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]

Senior MBA Faculty, Amity Business School

AMITY UNIVERSITY UTTAR PRADESH

Lucknow Campus.

Udaipur, Chittorgarh and Banswara

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.

It is used to demonstrate necessary compatibility of pleasure and profits.

PSP- People Service Profit

This model (Charles Handy, 1983) holds good.

People Profit

Service

P S P4 P’s

People Power

Politics Practicalities

“Putting People First” model holds good.

Extrapolating the future needs of the

customers to delight them holds good.

Training of the staff to serve the

customers to surrepetition 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 :1. A Bias for Action – Do it Try it – Don’t Waste

Time studying it with multiple reports and committees.

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

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

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

5. Values Oriented CEO’s – The CEO should pro-actively propogate Corporate values Vertically and Horizontally in the organization.

6. Stick to the knitting – Do what you know well.

7. Keep things Simple and Lean – Complexity encourages waste and confusion.

8. 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 of Business Activity (John Kay, 1993).

Japanese practice originated at Honda of 3 G’s

GENJITSA(Actual Situation)

GENBUTSU(Actual Thing)

GENBA(Actual Place)

3 G’s

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 workers and dynamic firms.

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 - 1924

as Imperial Airways

Hubs - i)

London Heathrow Airport

ii)

London Gatwick Ariport

Frequent Flyer Programme- Executive Club Premier

(Invitation)

Key People - Willie

Walsh (CEO)

Fleet Size - 235

(+62 orders)

British Airways – A Snap ShotMember Lounge -

Galleries First

Galleries Club

Galleries Arrivals

Terraces Lounge

Arrivals Lounge

Concorde Room (LHR & JFK)

British Airways Group -

Formed in 1972 – BEA + BOAC

Alliance - One

World Airlines

British Airways – A Snap Shot

Tense Relationships - Virgin

Atlantic, Formed 1984

Richard Branson

Destinations - 147 in

75 Countries (March 2007)

Privatization - BA

Privatized in 1987

HQ -

Waterside, Harmondsworth,

England, U.K.

Website -

http://www.britishairways.com

British Airways – ProblemsPlagued 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 & Pitfalls-Potentials & Pitfalls-Willie Walsh took over as CEO British Willie Walsh took over as CEO British Airways in 2005-till dateAirways in 2005-till date

BA won SKYTRAX AIRLINE OF THE BA won SKYTRAX AIRLINE OF THE YEAR 2006 AWARD.YEAR 2006 AWARD.

BA won OAG AIRLINE OF THE YEAR BA won OAG AIRLINE OF THE YEAR AWARD-2007.AWARD-2007.

Best Airline Based in Western Best Airline Based in Western Europe Award-2007.Europe Award-2007.

Best Trans-Atlantic Airline Award-Best Trans-Atlantic Airline Award-20072007

Potentials & Pitfalls-Willie Potentials & Pitfalls-Willie Walsh Era 2005-Till-Date.Walsh Era 2005-Till-Date.Best Europe-Asia/Australasia Airlines-Best Europe-Asia/Australasia Airlines-2007.2007.

The aim of Willie Walsh in taking The aim of Willie Walsh in taking over as CEO BA was to save £300 over as CEO BA was to save £300 million by 2008 by announcing million by 2008 by announcing changes in management of BA.changes in management of BA.

Heathrow Terminal-5 was built Heathrow Terminal-5 was built exclusively for use of BA at a cost of exclusively for use of BA at a cost of 4.3 Billion Pound & Officially opened 4.3 Billion Pound & Officially opened by Queen Elizabeth II on14-03-2008by Queen Elizabeth II on14-03-2008

Potentials & PitfallsPotentials & PitfallsHeathrow Terminal-5 was opened to passengers on Heathrow Terminal-5 was opened to passengers on

27-03-2008.27-03-2008.

Problems faced were –Staffs unable to find Car Problems faced were –Staffs unable to find Car

Parks, Not enough Space Parks, Not enough Space

Available,Confusion,delays in getting to work,long Available,Confusion,delays in getting to work,long

ques for security checks,belts carrying bags ques for security checks,belts carrying bags

clogged, Baggage Handling System Malfunctioned.clogged, Baggage Handling System Malfunctioned.

Potentials & PitfallsPotentials & PitfallsAt one stage BA were forced to stop checking At one stage BA were forced to stop checking

the Bags as large ques formed at the fast Bag the Bags as large ques formed at the fast Bag

Drop & 7 Flights Departed with no Baggage Drop & 7 Flights Departed with no Baggage

Loaded.Loaded.

In First 5 Days, a Backlog of 28,000 Bags built In First 5 Days, a Backlog of 28,000 Bags built

up & over 300 Flights Cancelled.up & over 300 Flights Cancelled.

BA initially handed out leaflets to passengers BA initially handed out leaflets to passengers

of cancelled/delayed flights offering upto 100 of cancelled/delayed flights offering upto 100

Pounds Compensation to cover cost of Hotel Pounds Compensation to cover cost of Hotel

Room of Two passengers.Room of Two passengers.