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Itinerary for Innovation:
Lessons from the travel world
Ralph Bahna, MBA 65, has driven countless innovations in the travel industry. After graduating from Haas, he was credited with helping to turn Trans World Airlines (TWA) around by inventing business class while still in his 20s. He then led a turnaround as CEO at Cunard Line in the 1980s and in 1993 founded Club Quarters, private, city-center hotels, which he still leads today. Bahna helped in the development of Priceline.com, which he has served as board chairman since 2004. In August, he shared his “secret sauce” for leading change with Berkeley MBA students, building on his work with Dean Rich Lyons on the school’s innovative leader curriculum.
What are the ingredients of your “secret sauce?”
First, define what you’re doing with as few words as possible. If it takes a page to describe a problem, there are probably five or six problems and you have to prioritize. Second is ambition. MBAs want to achieve a lot, but they may not be ambitious in framing the problem and finding a solution. I gave the example of Club Quarters: To have the best locations, be full service, charge less, and still make a big profit, you need to be ambitious and determined.
Next is testing. In the digital age, testing is a lot more possible and more affordable. Then, after a successful test, usually you still have to get a bunch of other people in the organization to implement the plan, which is often where the heavy lifting is. You have to take as much care in selling the project to the people who will implement it as you do in developing the idea.
Talk about leading big change at one organization.
When I joined Cunard Line, it was still operating transatlantic ocean liners. They were doomed by the jet, but they operated as if they weren’t. Shortly after I arrived fuel prices went up by three or four times. Almost all of our competitors went out of business.
We had to learn the discipline of not trying to be the best at everything because the consumer didn’t have the money to pay for it.
We were very imaginative about getting PR without spending advertising dollars, and we invented a lot of things. Cunard was the first to put computer centers and spas on ships. We created this famous Queen Elizabeth 2 Concorde program. You could fly one way on the Concorde and sail the other way on QE 2. That was so successful Cunard started flying the Concorde around the world.
How did you get involved in Haas’ Innovative Leader curriculum?
I’d been working on a few ideas to give back. One area that interested me was making America more competitive, which I thought I could help it do by working with a leading business school. I thought if we could teach students how to think first in a more careful, complete way, we could improve the success of American business. I spent some time at Haas discussing this while the school was analyzing its strategy. As a result, I had some input into the Innovative Leader program.