What is the basic Nature of Change? Case study How British Airways Turned around .

Nature of Change - Continuous and Multidimensional:

"If you change after change, you will survive. If you change with change, you will succeed.

If you cause change ,you will lead"

The classic change and transformation effort at British Airways is standing example to prove the point that change efforts that succeeded at one point of time may not succeed again if attempted and change cannot be one-time effort or one dimensional. 

British Airways  happened to be the national carrier and had developed totally not only among the patriotic British  but passengers of other nations  a negative brand image as the least favored, under-performing and unprofitable international carrier. For anyone attempting to redeem from this situation to become the most profitable and admired airline was like climbing mount Everest and daunting task for any CEO. 

BA needed someone like Lee Iaccoca who led Chrysler out of trouble as transformation would necessarily involve massive work culture transformation and change in every operational area within the airline besides strong autocratic leadership  to drive these changes. Prime Minister Margaret Thatcher was determined to straighten it out BA. 

She assigned that task to John King, the chairman and he picked Marshall, who was known and respected marketing expert to support the task. He was chief executive of the Avis car rental company in the United States. Marshall was businessman to the core first and served as member of house of lords. He did not have even graduate degree and did not even go to the university but had learnt the “customer first” mantra in the auto giants like Hertz and AVIS. King named marshal as the airline’s chief executive in 1983.

“The relationship between King and Marshall became as close as that of father and son,” The Daily Mail of London wrote in 2003. With King as of no-nonsense, cost-cutting executive and Marshall leading the charge of reconstructing the airline’s image and revamping  customer service BA had to turn around.  King went meticulously to down size the work force to save money , modernize the fleet to speedup efficiency, eliminating unprofitable routes and entering in to marketing tieups  with foreign national carriers .

Marshall went after opportunities to  attracting customers and restoring morale of  the airline’s diminished work force. The company’s supervisors had even built up reputation as “balcony manages ” and this had to be demolished by Marshal who was strong leader .For initiating and driving change in  a huge organization plagued by bureaucratic muddles needed strong leadership

Virgin Atlantic was emerging to be biggest threat and to the British pride could never tolerate that. BA did some tricks which others  called  as "dirty tricks" campaign to malign Virgin Atlantic which only brought more trouble in huge legal penalties to BA. BA’s worldwide operations and  Change plan included bitter decisions like huge cost cutting, downsizing, aircraft fleet replacement, improved infrastructure (e.g. computerized reservations systems, hub and spoke operations, IT decentralization, competitive pricing, improved terminal facilities including the opening of Terminal 4 at Heathrow, the innovative branding of the airline's classes of service, and delegation of decision making power to line managers. 

Focusing on people management was next task.The performance management system and management bonuses were totally restructured. The emphasis was on contribution to cost cutting,

and profitability. 

The airline engaged in a series of alliances, mergers and acquisitions, including the acquisition of British Caledonian, a step that strengthened the dominant position at London's Heathrow Airport. 

The change efforts were continuous and not one time .It was a complex and comprehensive process that lasted for roughly twelve years and involved a numerous key initiatives and not just few structural changes. 

Marshall had to ride bumpy road in BA when he was handed down  loss of £140 million per year and an airline  which had  earned nickname as   "Bloody Awful" airline. Passenger Associations had rated BA as the number one  airline to be avoided. The attitude of the airline's staff    was not helping as they were all casual and indifferent about the losses .

Even senior manager had the  arrogance to say “We could run a damn fine airline if it was’t for all those bloody passengers.” The biggest challenge for Marshall was redefining and reinforcing British Airway’s business priorities and restoring customer service, as main plank to company's turnaround strategy. 

Marshall determined that the lethargic and conservative attitude and ways of thinking of employees had to change and they had to be made to think differently about their role in British Airways, their jobs, and their day-to-day conduct with customers. One of the main steps taken  in the transformation was the change in organization's culture. 

It was a bold step because while  downsizing headcount by 40%, attempting the  Culture change huge task. A number of retooling initiatives towards a customer handling and cost consciousness initiative by Marshall's  was leading  from the front . His  was not an armchair leadership but  he personally flew hundreds of miles to be with the ground staff, flight crew and cabin crew.  He would travel coach class or off- load himself from the flight based on seat demand for customers. 

He attended nearly every training class in Managing  People First session, His routine  on a Friday afternoon was to attend no- holds-barred question and answer session with the participants, and in case he could not make it he would call for meeting in board room without fail. 

Unlike his predecessors he would sit in the cafeteria to share lunch with staff  and the staff loved him. The culture change initiatives and programs lasted from 1983 to 1995 included the very strong continuous and consistent training efforts at all levels across the organization and every program aimed towards customer handling education in 1995.

Colin Marshall resigned as CEO of British Airways and became Chairman of the Board, replacing Lord King. Robert Ayling was promoted to the CEO job. Under Ailing, the culture change initiatives continued.

 Misfortune reversed and, British Airways financials looked up  to be not only profitable carrier but also to be the most favored carrier from least favored carrier for international travel by business travelers. BA was voted as the dream company that most college graduates would like to work for.  

By 2000, it was the second most admired Airlines company in Europe. These results were not achieved solely due to culture change program that Marshall led, but results came from a systems approach that saw many changes implemented over 1983-1996. 

What worked was a robust change management strategy and execution plan. Hard hitting communication strategy that laid out reasons for the restructuring and privatization of the company to enable escape to the future Strong leadership coupled with effective communication, steered BA through a difficult time that could have otherwise turned to be a disaster .

The changes were not everlasting as BA lost the sharpness of change soon once again to face crisis.

The conclusion from this Change initiative  by BA is that change initiatives have to be multi dimensional,;change cannot be one time effort but