Rob has led iconic businesses such as Air New Zealand and Icebreaker as CEO, and serves on the board of directors of Michael Hill and Air Canada. He talks innovation and leadership with Unfiltered co-founder and CEO, Jake Millar.
As the co-founder and CEO of Unfiltered, I’ve had the opportunity to interview over 300 business leaders around the world. One interview that had a significant impact on me, and how I think about leadership and innovation, was Rob Fyfe. As the former CEO of Air New Zealand and Icebreaker, Rob is widely respected for his people-centric leadership style and willingness to take risks and innovate, all things I have tried to integrate into the way I run Unfiltered.
Jake: What is one of the most transformative business experiences you’ve been through?
Rob: Before joining Air New Zealand in 2003, I was managing director of a business in the United Kingdom called ITV Digital that went into receivership. Being part of an organisation that fails is pretty humbling. I’d been brought in to see whether the business could be saved, and I failed. I learned a lot from that, both good and bad. It shaped how I approached the next decade of my career.
Jake: What was one of the key lessons you learnt?
Rob: I announced that we were going into receivership to the 500 staff at our head office. Then, as you do in England, we all headed down to the pub to reflect on the meaning of life. What struck me was the number of employees who said, “Even if I’d known this was the outcome, I still would have wanted to be part of this journey.” It taught me that you can create a really positive environment even in the toughest of business circumstances, by treating people well, and creating the right opportunities for them. If you can do that, irrespective of tough decisions made along the way, you’ll still have respect, despite how personally challenging it is for those involved.
Jake: What lessons did you take from that experience to your next role?
Rob: I’d learnt lots about openness and transparency, and how much emotion you allow into the workplace. I think a lot of leaders choose to lead in a very objective and often emotionless way. I found through the receivership situation that being transparent, open and genuine about how I was feeling, helped people to realise that we were all experiencing the same issues and emotions. Like everyone else, I was about to be made redundant. I brought that emotional transparency with me to Air New Zealand. It strongly guided how I led.
Jake: You were at Burnside High in Christchurch with the ex-Prime Minister, John Key. Was it just before or just after?
Rob: I was a year ahead of John Key at school. So I was his senior. [laughs]
Jake: Were you seen as a leader when you were at school?
Rob: I don’t know if people ever saw me as a leader at school, but I did have the ability to relate to anyone. I had friends who ended up in gangs, in rugby teams, and in the debating club. I was able to move comfortably through a whole range of different groups at school. That ability to relate to all sorts of people, and see them all as my peers, formed at a very early stage in my life.
Jake: Let’s talk about innovation. Under your leadership at Air New Zealand, innovation become the lifeblood of what the company was and still is today. Why is innovation in business so important?
Rob: If you don’t change and innovate, then the market moves away from you and you get left behind. Two things matter around innovation: you have to be able to accept risk because innovation itself doesn’t guarantee success. And it needs to be able to occur at speed. If you innovate slower than your competitor then it has very little value. Grabaseat is a great example of product and pricing innovation that transformed the company’s ability to compete against low cost carriers; Pacific Blue at the time and then Jetstar. Those companies were never able to emulate it, and that had enormous value for Air New Zealand.
Legacy network carriers were being eaten alive by low cost carriers, and that didn’t happen to us. In fact, the low cost carriers started to shrink. Pacific Blue left the domestic market, and Jetstar never really grew. So speed is really important, but also a willingness to fail.
Grabaseat came about after I saw RyanAir offering one pound fares in Europe. I came back to New Zealand, and asked the marketing team to look into what we could do. They came back with the concept of grabaseat. They worked out that RyanAir were using seats they wouldn’t otherwise sell, so they sold them cheaply as that’s better than getting nothing at all.
They put together a proposal, but the finance team had an opposing view. They worried that if you convinced people that seats were only worth a dollar, then we wouldn’t sell any of the higher priced seats and our whole average revenue would be destroyed. We tossed and turned for a while, then I got the finance guys and the marketing guys together and told them we’d run it as a trial for eight weeks. If it went the way finance thought, then we’d be in the hole for $4 million, close it and say it was a promotion and move on. Luckily, the marketing guys were right. Before we launched grabaseat, we had 30,000 daily visitors to our website and were selling around $200 million worth of tickets a year. Six years after we launched grabaseat, we were doing up to 500,000 daily website visitors and about $1.3 billion annual sales.
That wasn’t all down to grabaseat. But it embodied that mindset of being prepared to try things and accept that they won’t always work, being prepared to modify, adapt and learn as you go. The airline industry is very risk averse, so introducing that mindset provided a great source of competitive advantage.
SEE the full interview, and more inspired stories at: unfiltered.tv