Change Management:British Airways
Business Leaders on Managing Organizational Change: the case of British Airways
One of the leading airlines company in the world is British Airways. There mission of being the undisputed leader in world travel was realized with the growth trend that the company has been experiencing. In 2002, British Airways recorded revenues of ₤ 8,340 million and only ₤ 110 million losses ( 2001-02). The size of their fleet also exemplifies the efforts being exerted by the company to ensure their position in the industry. Currently, they have 360 aircrafts flying to 270 destinations in 97 countries.
However, the rise to success of the British Airways is like any other company. It experienced many trials that threatened to hinder their growth. One of the severely felt obstacles that came upon their ways was a result of political conflict between countries. The September 11 bombing, revived the fear for security of many people. This resulted to the decline of people wishing to travel for fear of safety. In turn, the number of demand for airline services was affected. Even big airline companies, such as British Airways felt the effects of the world events on their business.
Because of the recession in the airline industry, many airline companies filed for bankruptcy while others resorted to downsizing. British Airways was one of the companies who decide to cut down on their expenses being cutting down on their workforce. According to an article published in the (2002), between august 2001 and March 2004, British Airways planned to reduce their workforce by 23 percent or around 13,000 jobs. The situation being faced by the airline industry in general was still gloomy in 2003 with the threats of the Iraqi war.
During troubled times, companies turn to corporate to lead them out of the dark. This means that companies are putting the fate of the whole organization upon the decisions of the leaders. Leaders are expected to be on top of their game most especially when things are not looking good for the business. It is said that the true capacity of a leader to lead is best displayed during critical times. These raise questions of what skills or behaviors should leaders’ posses in order to take their followers and led them down the best possible path? Ultimately, it is important to determine of the perceived skills and behaviors that leaders ought to have do contribute to the success of the business organization.
The following sections of this paper will be investigating the leadership theories through literature and link them with the actual leadership shown by two people, who at one point or another, took the captainship of the British Airways – . The success or failure of the decisions made by will be the basis of the concluding the skills and behaviors that leaders ought to have.
In order for the paper to evaluate the leadership traits exhibited by , it is important to discuss the various leadership theories available through previous or related literature. This will allow the paper to present the recognized leadership theories and formulate the criteria for evaluating the performance and leadership of . In addition, it is important to determine what kind of leadership is appropriate to given situation, participative or directive; in order to verify the set of skills needed, since the two kinds of leadership requires different sets of skills.
Trait Leadership Theory
Leaders are also ordinary people. There are no immediately observable identifiers distinguishing a leader from a follower. (1996) added that others have not found any differences in terms of characteristics between leaders and followers. On the contrary, many books tackling the issue of leadership points towards the direction of set traits that needs to be acquired in order to become effective leaders.
In an article written by for the (1989), he enumerated fourteen leadership traits. The traits were based on the study of a huge number of North American leaders. The list included:
- Action oriented judgment
- Capacity to motivate people
- Task competence
- Trustworthiness, etc.
In the same light, (1983) identified four traits by which leaders can achieve success or failure. The trait was identified to be emotional stability. Leaders should be able to maintain composure most especially during stressful times. Confidence and predictability can strengthen that leaders know what they are doing, making them fit for their position. Admitting error is the second trait. A good leader must be able to practice criticism and self-criticism. Doing will so will allow them to see problem immediately. However, on top of being able to pinpoint problem areas, leaders must be able to accept the existence of such problems most especially if the problems were results of their own doings. This will allow them to attack the issues systematically since their energies will be spent on fixing the problem rather than covering their mistakes. The third trait is good interpersonal skills. Leaders should be able make others see their visions; they must be able to communicate not only to their subordinates but to their superiors as well. However, the actions carried-put while coaxing others to realize the potentials of their ideas must not be coercive. The last trait is extensiveness of intelligence. It is advantageous, both for the leader and the company, if the leaders posses expertise over a wide-range of areas. However, intelligence in this case is more than just I.Q. It also pertains to the leaders’ ability to keep an open mind to allow the processing of alternatives.
The article by arrived at a conclusion that some qualities showed that a leader in a given situation could actually lead in another. However, these kinds of analysis lack one important ingredient. Researchers utilizing the concept of a set trait often assume that people possessing these traits will be effective leader no matter what the situations are. If this is the case then, it can be said they those researchers believe that military leadership is applicable in a school setting. The minimization of the impact of the situation of on the person’s capacity to lead can be disastrous. It has been stated in the previous section that a match between the leaders’ motivations and situations are factors to be considered in a project’s success.
Behavioral Leadership Theory
There was a big leap from trait theory to behavioral theory. Behavioral theories focuses on what the leaders can actually do instead of what hey can possibly do. During the 1950s to 1960s, analysis leadership instead of leaders was the prevailing approach. Behavioral patterns were divided, categorized and labeled as styles ( 2001). This became a widely accepted activity in management training and paved the way for the development of Managerial Grid (1964; 1978). The four main styles that stemmed from behavioral theories are concern for task, people, directive and participative leadership.
Concern for task pertains on the leaders’ concentration on achieving the objectives of the project. Their decisions are geared towards the development of programs that would allow the organization to meet high levels of productivity. Organizing people, under the concern for task style, is more about ensuring coordination to complete the project rather than establishing long-term personal relationships.
In the concern for people style, leaders more geared towards the welfare of the people working on the project. Leaders see that their followers are more than just units of production. The followers are seen as integral cogs in maintaining the organization’s clockwork. Leaders’ influenced by behavioral patterns under the concern for people style make sure that their followers’ needs are met, their interests are stimulated and conflicts are resolved. In so doing, the productivity of the people involved in the project will increase.
A leader whose decisions are autocratic in nature characterizes directive Leadership. These kinds of leaders tend to make the decisions without consulting their followers. In turn, followers, in a directive leadership, have the responsibility to follow the decisions handed to them by their leaders.
On the other hand, participative leadership is more democratic than the directive style. According to (1996), in a participative leadership, the decision making process is shared with the followers. The ideas and thoughts of the followers are being considered and integrated into the decision to be implemented. This style is like grass rooting. Leaders talk with their followers in order to identify the source of the problem. Then the followers’ will be asked for suggestions on how to approach the conflict. Afterwards, the leaders will evaluate the feasibility of the suggestions. In addition, appropriate ones will be incorporated into the final draft of the decision. This style also lessens the burden that leaders are carrying. In addition, followers can truly feel and see that they are being considered are part of the organization.
It can be observed that two out of the four styles can be contrasted with the other two, directive vs. participative (, 1964) and concern for task vs. concern for people (1960). However, as in the case of traits leadership theory, the setting where the styles will be used must be taken into consideration. The situations, once again, must be determined in order for the appropriate style to be selected for implementation.
Leadership within British Airways
The British Airways experienced leadership and change management during the term of as the company’s chairperson in 1981. Upon filling the office, recognized the effects of politics within the company on the efficiency of their operations. With this, decided to restructure the British Airways. He justified the restructuring with the nearing privatization of the company as well as making it more profitable. As a result, saw it necessary to cut down on costs by cutting down their workforce from 58,000 to 38,000. Along with appointed CEO resolved issues with in the company and thus prepared it for privatization. The programs that King and Marshall implemented during their term, focused on the management of the change that the company was to face. Because of their efficient leadership and change management, the British Airways was able to cross the boundaries between loss-making making with poor customer service image to being a trademark of innovation and profitability.
However, when retired and was replaced by things started to turn for the worse for British Airways. This is despite the fact that continued the programs of his predecessors. How could it have happened that failed in what King succeeded in doing? Are there certain aspects that overlooked that eventually led to his forced resignation in 2000? This are some of the questions that the next section of the paper will attempt to answer.
When took over the position of CEO for British Airways in 2000, he believed that the company was too complacent and that this attitude affects the operation of the whole organization. As such, he recommended to the board that people ought to be more open and that they have to do what they say. He introduced the daily TV broadcast, which update employees about company news and issues. This eliminated the proliferation of rumor mills.
However, only six months after making the connection with the employees, ailing announced that he would be asking 5000 volunteers to resign from their posts in the next 18 months (2003). In line with this, he also announced that he would be replacing the volunteers with more flexible and skilled new hires. This announcement resulted in the angry reactions from the employees. The Business Efficiency Programs aimed at outsourcing as a cost cutting measure aggravated the situation (2003). In order to appease the trade union, British Airways agreed to meet with them half-way. However, the resolution of the problem with the trade union was replaced by a three-day strike by the BASSA. This affected the operations and thus the profit of the company.
The events that transpired between and the employees of British Airways resulted to the decrease of the employees’ morale. They felt that they were not included in the plans made by . Since the motivation of the employees became low, there job performance reflected their sentiments. Customers started noticing the staffs are grumpy. When customers were fed up with the kind of service that the airline company was giving them, they decided to switch. In addition, the employees were constantly suspecting the programs or changes that wanted to implement from then on. This meant that it would be difficult for to get the cooperation of the employees and thus changes will be resisted more than usual.
These events proved that failed to include one important aspect to the decisions that he made. did not lead his followers towards the path that he wanted to take. This means that used the directive style as per the behavioral leadership theory, where he would just give orders to his followers and expects them to follow them whole-heartedly. This is the problem with directive style of leadership. It must be recognized the culture of the workforce must be taken into consideration when implementing the directive leadership style.
For example, in Hong Kong the directive style of leader works. Given the culture of Hong Kong, it has been noted that the appropriate style of leadership is directive. It was acknowledged by (2000) that in Hong Kong’s situation, the use of the directive style of leadership can produce favorable results. The use of directive style of leadership can be trace in the country’s history, this maybe the reason why its people work better under this style of supervision. Since following directive leadership has already been imbedded in the people’s culture, the attempt of managers to implement participative leadership can be greeted with resistance.
In the case of British Airways, there workforce it composed of people fueled by independence and freedom of choice as dictated by their culture. This means that if encouraged the employees to part take in the decision making process by soliciting their ideas, then the employees would feel that they are included in the programs being implemented by . Thus, the employees will support the implementation of the changes. failure to consider the sentiments of the employees became his weakness. Even though, intentions were for the good of the company, he failed to make the members of the organization feel that they are indeed part of the company. As such, they felt that they do not have the obligation to help out.
When was forced to resign from his post, replaced him. Given the events that happened before the resignation of , it became task to improve the morale of the employees to improve the job performance (2003). recognized the importance of the individuals that make-up the business organization. As such, he found it necessary to listen to what they have to say about the issues currently hunting the business.
The same problems were still present when took charge. The main concern was how to be cost efficient in order for the airline company to survive the recession brought about by terrorism. As such, also needed to lay people off. However, the approach that he used was different from that of did not attempt to cloud the fact that people will be fired by saying that he will be asking people to volunteer. The employees were told about the need to fire people and the situation was explained. In addition, Christmas bonus for 36,000 employees were eliminated. The same approach was used.
This suggests that relied on the power of communication and not just information. He communicated with his followers to better explain the situation and make them understand were all of the actions being taken were leading to . By communicating, dialogues were opened and all of the parties involved were able to air their sides and give suggestions or explanation. Through, communication cloudy details were clear and thus suspicions were eliminated.
The same approach was seen in the case of the . The problem that Lonely Planet faced was the lack of direction and structure. became the instrument for putting the company in order to maximize the growth that they were experiencing. It immediately became clear to Steve that the company needs a mission statement (1999). In order to do this he solicited the help of the employees in formulating a mission statement that would best showcase the company. As a result, the mission statement was the sentiments of the collective rather than one man.
In addition to the participative leadership style, it can be stated that was also a transformational leader. Based on the discussion of transformational leadership in the previous section of the paper, it was mentioned that transformational leaders have the capacity affect their follower so that the decision made will be passed down and accepted by the followers. In the case of and the British Airways, the former was able to influence the employees of the company in such a way that they were able to see the benefits of the actions being taken by As such, they accepted and respected the decisions made.
The ability of to put the employees opinions and sentiments into consideration became his strength during turbulent times for the whole industry. This suggests that he believed in the power of collective action where all of the members of the organization work together to achieve the objectives of the organization.
People have different approaches when it comes to leading others. Leaders are motivated by different factors. This means that even with the same goals and conditions, two leaders can produce entirely different results. The varying results depend upon the leader style to be implemented, Included in this is the handling and positioning of the employees of the organization. This is supported by the examples of British Airways, Lonely planet and Hong Kong based businesses as stated in the paper.
Leaders must bear in mind that they are given the position to guide their followers. This means that they must be able to recognize the power that their followers hold, since in actuality the followers are the ones who will be working towards the realization of the goal. Therefore, leaders must communicate to their followers in order to know their sentiments and their motivations. This will help the leader to utilize the best possible leadership style to suit that situation and thus provide the best possible result for the benefits of all parties involved.