British Airways

CHANGE MANAGEMENT IN BRITISH AIRWAYS [PPT-Presented at 3rd National Conference on Competition in Corporations, IIM, Lucknow 29-31/5/2008-Aurnob Roy & Brijendra Singh] Udaipur, Chittorgarh and Banswara

Senior MBA Faculty, Amity Business School

Lessons needs to be drawn from Change Management in British Airways as even after 26 years of publication of “In search of Excellence” ; the Cultural Change in organization continues to excite, stimulate and enlighten us. Cultural interventions offer practitioners and business analyst solutions to organizational ills and academicians, an explanatory framework with virtues of gloriously simple and true. In the British Airways Story, we attempt to rescue a fairy-tale as it is the authentic inspirational account of cultural change.

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PSP- People → Service → Profit

This model (Charles Handy, 1983) holds good. Service

People

4 P’s

PSP

People

Power

Profit

Politics

Practicalities

“Putting People First” model holds good. Extrapolating the future needs of the customers to delight them holds good. Training

of

the

staff

customers to surrepetition

to

serve

the

holds valid in

Competitiveness of Airlines Industry.

Peter & Waterman – In Search of Excellence, 1982 – 8 Key Management Mantras shared by all 43 firms Case Study holds true : •

A Bias for Action – Do it Try it – Don’t Waste Time studying it with multiple reports and committees.

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Customer Focus – Get Close to the Customer (KYC).

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Entrepreneurship – Even Big Companies think and act small by giving people, the authority to initiate initiatives.

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Productivity through people – Treat you people with respect and they will reward you with productivity.

1. Values Oriented CEO’s – The CEO should proactively propogate Corporate values Vertically and Horizontally in the organization. 2. Stick to the knitting – Do what you know well. 3. Keep things Simple and Lean – Complexity encourages waste and confusion. 4. Simultaneously, Centralize and Decentralize – Have tightly centralized control while also allowing maximum individual autonomy.

Strategy needs to be more interactive and proactive. Less arm-chair planning is needed (Hamel & Prahlad, 1993). Adding Value – Central Purpose Business Activity (John Kay, 1993).

of

Japanese practice originated at Honda of 3 G’s GENBA (Actual Place)

3 G’s GENJITSA

GENBUTSU

(Actual Situation)

(Actual Thing)

This is similar to “Management by Walking Around” (MBWA). HP Corp., Senior HR Managers were seldom at their desks, they spent most of the time in meeting suppliers, customers and visiting employs to find their problems and solutions. •

When Management Experts turn case studies of Corporations in to fiction, it is worrying as it encourages people to believe in the new initiatives, the magic wand and not the power structure, the strategies, context, economics/Industrial relations. The magic facilitates turnaround of unproductive workers, work place into enthusiast productive knowledge based

Everyday intervention in management is presented as new – research into management becomes research into fads and fashions. TQM, BPR and Benchmarking grabbing attention.

Change is termed as magical – The Jadugar Management to Jalebi Management – In Search of Excellence, Built To Last theme of change in culture at BA (Robert Heller, 1992 Editor – Management Today, London U.K.) in 1980’s and 1990’s was compatibility of pleasure with profits (Georgiades and Macdonnell, 1998, Leahey and John Kotter, 1990, Goldsmith and Clutterback, 1984, Dana, 1998, Schneider and Bowen, 1995).Cultural Change is the only explanation for BA’s Transformation.

British Airways – A Snap Shot Founded

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1924 as Imperial Airways

Hubs

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i) London Heathrow Airport ii)

London Gatwick

Ariport Frequent Flyer Programme- Executive Club Premier (Invitation) Key People

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Willie Walsh (CEO)

British Airways – A Snap Shot Member Lounge

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Galleries First Galleries Club Galleries Arrivals Terraces Lounge Arrivals Lounge

Concorde Room (LHR & JFK) British Airways Group

- Formed in 1972 – BEA + BOAC

British Airways – A Snap Shot Tense Relationships

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Virgin Atlantic, Formed 1984

Richard Branson Destinations

- 147 in 75 Countries (March 2007)

Privatization

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HQ

- Waterside, Harmondsworth, England, U.K.

Website

http://www.britishairways.com

BA Privatized in 1987

British Airways – Problems Plagued by many difficulties in recent years. AEA reports that BA is the worst airline for lost and delayed baggage, bring over twice as many bags as the average. Worst Airline for punctuality of short/medium haul flight departures and arrivals (Ranked 17 out of 21 Airlines for long haul delays). BA’s Problems stems at being Heathrow-based over-crowded and subject to delays in airport. In 2007, Heathrow was voted world’s Least Favorite Airport.

Potentials & PitfallsWillie Walsh took over as CEO British Airways in 2005-till date BA won SKYTRAX AIRLINE OF THE YEAR 2006 AWARD. BA won OAG AIRLINE OF THE YEAR AWARD-2007. Best Airline Based in Western Europe Award-2007. Best Trans-Atlantic Airline Award2007

Potentials & Pitfalls-Willie Walsh Era 2005-Till-Date. Best Europe-Asia/Australasia Airlines2007. The aim of Willie Walsh in taking over as CEO BA was to save £300 million by 2008 by announcing changes in management of BA. Heathrow Terminal-5 was built exclusively for use of BA at a cost of 4.3 Billion Pound & Officially opened

Potentials & Pitfalls Heathrow Terminal-5 was opened to passengers on 27-03-2008. Problems faced were –Staffs unable to find Car Parks, Not enough Space Available,Confusion,delays in getting to work,long ques for security checks,belts carrying bags clogged, Baggage Handling System Malfunctioned.

Potentials & Pitfalls At one stage BA were forced to stop checking the Bags as large ques formed at the fast Bag Drop & 7 Flights Departed with no Baggage Loaded. In First 5 Days, a Backlog of 28,000 Bags built up & over 300 Flights Cancelled. BA initially handed out leaflets to passengers of cancelled/delayed flights offering upto 100 Pounds Compensation