
As a result, he feels that his management style and abilities have been developed on the job. And he says a lot of his management knowledge and practices undoubtedly came from working with specialist, highly educated senior managers.
Again, I come back to the concept that smart CEOs often surround themselves with smarter people.
When it comes to the best skill set for a manager, Godfrey believes that ability to be flexible and respond to changing circumstances are key skills.
Being too rigid means you miss out on opportunities and get caught up in the textbook’ way of thinking instead of innovating yourself and the company.
Take fashion, for instance. It changes quicker than rule books, so we’ve thrown out the rules and replaced them with guidelines (safety excepted of course). Guidelines tend to stimulate unique behaviour and original thought, both of which are highly desirous in our industry. Also, I have found [that] too many managers fear delegation.
Godfrey believes insecurity results in managers or supervisors failing to pass on knowledge. He says this insecurity stifles innovation and, although no revelation, is quite unhealthy in any organisation.
Staff feedback policy
At Virgin Blue, we have a 360 degree staff feedback policy, where our managers know where they stand good or bad though mostly they’re pretty bloody good! We try to tell it as it is, but it usually isn’t a surprise because we measure and grade everything that moves or can be counted. Our managers have their own short-term and annual goals which form part of their annual performance agreements and compensation.
A key task for any CEO is to grow and develop a top level management team.
In the case of Godfrey, he says he never set a target to be the biggest airline in Australia .
There is a risk of what next?’ Right through our organisation, we have doers and achievers. We spend a lot of money on recruitment filtering to get it right and I am convinced we usually do. This type of individual needs goals, but, importantly, achievable goals.
Godfrey says setting a priority of world domination in aviation may happen one day, but not any day soon!
As a result, our managers who are used to success must see a mountain that they can climb, so our goals are usually many but attainable such as improving trends in on-time performance, beating budgets, winning an industry award for the first time always seeking to move forward or improve without setting an end game.
So how does the work ethic and goals of Godfrey fit with that larger than life innovator and entrepreneur, Sir Richard Branson?
According to Godfrey, the business plan was put together in the mid-nineties and it was offered to a number of banks and other potential investors.
No one would back our business plan and, in fact, most thought it was fiscal suicide because of the dominance of the incumbents. Richard though, quickly saw and shared our vision and the opportunity it presented.
We wouldn’t be here today if Richard had not backed our team and empowered us with the job in the first place by handing over the cheque to get started. He is a great guy who, thanks to his investment, has done a hell of a lot for Australian tourism, not to mention other industries around the world. He is also a friend to many of our team who is always happy to make time to chat to any staff.
When it comes to his greatest personal achievement, Godfrey is clear. He says, simply, his family.
There is nothing more important to me in the world and they are my greatest achievement. My wife and I get enormous pride in watching our children grow up and work toward and reach their own goals. It’s my natural high.
And Godfrey puts maintaining a work/life balance high on his list of priorities.
It’s critical, though I’m the first to admit it’s hard to maintain, particularly when so much of my time was initially devoted to starting and growing a brand new company.
And what about the future?
We planted the quality, low fare airline seed in Australia when Virgin Blue launched just four years ago. Since that time, the overall industry has gradually had to change and head in the same direction of this new era of flying.
I think, because of this, more and more people are choosing to fly and so demand will increase and there will be certain strategies and innovations we’ll need to employ to cope with this so we can continue to meet the needs of travellers.
Brett Godfrey’s CV
Brett Godfrey was educated at Victoria University in Melbourne where he graduated with honours with a Bachelor of Business Degree. He went on to qualify as a Chartered Accountant with Touche Ross where he also spent time working in the firm’s Canadian office.
The aviation bug bit Godfrey soon after he returned to Australia and he joined Sherrard/National Jet in Melbourne as its Financial Controller. He then went on to join Virgin.