The Response

Perhaps the most fundamental decisions that Marshall made over the transformation was that British Airways was no longer in the transportation business, but rather in the customer service business, which served to refocus the company's strategy. While many structural changes were in order, it was clear to Marshall that the old quasi-governmental/military culture would not support this shift in focus and strategy and that it would have to be changed. The transformation would require the airline's approximately 50,000 staff to think differently about British Airways, their jobs, and especially about their day-to-day behavior. This was the impetus for the culture change initiatives.

One of the first actions in the transformation did not, however, have to do with the organization's culture and had begun before Marshall arrived. It was a radical downsizing of the airline's bloated staff numbers by 40 percent by the end of 1983. Marshall accelerated this process and included senior management, terminating approximately 150 senior managers in what became known as "the night of the long knives." In addition to significant savings in cost and reduced inefficiency, it certainly got the attention of managers and staff remaining with the airline.

The British Airways culture change effort consisted of a number of initiatives undertaken to transform the organization into a customer-focused, cost-conscious, and profitable airline. An important component of the culture change initiatives was Marshall's "lead from the front" style. He seemed to be everywhere and to never forget the name of a staff member. When he flew, he arrived early and talked with the ground staff, flight crew, and cabin crew. He was known to downgrade himself from first class to business or coach class or off-load himself from the flight based on customer demand. He attended nearly every Managing People First session for a Friday afternoon no-holds-barred question-and-answer session with the participants, and on the rare occasion that he could not attend, he had the participants meet with him in the Board Room at BA's Speedbird House headquarters within days after the course ended. He was even known to pitch in with meal service—and the staff loved him.

Achieving Post-Merger Success. Copyright © 2004 by John Wiley & Sons, Inc. Reproduced by permission of Pfeiffer, an Imprint of Wiley. www.pfeiffer.com

The major culture change initiatives and programs from 1983 to 1995 included the following:

• Putting People First (1983-1984)—Often described incorrectly as the only culture change initiative, this one-day program was attended by all staff worldwide to achieve focus on becoming a customer service company. Colin Marshall personally attended 95 percent of these programs, describing his vision for BA and engaging in open discussion with participants.

• A Day in the Life (1984)—A one-day program attended by all staff worldwide to familiarize them with other areas of the airline, what it was like to work there, and the criticality of all in the organization being sensitive to their impact on others in the company as well as on the customers.

• Terminal Supervisor Development Program (1984-1985)—A thirteen-day residence program for all supervisors in the BA terminals. With a new focus on customer service, there were implications for the focus and required skill set of all front-line supervisors in customer service areas. All terminal supervisors went through this program, which covered the new focus and required skills for the redefined terminal jobs. After this program, all those who wished to continue as supervisors in the terminals went through an assessment center as part of reapplying for their jobs.

• Managing People First (1984-1990)—A five-and-a-half-day residence program for all managers in the company worldwide, up through the executive levels. This program provided crystal-clear clarity on the new strategy and the implications for management. It included 360-degree feedback for all managers on the new values management practices that were expected going forward. Managers revisited each aspect of their jobs and reformulated how they would go about their jobs in this new environment.

• Cabin Crew Fleet Director Programs (1985-1986)—To support the change in the way Cabin Crew were rostered into teams that worked the same flights and shift patterns, a new Fleet Director position was created to provide leadership, support, and management on the ground and in the air. This program

Achieving Post-Merger Success. Copyright © 2004 by John Wiley & Sons, Inc. Reproduced by permission of Pfeiffer, an Imprint of Wiley. www.pfeiffer.com

equipped the newly appointed Fleet Directors with the required skills to do the job.

• Leading the Service Business (1986)—A five-day residence program for the top 150 senior managers, focusing on the leadership requirements and unique management aspects of being at the top of an organization focused on service. This program also covered the leadership requirements of an organization undergoing transformation, and included customized 360-degree feedback for all attending.

• Performance Appraisal (1985)—With a new strategy, newly defined jobs, and newly defined management practices, the importance of the performance appraisal system in keeping the focus and demeanor of all staff and management in alignment became critical, and a new system was devised and implemented with management training sessions. Fifty percent of the management bonus was tied directly to demonstrating the new organizational values and practices on the job.

• IT Reorganization (1984-1985)—In line with the new strategy, the entire IT organization needed to be completely reorganized and decentralized, with many of the measures of success radically redefined and all staff refocused in terms of purpose. A large-scale change management exercise was undertaken to accomplish this changeover within thirty days.

In 1995, Colin Marshall resigned as CEO of British Airways and become Chairman of the Board, replacing the irascible Lord King. Robert Ayling was promoted to the CEO job. Under Ayling, the culture change initiatives continued, including:

• Customer Service Leadership Programs (1988-1989)—One particularly important piece of new strategy was "Brands, Branding, and Brands Camp," the introduction of the innovative concept of branding the airline's four classes of service, based on extensive marketing research. This necessitated a series of five-day programs that were run in Europe, North America, South America, the Middle East, Africa, and Asia for all ground management staff on delivering on brand promise or value proposition to the customer.

Achieving Post-Merger Success. Copyright © 2004 by John Wiley & Sons, Inc. Reproduced by permission of Pfeiffer, an Imprint of Wiley. www.pfeiffer.com

• Winning for Customers (1990)—A one-day all-staff program to reemphasize the importance of customer focus and customer service. It made extensive use of computer-based simulations of various customer scenarios that involved staff teams in their resolution.

• Managing Winners (1992-1993)—A three-day residence program toward the end of the transformation period was attended by all managers and supervisors worldwide. It covered the needs for enhanced quality, cross-system cooperation, and personal development if the improvement patterns and successes were to continue and expand.

• Leadership 2000 (1998-1999)—A follow-up to the benchmark Managing People First leadership program, which ran from 1984-1990, this program utilized a battery of individual psychometric instruments and an Outward Bound-type component in addition to its strategic and organizational focus. It addressed the current and anticipated leadership needs of the airline at the start of the new millennium.

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