In 1981, British Airways (BA) was an inefficient, loss making nationalised company which, had it been in private ownership would probably have been declared bankrupt. A few short years later, effective change management had seen BA become the envy of the global airline industry and a flagship of the then British government’s huge privatisation program.
The architect of this change management was John King, who was appointed chairman in 1981 when the passenger airline was making annual losses of £140 million. By 1989, two years into life as a private company, BA was making over £260 million profits per year. Examining how this change materialised, and the strategies employed by King, provides a change management framework for organisational change.
When organisational restructuring is unavoidable, change management is obligatory
King took on a company that was haemorrhaging money. His change management was sweeping; it needed to be, to be effective. King removed 22,000 employees when streamlining its operations. He hired Colin Marshall as CEO, and he renewed BA’s fleet of aircraft. He also removed unprofitable routes, and made a previously loss making aircraft the very epitome of BA using it as a marketing tool (by guaranteeing a number of upgrades to Concorde in exchange for new corporate accounts opened with BA).
Such widespread and all-encompassing change required a widespread and all-encompassing change management plan.
The first yard on the change management runway
Though the need for change and the type of change required was obvious to the new chairman, King realised that the organisational restructuring would affect every single person associated with the company.
His first action in the change management process was to present reasons for the restructuring, communicating the importance and necessity and putting in place a plan to achieve the goals of organisational change. In the case of BA, the ultimate goal was the privatisation of the company. To get there, King first had to ensure its survival.
King involved the whole organisation in his change management plan, from HR to technology, engineering, aircrews, and individuals. He realised that resolving conflicts and dealing with resistance to change was part of the change management process, following the following eight step change management framework.
Step 1: Create a sense of urgency.
In BA’s case, the urgency was simple to communicate – either change or face extinction. A company cannot continue to lose huge sums every year, even if it is owned by the taxpayer.
Step 2: Communicate vision of the future.
All stakeholders need to understand the vision of change management, buy into it, and then act upon it.
Step 3: Create flexibility for change.
An overly rigid organisation will not be able to change, and resistance will be created by a change revolution rather than a change evolution.
Step 4: Communicate effectively.
Stakeholders need to be communicated to, with change management using a variety of communicative tools. News and information should be communicated effectively, to those affected, and in a timely manner; don’t let the rumour mongers do the job that change management should be undertaking, it will only lead to increased resistance as misinformation rules.
Step 5: Engage all stakeholders.
When stakeholders are involved in the change process, the change can be effected more swiftly and more effectively with less resistance. If restructuring involves job losses, then stakeholders should involve workers’ groups or unions.
Step 6: Ensure the change management is led by leaders.
Change management must be sponsored consistently and supported constantly by managers at all levels. These managers not only convey the message down the line, but also report on feedback and progress (including areas or issues of resistance).
Step 7: Integrate project management with change management.
Strategising change means project implementation. The two will go hand-in-hand, as all stakeholders move toward organisational strategic goals.
Step 8: Cultivate behavioural change.
Put in place coaching, training, and reinforcement processes that instil the new behaviours and cultures required. Not only will this help to propagate effective change management, but also help in long term sustainability and reduce propensity to slip back into old ways.
The three phases of a change management framework
This eight step change management framework is an extension of the recognised three phases of change management. The first phase requires management to recognise the necessity for change, and then to establish the exact nature of the required change as well as its scope.
Change management then leads the change, scheduling through to completion with an agile approach. During this change management phase, leaders will need to deliver:
- A communication plan
- A roadmap for stakeholders to follow
- Training and coaching plans
- A methodology for managing resistance to change
The third and final phase of effective change management is the reinforcement of new processes, practices, procedures, and, most importantly, behaviours. Corrective measures need to be introduced to ensure that new ways of doing things are maintained and built upon.
King took BA from its dire and inefficient, loss-making state to become one of the most successful and profitable airlines in the world. He empowered his people and his organisation through a change management framework which was later employed by Malaysian Airlines when it, too, needed to restructure or die.
A change management framework will help to solidify aims and objectives of change, as well as engage all its stakeholders on the way to a successful and profitable change process, no matter how big or small the scope of the change management project.