Thursday 21st April 2005

 
BWIA’s success must be earned
 
 
 
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By Peter Berkeley

BWIA’s leadership and board of directors have failed to provide the Government with a business plan in which it has confidence.

The airline’s future is now in the hands of a business-focused task force, to decide whether it should be a stand alone entity, or an integrated Caribbean airline.

The team of Arthur Lok Jack, William Lucie-Smith, Gervase Warner, Dr Shafeek Sultan-Khan and Dr Terry Farrell is a powerful one, with the talents and competencies required to make a comprehensive assessment and recommendation to the Government.

Theirs is a tall order. Decisions they make will have far-reaching implications for air transport in the Caribbean and Latin America for decades to come.

Assuming the task force recommends a reconstituted BWIA—and I suspect that will be one of the outcomes—here are some imperatives for the airline.

1. Reconstituted leadership

The airline needs leadership of the Herb Kelleher/David Neeleman ilk, both outstanding airline leaders with a knack for managing people.

Herb Kelleher is the legendary leader who has led Southwest through successive years of profitability while the rest of the industry swims in red ink. JetBlue is David Neeleman’s third successful aviation business.

These maverick airline executives energised and invigorated people around visions with the charisma and personality to create passion around their organisations’ futures.

Over the past 30 years, there have been only two successfully sustained airline startups in the United States. The first is Herb Kelleher’s Southwest Airlines which is now the highest-valued airline in the world by market capitalisation. The second is David Neeleman’s JetBlue Airways.

2. Employees first, then customers, then shareholders

In his “BWIA 2003 The New Business Model,” Conrad Aleong stated:

“As management has often stated, ‘one can have the best aircraft in the world, the best route rights, the newest technology, and the most advanced systems and processes, but without the people, you cannot have an airline.’”

But Aleong failed to motivate employees to share his vision of the future.

It should come as no surprise then, that the current BWIA business restructuring mindset is still top-down focused, with calls for—you guessed it—more concessions from its employees and the unions (Trinidad Guardian, March 6).

“BWIA intends to get its employees to accept work rule changes so that productivity is comparable to international airline standards.”

Let’s take a closer look at this item.

First. “Intends to get employees to accept work rule changes?” This language is neither motivating nor participative! Rather, it sets up adversarial relationships from the get go.

Second. “Comparable to international airline standards?” In other words, we will not try to do things that will differentiate BWIA from its competitors! Let’s continue to judge ourselves by failed standards and practices.

An outmoded management mindset stuck in command and control mode is not indicative of the progressive leadership needed to transform the airline.

A note about employee ownership. An interesting phenomenon takes place when employees own a piece of the business. They begin to think about how to improve the business because if the business is successful then they are. If you own it you treat it differently—because it’s yours. You do whatever it takes to make it successful.

The airline should offer employees stock ownership. Given the right leadership, employees will be motivated to increase the value of their shares.

Increased shareholder value comes from increased/improved value to customers, which in turn comes from “valuing” employees.

3. A plan that works

The “plan” submitted for review by the Parliamentary Sub-Committee used all the right buzz terms—redesign the organisation, devise new strategic visions, comprehensive strategies, redesign work processes, increase productivity, efficiency, and quality. So did the 2003 Aleong document.

Despite its shortcomings, the seven-strategy Aleong model laid out a set of goals which could have been enhanced by current leadership over the past 22 months to:

1. Articulate/rearticulate strategic imperatives aimed at accomplishing the vision,

2. Gain commitment from employees to the future of the airline by involving them in the planning process,

3. Define expectations of employees at every level in the organisation, hold each one accountable for results, and communicate, communicate, communicate.

4. Achieve the “bottom line results” of returning value to shareholders from their investment in the airline.

After 22 months, what we have is “reinvention of the strategic wheel.”

4. Government and board leadership

A reconstituted BWIA can be turned around. But it will take more than an infusion of $222 million. It will take resolution to alter the cultural direction of the airline. There’s too much at stake to do otherwise.

1. Terms of reference for the Board of Directors must be redefined, with a focus on accountability.

2. Forward thinking leadership must be installed at the airline that will:

Create an invigorating vision of the future, with strategies for including both employees and the unions as partners, not as adversaries.

Gain employees’ trust, and get them thinking like the 21st century competitors they can be, prepared to successfully defend the airline’s turf against encroaching competition.

Involve employees in the decision-making process, and hold both leaders and employees accountable for delivering results.

Convince the marketplace that the airline truly cares, and that it has transformed itself into a customer-focused airline.

As Aleong stated in his strategy document, “BWIA’s people are its biggest asset.”

If the airline invests in this asset, the asset will take care of winning customers, making shareholder value its top priority, and creating a robust 21st century competitor.

Success is not an entitlement... it must be earned.

No ‘single’ solution

There is no single thread solution to BWIA

BWIA’s future is too heavily intertwined with other economic factors for it to be treated as a stand-alone business issue. This task force therefore has to be more global in its perspective.

What’s needed is a Strategic Air Transport Plan for the Caribbean, with BWIA—or its derivative—as a core component. This plan must have a phased implementation strategy, with directly-related BWIA issues as its top priorities. These include decisions on:

1. Organisational transformation

at the airline (immediate)

This outcome will significantly and directly impact all other task force recommendations.

2. Airline structure/integration

(short term/ongoing)

One airline with regional partnerships and international alliances, or an integrated regional airline with international alliances?

3. Airline routing strategy

(short term/ongoing)

Hub-and-spoke? Point-to-point? A combination? Or is there a more appropriate model?

4. Transforming Caribbean passenger services (immediate/on going)

The airline’s real bread and butter issue, concurrent focus needed with organisational transformation. The Sunday Guardian (April 17th) carried yet another example of inexcusable customer service along the entire BWIA service chain.

5. Regaining Category 1 status

(short term)

Absolutely required if the airline is to become competitively viable.

6. Transforming Caribbean freight

services (short term/on going)

A potential growth area for the airline.

7. Integrated tourism plans for T&T and the Caribbean (short term/on going)

Anthony Hosang’s recent observation that tourism is “a sector showing significant promise” has implications for BWIA and its strategic directions, and the Vision 2020 goal of creating a more diverse economy. Also, Caribbean tourism efforts must be viewed as strategic business alliances, and treated as such.

Peter Berkeley, a national of T&T, is a business transformation consultant who lives in Louisville, Kentucky. He can be contacted at [email protected]

 

 

 

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