Video Script Can you think of a really good business decision? What effect did the decision have?
Vee: Yeah, one of my favourite and most simple examples of a good business decision was Premier Inn. In 2008, the country was in the depths of recession and the hotel and hospitality industry was suffering greatly. Businesses were no longer allowing their representatives to stay in the 4 and 5 star hotels, they simply couldn’t afford it. So businessmen were having to stay in cheaper hotels at the lower end of the bracket.
Some lower end hotels thought this was great and gratefully accepted the business. One hotel, The Premier Inn, actually went out to those customers and said to them, ‘Tell me, what
is it that you want? How can we deliver the best service to you?’ And fundamentally those businessmen wanted a good night’s sleep, they wanted a clean hotel room, a comfortable bed
and a good breakfast and a friendly receptionist. They don’t spend much time in the hotel rooms, they need to get on fresh to their appointment the next day.
So the Premier Inn developed the promise of a good night’s sleep and simply put, if you don’t get a good night’s sleep, you get your money back. They also go out to every customer who provides them with an email address and ask for their feedback. The rate of feedback that they get is 35%. This is about 25% higher than most other businesses because they then go back to the customers and give them the results.
The upshot of this is that they are the leading lower brand hotel in, well certainly within the UK at the moment. They have 80% occupancy, which is one of the key metrics for those sorts of businesses, and they have been growing steadily – 20% growth in the last year – compared to their competitors who didn’t talk to their customers, who’ve been losing business and are now in peril.
Can you think of a really bad business decision? What effect did the decision have?
Dacia: I found that when Tony Hayward said on camera that he wanted his life back after the BP disaster, I thought that was a pretty bad business decision because it really seriously affected the PR of the company at a time when they really didn’t need that extra bad PR. So I think was pretty… a pretty bad decision on his part.
It basically made people a little angrier at them, angrier than they already were because of the oil spill that had occurred, so I thought that he should have been a little smarter about what he chose to say, especially in public, about, you know how he felt about the entire situation, how it affected him. Because it gave the impression that he was not thinking about the other people that it affected and he was being quite selfish.
Adam: The worst decision is one that I myself have done, which is going into business with someone which I didn’t completely trust.
That choice was made very much based on the opportunity that there would be more financial incentive to go into partnership with this person.
It affected the company quite adversely. This person came in with the fact that they contributed more finances than other partners, they became quite dominating and they took the company in a completely different direction, created quite some discontent amongst the other directors and ended up quite badly.
Graham: I think a good example of a bad decision or maybe even a good decision which wasn’t well implemented, would be British Airways’ decision to try and copy the low-cost airlines. So they
set up an airline to be like easyJet or Ryanair, but they could never do it because the culture of British Airways was such that they just didn’t really have the belief in efficiency and no frills
that the low-cost airlines, that had been set up for that, had. And so one of the partners of British Airways was a company called GB Airways, and they had their planes painted in the same colours as British Airways – you’ve probably flown on it actually – but it didn’t work. But now easyJet have actually taken over GB Airways and, of, course, now it is a success because the culture of easyJet is much more aligned to the low-cost ethos.
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