Bad decisions can cost companies billions – and they are often the result of well-meaning people solving the wrong problems.
The story of Eurostar’s lost billions
Take the example of the Eurostar train that links London with mainland Europe. At the end of the 20th Century, eager executives were keen to grow market share.
“If we can cut journey time, people will get to spend more time doing business or enjoying themselves in Paris. That will attract more passengers from the ferries and airplanes”
Seems sensible, right?
The result? A new track and other improvements in South-East England cutting journey time from over three hours to just under three hours.
The total cost? Approximately £6 Billion.
Was it worth it?
Over the past five years, Eurostar has delivered (across its entire network) around 60 million passenger journeys. Only a fraction of those journeys used the new track – one of their biggest routes is Paris <-> Amsterdam.
Even if every one of these passengers over the past five years travelled on this new track it would mean an additional cost of £100 per journey.
The current cost of a Eurostar ticket? £39 for standard class.
Eurostar solved the wrong problem.
So, how could storytelling help us get to a better solution?
Let’s find out!
Framing your problem as a story
Using a basic story framework can help us make better decisions.
Let’s set off on a quest.
To get to the heart of the problem, we’ll build your quest’s narrative from three elements: treasure, dragon, and hero.
The treasure: Is it shiny enough to warrant the effort?
The dragon: What is the problem that stands between you and the treasure?
The hero: They are strong, resolute, and the owner of exquisite cheekbones. Their job is to slay the dragon and capture its treasure.
Each element of the story will inform the next. If you get the right input, you can frame the right problem and get the optimal output.
So where did Eurostar go wrong?
Treasure
The treasure of greater revenue was out of proportion with the cost of the solution.
Eurostar already had around 70% market share on this route. Despite issues with punctuality and limited services, the only reasonable alternatives were to fly to Charles de Gaulle Airport or to take the ferry. Both are far more complex, frustrating, and time-consuming.
Any increase in passenger numbers that could truly be attributed to track improvements would not likely be enough to warrant the £6 billion cost required to slay their…
Dragon
Eurostar bravely, and very expensively, attacked the wrong dragon. Instead of framing the problem as, “journey times are too long”, they could have zoomed out and described the problem as, “the customer experience needs to improve”. Nobody complains about how slow their cruise ship is.
This would have opened up the discussion and they probably would have chosen a different …
Hero
By focusing on an engineering-related dragon, they sought an engineering team for their hero.
Choosing the RIGHT hero is critical: If you pick the IT team as your hero you can guarantee they will find a technology-based solution. If you pick the Hulk, they will find a “Hulk SMASH!” solution.
Getting input from multiple departments is critical.
Result
By seeking input from other teams and reframing the problem, Eurostar could have captured a more precious treasure – satisfied customers that are happy to spend more money onboard – because they consider the journey itself, part of the experience. Arguably, that would have increased revenue way beyond increased ticket sales.
Any one of the following solutions might have been suggested:
- Free high-speed internet – so business travellers could be productive
- A free sandwich and drink – so leisure travellers could relax
- More dedicated entertainment carriages – so everyone has space to stretch out and socialise (and spend more money…)
When we use stories to describe the problems we are facing:
- We have a better chance of finding the right solution
- It’s easier to get buy-in from our colleagues
- It’s easier to assign accountability
This applies to our industry, too.
Let me introduce you to Sam, a senior HR Manager at Orpheus Asset Management, a mid-size buyout firm. Right now, Sam’s sitting at their desk, pouring over the company’s latest employment figures.
Their head is in their hands.
The company simply can’t attract top talent.
How do they solve this problem?
As the de facto hero, they reach for a solution that makes sense to them – higher salaries.
Offer more money per year and talented analysts (the treasure) will be beating down the door.
But are they slaying the right dragon to reach this treasure?
By framing the problem differently, could a better, less costly solution be found? Are there people in other departments who might bring a different perspective?
The dragon is ‘our salaries are too low’, but could they have been discussing why the company isn’t a more attractive place to work or why their marketing and social media presence isn’t helping them appeal to young professionals?
By settling on the narrow problem of low salaries, Sam is making several mistakes:
- Although the recruitment issue was a novel problem with specific underlying causes, Sam is leaning on their experience in HR, resulting in a predictably “HR” solution.
- Sam is pushing a single perspective, known as the false consensus effect. Other departments and professionals may have framed the problem and solution very differently.
- Sam is focusing on the symptoms instead of the cause – the solution did not account for what was causing the employment issue.
Receiving input from other stakeholders would have helped Sam come up with a better framework and, probably, a more impactful solution. For example, if Sam had marketing input to the story, other cheaper, more effective solutions may have been found. Perhaps, to better communicate attractive, already present, elements of the firm.
If we set out to slay the wrong dragon, we may never reach the treasure or pay too high a price for it.
In conclusion: solving your problem is a story waiting to be told
Too many businesses are solving the wrong problems. When we use stories to frame the problem, we are more likely to land on the right problem and – crucially – the right solution.
Three final thoughts on constructing your story:
- Explicitly list the treasure, dragon, and hero. This helps holds decision makers accountable for their choices.
- Keep it simple. For example, if there is more than one dragon, choose the one that is most likely to focus minds on the task at hand. Telling a snappy, coherent story is more important than including every detail.
- Remember this is a framework for discussion. Using the story structure depersonalises criticism and allows for a more open debate. Rather than a dry strategy session where everyone turns up with their own preconceived notions of what should be done, you can introduce a sense of playfulness. Are we looking for the right treasure? Is this dragon worth overcoming?
We salute your brave party of adventurers as you set out on your quest.
But if your dragon is a particularly ferocious beast, we know a heroic band of bards who can help.
Send a raven (or an email if one isn’t available) to Garry Patterson in our IR & Marketing team.
