Diversify your customer base
With more time and more space now
available, it was time for Lehman to take
the next step and look for ways to use that
time and space.
“I stepped back and said, ‘What is this
company really good at?’” Lehman says. “I
didn’t have 20 years with the company saying, ‘We’re airline catering, and we’re
always going to be in airline catering.’”
Instead, she took a different approach.
“I said, ‘Wow, since 2001, we really only
feed the person in first class, so there are
about 16 people up there, and there’s 150 in
the back we’re not serving, and I look out the
window, and I see hundreds of thousands of
people in Dallas-Fort Worth that we’re not
feeding unless they happen to go first class.”
She looked at the business and its core
competency — catering — and an idea
hit her.
“If we can do that for an airline at a certain
time, taking a step back, we can do it for any
convenience store or hospital or school
around our metropolitan areas,” she says.
She realized that LSG Sky Chefs’ kitchens
were within 150 miles of every major populated metropolitan area in the country,
and the aroma of opportunity began to
waft onto her radar.
“You have to take the blinders off,” Lehman
says. “Look at what you’re doing and how it
could be used in a very different way. If you
look at what your core competency is and
see how it could apply to a very different market or industry, a lot of them are obvious.”
She realized that she had executive chefs,
culinary experience, and the knowledge of
quality and hygiene specifications required
by the Food and Drug Administration, so
she decided to take those assets and apply
them to other catering initiatives beyond
just the airlines. She went after convenience stores, hospitals and theme parks,
and won much of their business. Now one
of LSG Sky Chefs’ top 10 customers is not
an airline, and the company provides
55,000 sandwiches a day for it.
“No airline is putting 55,000 sandwiches
on a plane in the southern Florida market,”
Lehman says. “It’s just a way that our building and facilities were not fully utilized.”
She’s also looked at other ways to diversify her service to the airlines. She realized
that many times it wasn’t economical for
them to seek out fresh food, but frozen
food was something they could keep and
simply heat when needed.
“The next step will be, ‘Who else wants
my frozen foods?’” Lehman says. “Can I do
a frozen breakfast meal and market it to
schools for children who need to eat breakfast at the school? Instead of having just a
cereal, could they have a scrambled egg
with protein to start their day?”
Diversification also is a major change for
employees, so you have to help them
through that transition.
“As leadership, we had to transition,”
Lehman says. “We have 8,000 people in our
region that believe we’re an airline caterer.
There has been resistance in our rank and
file and in our kitchen of saying, ‘We’re an
airline caterer — we really don’t want to
serve convenient stores, even if they make
55,000 sandwiches a day.’”
When you take on a diversification initiative, you have to help people see the benefit.
“You have a few quick wins and a few
quick successes, but it also provides the
employees with a more stable environment,” she says. “Convenient stores are
here to stay. Grocery stores are here to
stay. Theme parks are here to stay. Airlines
will be here — it’s always a question of
which ones with the rounds of mergers.”
With so many airlines merging or going
bankrupt, Lehman says it’s heartbreaking,
but her job isn’t to lament how the industry
is changing.
“I have a responsibility to make sure this
company can sustain itself well after
Sondra Lehman is gone,” she says. “I want
to build a team and a company where, will
there be challenges? Absolutely, but I
believe that adding on this kind of diversifying our revenue base makes me a
stronger competitor and a better performer for my airlines. And it gives my
employees a place where they can stay and
have a career.”
While it’s taken the last three years to transition the company into using lean concepts
and diversifying its business, the result isn’t
just survival, but also leadership. LSG Sky
Chefs now owns 41 percent of the market
share in North America, it’s cash flow positive, and it’s not borrowing any money.
2007 marked the first year that it achieved
a revenue increase since 2001, earning
about 30 percent of the worldwide group’s
2.4 billion euros (about $3.4 billion).
“I came in at the bottom, which proved to be the bottom thankfully, and we inched
our way up, almost like a roller coaster,”
Lehman says.
Now the organization is a lean catering
machine.
“If you told me I had to run 8,000 miles
today, I would flat out tell you I can’t do it,”
she says. “But if you told me that my organization had to run 8,000 miles, and I told
each person they had to run one, we could
probably get it done in about 15 minutes.
That’s the power of the LSG team.”
HOW TO REACH: LSG Sky Chefs, www.lsgskychefs.com
