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How To Build A Disruptive Organization

 

 

 

In today´s hyper-competitive times competition is not just on brand, product, and technological innovation. It´s also – and foremost – on the business model. 

Surprised? Disturbed? This might be possible, since you´re not clear about what your business model and strategy really is, aren´t you?

Unfortunately, something you will not be able to afford any longer. Neither content nor technology is king… it´s disruption! Disruption can be caused by the introduction of products, services, or business models either in new or existing markets in such a way as to shake up the industry and eventually to oust established players.

Remember fixed line telephones? Remember then cellular phones? And afterwards? Not just a next generation of technology. Instead, a new business model: smart phones on the one side, and Skype on the other! And tomorrow… Smart watches? 

Well, it´s pretty obvious that the old guard, and almost every industry, are being challenged by a countless number of cutting-edge business models. Think Nespresso for example. I like my daily cup of its Lungo Leggero from their famous refill capsules. Good quality plus excellent marketing (thanks also to George Clooney and John Malkovich). That´s all? By far not! What Nespresso actually achieved was to lock in consumers (including myself) by having created a new business model which generates repetitive sales and profits.

THREE BASIC STRATEGIC OPTIONS FOR DISRUPTORS

In general there are three options for a disruptive and visionary game changer: 

Firstly, you develop your own disruptive business model (explained in more detail below). Second option, you develop further the existing business model in the current industry or in adjacent industries and categories. Nestlé, for example, is transferring Nespresso into the tea category with its Special.T concept.

Third option, you take an existing business model – let´s say something like the Nespresso business model – and apply it to (completely) different industries. Meaning to deploy existing and proven principles elsewhere. AppleGoogleSamsung & Co. have been doing it already by developing their own Nespresso-like ecosystems.

DESIGNING A DISRUPTIVE ORGANIZATION 

If you´d like to apply a more entrepreneurial perspective to business modelling and to become someone who wants to create tomorrow´s businesses, to find new and innovative ways to excite customers, and to replace outdated paradigms and strategies, then the following principles might be useful:

1. Understand the business you are in, evaluate, and specify your current business model. It´s an obvious starting point. However, not many would be in a position to give a truly succinct answer to it.

2. Evaluate where your customers, your industry and adjacent industries/categories might evolve to in 5 – 10 years. Will your existing business model and associated products and technology still fit? Will a process of continuous innovation be sufficient to satisfy and to excite customers?

3. Decide to be a disruptor – even a self-disruptor – and take the lead. Also, and especially, in the new age of disruption there is nothing as powerful as the traditional first-mover advantage. 

4. Broaden your scope and imagine the impossible. Look far outside of your current thinking patterns and industry boarders. Future revolutions and competition most likely will also come from what you currently might consider unrelated products, services, and industries. Think without Limits and Limitations. Consider yourself as an active subject rather than a passive objective. 

5. Ensure that the new concept is simple, accurate, holistic, easily understood by all stakeholders, and at the same time not oversimplifying relevant aspects. Be specific about future customer segments (including their volatile needs and wants), your value offer (including pricing and promotions), your customer interactions, your partnerships and alliances (including virtual networks), your distribution and communication channels, and your required key resources.

6. Try to set up a business model where you can integrate so-called switching cost, i.e. think about how you can keep your customers within your system by offering them distinctive, cost saving, and value-adding advantages.

7. Replace cautiousness by bold and strategic consideration. Disruptive strategies will be driven by speed and audacity. In the short-term they might even cannibalize (part of) the existing business and/ or decrease profits, since starting margins might be lower. Apply a long-term perspective and resist short-term focused investors and management.

8. Apply new business metrics. Put revenue, cost, market shares, and profit into a new context and link them with a modified weighting and time frame. Of course, they will remain important. No doubt. They will need to be complemented, however, by criteria such as customer engagement, customer excitement, number of disruptive ideas, and the capability and ability to invent new business models.

9. Establish an entrepreneurial spirit in your organization. An environment should prevail where employees are willing to take risks. This would increase intrapreneurial conviction and drive. It also binds the corporation in an implied contract not to stop the internal disruptor for any reason other than poor performance.

FINAL THOUGHTS

Could Johannes Gutenberg, the father of modern book printing, have foreseen the advent of e-books? Most likely not! However, his publishing successors could have been better prepared, if they had applied what Peter Drucker once pointed out: “Eventually every theory of the business becomes obsolete and then invalid.” 

How else could have Apple transformed from a PC maker to the world´s leading music seller? Although disruption and innovation are similar, disruption goes at least one step further by changing how markets behave, how consumers and customers think, and how we live our lives. 

Today´s industries and organizations are being transformed by unprecedented scale and speed. Often it´s not an evolution any longer, but more of a revolution. Time has come for executives, business owners, academics, and employees to understand the impact and in parallel to successfully address the challenges and opportunities of those new business models.

 

Andreas von der Heydt is the Country Manager of Amazon BuyVIP in Germany. Before that he has been in senior management positions at L’Oréal. He´s a leadership expert, executive coach and NLP master. He also founded Consumer Goods Club. Andreas worked and lived in Europe, the U.S. and Asia.

 

Source: http://www.linkedin.com/today/post/article/20140406142900-175081329-how-to-build-a-disruptive-organization?trk=mta-lnk

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General

Why Good Managers Are So Rare

Bad managers cost businesses billions of dollars each year, and having too many of them can bring down a company. The only defense against this massive problem is a good offense, because when companies get these decisions wrong, nothing fixes it. Businesses that get it right, however, and hire managers based on talent will thrive and gain a significant competitive advantage.

More here: here

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General

Seven Ways To Increase Employee Satisfaction Without Giving A Raise

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From Forbes:

A few years ago when employees became dissatisfied with their organization they would quit and get another job. Today, with placement opportunities very low and unemployment extremely high, very few people opt to quit and leave. As a result something much worse is happening within organizations. Employees “quit,” but they stay. In the last year, overall job satisfaction in the U.S. has declined significantly. Employees feel stuck in their current jobs and their dissatisfaction with the organizations they work for increases.

However, not all organizations are experiencing these dismal results. A recent assessment of employee satisfaction by one of our clients showed a significant improvement over past years, though this company was not immune to the effects of the recession. Examination of the data showed 7 factors that created this positive increase in their satisfaction, even during the economy’s poorest times.

1. Consistent Values. In some organizations, employees observe that core values appear to be abandoned when the economy is poor. Leadership values seemed to apply in good times, but to dwindle or even disappear during stress. This organization, however, held tightly to its core values as the economy turned. Employees began to more fully appreciate those values as well when they saw what was happening in other companies during difficult times.

2. Long Term Focus. This company clearly saw the recession as a temporary problem, and maintained its focus on the longterm objectives. The recession had a significant impact on the longterm objectives, but it created new opportunities as well. Employees don’t mind going through difficult times when they believe there is a brighter future ahead.

3. Local Leadership. company recognized that the major source of satisfaction or dissatisfaction came from what happen in each work group. Every manager and supervisor received a clear assessment of the satisfaction of their employees and was challenged to find opportunities to improve.

4. Continuous Communication. People tend to communicate less during bad times, when in actuality, they need to communicate even more. This company increased its efforts to communicate and share important information. If there was no good news to share, they would share the reality of their current situation.

5. Collaboration. Groups made significant improvements in their ability to share resources and work together. This reduced costs and increased efficiency.

6. Opportunities for Development. Because the pace of work was slower, people had the opportunity to learn new skills and develop new capabilities. This organization took advantage of the slower time by challenging employees with “stretch” job assignments. They also increased formal training.

7. Speed and Agility. With less budget, everyone saw the need to move quickly and take advantage of opportunities in the marketplace. Speed of decision was emphasized.

Clearly, it is a fallacy to assume that bad times equate to lower job satisfaction. As our research illustrates, it is simply not true. The organization we described made significant gains in satisfaction and commitment during one of the worst financial times in history by doing the right things, and doing them well. These improvements helped the company create substantial financial momentum during the challenging economy as well.

The moral of the story is this: Many organizations wait for an economic and business turnaround to measure the satisfaction of their employees, but they are missing a great opportunity. By assessing now, they can build on the current opinions in any economy and can make the changes that will help them capitalize on better financial times. The activity also instills greater trust: By asking for opinions now, you are showing your employees that you’re not just asking for what you want to hear, but rather asking for what you need to be hearing as well. So what are you waiting for? If you value your employees’ satisfaction, the time to be asking for their feedback is now.

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General Trends

How to Listen When Your Communication Styles Don’t Match

Why do people who consider themselves good communicators often fail to actually hear each other?

Often it’s due to a mismatch of styles: To someone who prefers to vent, someone who prefers to explain seems patronizing; explainers experience venters as volatile.

This is why so many of us see our conversational counterparts as lecturing, belaboring, talking down to us, or even shaming us (if we are venters and they are explainers) or as invasive, out of control, and overly emotional (if we’re an explainer and they’re a venter).

Facing this kind of mismatch, what do you think the chances are for either person actually listening with an open mind?

My answer is… very low.

It is tempting to say “zero,” but since it’s not possible (or even desirable) to work only with people who match your communication style, you need to develop the skill to try to listen around their communication style.

Listening around that style, however, can be incredibly effortful. When someone is either venting/screaming or explaining/belaboring it triggers a part of your middle emotional brain called the amygdala, which desperately wants to hijack your attentive listening and instead react reflexively with whatever your hardwired reactions are. And resisting that amygdala hijack is exhausting.

What do to with a venter/screamer

If your conversational counterpart is a venter/screamer, your hardwired survival coping skill might be to tell them to calm down (which will only make them more upset), to shut down and get silent (which will only make them yell longer, because they’ll think you’re not listening), or to try to point out how irrational venting is (which, as noted above, they will perceive as patronizing and belaboring).

Instead, say to yourself, “Okay, here comes another temper tantrum. Just let them blow. Try not to take it between the eyes and imagine you’re looking into the calm eye of a hurricane and the storm is going over your shoulder.”

To do this, focus on their left eye. The left eye is connected to the right brain — the emotional brain. Let them finish. Then say, “I can see you’re really frustrated. To make sure I don’t add to that, and to make sure I don’t miss something, what was the most important thing I need to do in the long term, what’s the critical thing I need to do in the short term, and what do I need to get done ASAP?” Reframing the conversation this way, after they’ve finished venting, will make sure that your “explainer” self knows what to do – instead of ignoring the venting as another random outburst from “Conan the Barbarian” or “the Wicked Witch of the West.” Chances are, they do have something important they’re trying to tell you – even though they’re not communicating it very well.

After they respond, say to them, “What you just said is way too important for me to have misunderstood a word, so I’m going to say it back to you to make sure I am on the same page with you. Here’s what I heard.” Then repeat exactly, word for word, what they said to you. After you finish, say to them, “Did I get that right and if not, what did I miss?” Forcing them to listen to what you said they said, “because it was important,” will slow them down, will help you stay centered and in control, and will earn you their and your own respect.

What to do with an explainer/belaborer

If your conversational counterpart is an explainer, your hardwired survival coping skill might be to say to yourself, “Here they go again, make sure you smile politely even if you want to pull your hair out. Try not to let your impatience and annoyance show.” The problem with this is that even though they may be oblivious to others as they go on and on, at some level they may be aware of your underlying impatience and… that might actually make them talk longer. Yikes.

Realize that the reason they explain and belabor things is probably because their experience is that people don’t pay attention to what they say. They don’t realize that while that may be true of some truly distracted people, for others, the reason they don’t pay attention is that the speaker is belaboring something that the listener already heard — and doesn’t want to hear over and over again. Another possibility is that these explainers may not be feeling listened to somewhere else in their life (by their spouse, kids, parents, or boss) and is now relieved to have you as a captive audience.

When the explainer goes into his explanation/lecture/filibuster, say to yourself, “Okay, this is going to take a while.” Put a mental bookmark in whatever you were working on. Then look them in their left eye with a look that says, “Okay, take your time, I’m fully listening.” Instead of feeling frustrated and reacting by become impatient and fidgety, remind yourself, “They need to do this. I can be patient.”

Then when they finish then apply a similar response to the venter/screamer with the following minor edit:

“I can see that you really had a lot that you had to say. To make sure I don’t miss something, what was the most important thing I need to do in the long term, what’s the critical thing I need to do in the short term, and what do I need to get done ASAP?” ”

After they respond to that, say to them, “What you just said is way too important for me to have misunderstood a word, so I’m going to say it back to you to make sure I am on the same page with you. Here’s what I heard.” Then repeat exactly, word for word, what they said to you. After you finish, say to them, “Did I get that right, and if not, what did I miss?”

Your amygdala is probably saying to you and to me, “I don’t want to do either of those things. These people are obnoxious and unreasonable. Why should I kowtow to them?”

Here are several reasons:

They aren’t likely to change. These are deeply ingrained personality traits.
Being more open and inviting them to talk rather than closed and resistant will lessen their need to act this way. Listening patiently hath charm to soothe the savage (or boring) beast.
You will feel more self-respect and self-esteem. The above approaches will enable you to remain cool, calm, collected, centered and communicative in situation that formerly frustrated you and made you react poorly.

Mark Goulston, M.D., F.A.P.A. is a business psychiatrist, executive consultant, keynote speaker and co-founder of Heartfelt Leadership. He is the author of Just Listen and co-author of Real Influence: Persuade Without Pushing and Gain Without Giving In (Amacom, 2013).

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General

How (Un)ethical Are You?

 

Answer true or false: “I am an ethical manager.”

 

If you answered “true,” here’s an uncomfortable fact: You’re probably not. Most of us believe that we are ethical and unbiased. We imagine we’re good decision makers, able to objectively size up a job candidate or a venture deal and reach a fair and rational conclusion that’s in our, and our organization’s, best interests. But more than two decades of research confirms that, in reality, most of us fall woefully short of our inflated self-perception. We’re deluded by what Yale psychologist David Armor calls the illusion of objectivity, the notion that we’re free of the very biases we’re so quick to recognize in others. What’s more, these unconscious, or implicit, biases can be contrary to our consciously held, explicit beliefs. We may believe with confidence and conviction that a job candidate’s race has no bearing on our hiring decisions or that we’re immune to conflicts of interest. But psychological research routinely exposes counterintentional, unconscious biases. The prevalence of these biases suggests that even the most well-meaning person unwittingly allows unconscious thoughts and feelings to influence seemingly objective decisions. These flawed judgments are ethically problematic and undermine managers’ fundamental work—to recruit and retain superior talent, boost the performance of individuals and teams, and collaborate effectively with partners.

This article explores four related sources of unintentional unethical decision making: implicit forms of prejudice, bias that favors one’s own group, conflict of interest, and a tendency to overclaim credit. Because we are not consciously aware of these sources of bias, they often cannot be addressed by penalizing people for their bad decisions. Nor are they likely to be corrected through conventional ethics training. Rather, managers must bring a new type of vigilance to bear. To begin, this requires letting go of the notion that our conscious attitudes always represent what we think they do. It also demands that we abandon our faith in our own objectivity and our ability to be fair. In the following pages, we will offer strategies that can help managers recognize these pervasive, corrosive, unconscious biases and reduce their impact.

 

More here

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Nailing a Presentation in the First 60 Seconds

 

Whether you are making a presentation at your local library or to senior executives at your firm, the first 60 seconds set you up for success or failure.

Everything most precious to me in this world is the result of the first 60 seconds of a speech I gave on a cold day in Philadelphia. It was my turn to speak during a Wharton MBA Toastmasters program; I would be given a topic, and then would have to begin without advance preparation.

My topic: explain why MBAs aren’t all greedy jerks.

Terrified of boring the audience, I decided to flip the topic and embrace the dark side. My speech was a rant about how MBAs are all-powerful masters of the universe (note to readers: I was kidding.)

An attractive woman came up to me afterwards and said, “You are either utterly evil, or the most creative speaker I’ve seen. Which is it?”

I’ve now been married to that woman for 26 years.

The first 60 seconds you spend in front of an audience are pivotal. If you’re nervous or too excited, time can be a blur. But this is when the audience decides whether or not they like you, and it’s your best opportunity to get in a groove that will guide you through the rest of your presentation.

I’d like to make the following suggestions:

  • Plan your opening in advance. You should know exactly how you are going to open your speech. Just as people do when meeting a stranger, audiences will notice your body language, confidence level and demeanor. Don’t just focus on what you will say; practice your movements and tone. Look for ways to signal that you are a person with a valuable message to share.
  • If at all possible, prepare the room in advance to your liking. If you like to move around, give yourself room to move. If you feel more comfortable in one place, set up any aids (water, notes, clicker…) so they are easy to access. Make sure the lighting is right. The worst thing you can do is to step in front and start fumbling around.
  • Expect the unexpected. I’ve had 45 hung-over people show up for a “major keynote speech” (lesson: never be the first speaker of the morning in a casino) and 500 show up for a “casual little discussion.” At one event in an arena, all the lights went off while I was speaking, then back on again 30 seconds later. No matter what happens, your role is to remain calm and composed. If you do this, you will win over the room. I actually rehearse how I might react to unexpected occurrences.
  • Be immediately interesting. Even if you have housekeeping notes or details to go over with the audience, don’t start with these! First, build a rapport and demonstrate that you are both in control and worth their attention. Audiences are happy to support a speaker, once they recognize his or her talents.
  • If you are terrified, use that terror to your advantage. As part of your planned opening, say something that either acknowledges your anxiety or makes it seem like good acting. In the past, I’ve opened with stories that began, “If it seems like I’m nervous, it’s because _____” and then wove that into a joke, cautionary tale or vivid example of what we’d be focused on in my session.

Many years ago, my wife came home from a conference with a video of the keynote speaker, who I think was Captain Charlie Plumb. He had an opening like none I’ve ever seen before. On a bare stage, with a huge audience present, he didn’t say a word. Instead, he walked eight feet in one direction, turned and walked eight feet. He did this repeatedly. He took his time, and seemed unaware of the audience. When at last he looked up and spoke, he shared that as a prisoner of war in Vietnam, his cell was eight by eight feet long and that the lessons he learned inside it were relevant to what professionals experience in the business world.

In a simple but powerful way, he accomplished all the items I’ve shared with you today, and gained the audience’s rapt attention in the first 60 seconds.

The article was originally published here

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General

Before You Take a Risk, Lay Out the Logic

There is little I see about the practice of risk management today that is particularly helpful.

In many companies, the approach seems to be a combination of formalized risk tracking and cultural engineering. To control downside, managers make and track long lists of standardized business risks, as in the interminable listing of risk factors in the Management Discussion & Analysis (MD&A) required by regulation in the annual financial statements of public companies. To balance that and avoid squelching productive risk-taking, they often foster in tandem a culture that celebrates failure and encourages risk-taking behavior.

In my experience, neither contributes positively to managing risk. In fact, they seem to combine to increase it.

The only reason to celebrate failure is if we learn something useful from it. And the only way we can do that is by laying out the logic of the initiative in question rigorously in advance. That means specifying the expected outcomes and then systematically specifying what would have to be true for the initiative to succeed. What would have to be true about the industry, about the customers, about our capabilities, about the competitors?

That is the logical structure of risk — as opposed to the laundry list of standardized risks beloved of regulators. It’s also very different from the trial-and-error philosophy implicit in the “celebrate your failures” school of thought.

If we have that logical structure thought through and documented in advance, we will have a much better chance of understanding which of the things that we knew and believed would have to hold true didn’t turn out the way we counted on. We can learn things, for example, about how we were overconfident about how fast consumers would adopt our new product, but we were right about the industry, our capabilities, and competitor reaction. Or maybe everything was right except our assumption about a key competitor’s ability to replicate what we did.

Suppose, for instance, the success of a new product launch requires that consumers switch relatively quickly from competitors. If that condition and its link to the initiative’s outcome have been made explicit, the product launch team will know to test and track how consumer behavior evolves. They will be more alert to changes in that behavior and can act to mitigate or exploit those changes.

But if consumer behavior is one of a long list of largely undifferentiated risks, it will very likely be tracked passively and its impact will become apparent too late for the company to do very much about it. In that case, the success or failure of the product launch will be largely outside the company’s control. In which case, why should the team be rewarded for anything?

Bottom line, risk management predicated on a mix of standardized risk tracking and cultural norms falls short. The only way for risky behavior to create value is if it is logically and precisely directed. If you learn how to do that successfully, you’ll soon find that you’ll actually be able to take on bigger risks than you might have thought possible.

Article by Roger Martin:

Roger Martin (www.rogerlmartin.com) is the Dean of the Rotman School of Management at the University of Toronto in Canada. He is the author of Playing to Win: How Strategy Really Works.

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General

When You’re Innovating, Resist Looking for Solutions

 

If someone comes to you with a problem, you start thinking of a solution. That’s natural — everyone does it.

But as soon as you start thinking of a solution, you unconsciously begin shutting off possibilities for getting a deeper understanding of the problem and therefore of finding a truly breakthrough solution.

That’s why it can often be more productive to avoid “solutions” thinking when a problem arises. It’s better to stay in what we call the “problem space” for as long as possible. If that sounds strange, here’s an example of what we mean.

A military organization came to us for help because people who were being observed by pilotless drones were using techniques such as smoke screens to deceive the analyzers of the drones’ video and other data. The organization asked for assistance understanding the adversary’s deception techniques. But by framing the request that way, the client had already moved from the problem space toward the solution space — the client was specifying the type of solution that was expected.

We encouraged the client to stay in the problem space, sometimes known as the “front end,” in order to get a deeper understanding of the problem. The client soon came to see that analysts are deceived because there are limits on their ability to perceive. The real issue is understanding these limits.

To further explore that issue, we held an off-site at which we brought in people (outside the military) who are experts at confusing people, and others who are experts at making sense of ambiguous information. The first group included an illusionist and a theatrical set designer. The second included a forensics expert and a blind person who was practiced at perceiving whether her guide dog was leading her into safe or unsafe places.

The insights from this “divergent collaboration” of people from disparate walks of life gave the client ideas for new avenues of research. For example, could the analysts’ information feeds include other types of data, such as auditory signals, or even smells?

What does all this mean about your own efforts to solve problems and execute on innovation?

First, force yourself to stay in the problem space as long as possible. Obviously, companies sometimes face real restrictions on the types of solutions they can consider. But often those limits are purely psychological, the result of narrow thinking about the nature of the problem.

So go deep. Look for underlying issues. What’s the real obstacle you face? Once you’ve found it, go deeper still. What’s the essence of that obstacle?

Then search for different viewpoints on the obstacle. Go far afield. Look for people who have faced that same essential challenge, and tap their insights. This can be easier than you think. It can be as simple as reading a relevant book or magazine that you’ve never looked at before. Or call an unfamiliar organization that includes people who face your challenge on a regular basis. Don’t be afraid to bring outsiders into the discussion. We’ve found that people from wide-ranging backgrounds are often very willing to help — they find the experience fascinating.

Be thoughtful about the physical environment in which you explore the problem space. A lot of companies do offsites in hotel conference rooms, but those can be mind-numbing. Find something a little more conducive to exchanging ideas, a comfortable setting where you can get away from your day-to-day activities, form and re-form small groups, write on the walls. And plan the sessions carefully. When it comes to mixing and matching ideas, don’t trust to luck. Structure conversations so that they’re enriching rather than draining.

None of this is easy. Staying in the problem space, in particular, can be very difficult. Sometimes clients feel frustrated that we resist moving from the problem space to the solution space. Even some of the “divergent” collaborators we bring in for additional insights feel frustrated when they hear we’re less interested in their proposed solutions to a client’s problem than in how they look at the issues involved.

But staying in the problem space is worth the effort. If you rush to a solution, you run the risk of solving the wrong problem. The place to get the problem right is in the problem space, where you’re more open to new ideas.

 

Originally published here

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General

How Southwest And Virgin America Win By Putting People Before Profit

Southwest and Virgin America have a nearly identical hiring method that can be captured in the Southwest motto: “Hire for attitude; train for skill.” Some people believe this motto doesn’t extend to pilots. It certainly does, according to Southwest pilots. You see, if a pilot gets to the interview stage, he or she knows how to operate a 737.

More here

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