Air Canada was very unhappy with its technology services provider, IBM. Missed deadlines, projects that didn’t deliver on promises, and finger-pointing threatened to end the > $100 million annual contract for outsourcing services between the two firms.
Both firms needed a new way to see the value they could expect. They needed a common focus, metrics that made sense, and a sense of shared purpose. To do that, an IBM strategy team was put to work to try to save the account.
Discovery quickly pointed out that IBM was optimizing for economic efficiency while Air Canada was optimizing for operational efficiency. The strategy team pointed out that this approach left no firm focused on the customers—the flying passenger and the cargo expediters.
By adding a third player to the mix, the customer, Air Canada and IBM were able to better align their metrics. They learned that improvement to the customer experience could yield positive improvements across the entire system, and that by jointly focusing on customers’ needs together, each firm could generate better returns individually.
The strategy team proposed a three-legged approach based on employee satisfaction, customer satisfaction, and operational efficiency. It was adopted and the account relationship continued—to the tune of $1.1 billion for a ten-year contract.