Culture Change at British Airways

Culture change at British Airways
At the start of 1980s British Airways (BA) faced several financial difficulties. A survival plan,
guided by the then chairman Sir John King, had reduced staff from 60,000 to around 38,000
using a combination from voluntary redundancies and natural wastage. Unprofitable routes were
abandoned and surplus assets were sold off. By 1983 the airlines had been returned to
profitability. To ensure longer-term success a transformational change in the way the business
was run was required. The newly appointed chairman, Colin Marshall, embarked on a culture
change to turn the airlines from the one which was operationally driven to the one which was
market led.
BA undertook extensive market research and listened to the ideas and concern of people both
inside and outside the company. This revealed gaps between customer and employee
expectations regarding service delivery. Staff focused on functional and routine aspects of their
jobs while customers expected this as minimum level of service, they also expected warmth,
friendliness and attention to their personal needs. This emphasized the need for a sharpened
focus on customer service.
The strategy adopted by Colin Marshall and corporate managers was to change the values,
practices and relationships throughout the company by creating trust throughout the organization.
This was to be achieved by developing the workforce. In November 1983 BA launched its
‘Putting the Customer First’ campaign supported by a massive commitment to corporate training
and communications. As a part of this the 12,000 BA staff in direct contact with customers, such
as those employed on check-in desks and as cabin crew, went through, a two-day training
program. Entitled ‘Putting People First, the program focused upon individual and actively
involved employees in developing ideas for improving customer service. The program gave
substance to senior management’s notion of service through a considerable investment in time
and money. In addition, the chairman tried to attend every event, thereby emphasizing his visible
commitment. Subsequently the program was extended to staff not involved in direct contact with
customers such as pilots and baggage handlers, using the premise that their customers were other
BA employees. This provided all employees with an emotional context through which they could
respond and change.
In 1984, a new corporate identity for Personnel was introduced and a new Human Resource
Director appointed. As part of this, administrative procedures formerly attached to the personnel
role were developed to line managers. In addition all HR employees were offered a weeklong
residential program, which focused on developing their consultancy skills to manage change.
Other HR interventions such as profit sharing were used to reinforce employee’s feelings of
belonging and involvement.
The high level of commitment by senior management gave a clear message to all employees, but
particularly managers, that they had to support the initiative. This was the most critical
dimension of the change program and necessitated changes in the style of managers and
management. Managers were expected to adopt the new-shared vision and adapt their style of
management from a prevailing domination of roles and procedures to one, which was more open,
visible and dynamic. Training called ‘Managing People First’ was introduce\d in 1985. This
consisted of a one-week program for all 1400 management personnel ‘aimed at removing
internal blockage and converting participants to Marshall’s organizational values – caring,
achievement, creativity, innovation and profit’.
Manager’s adoption of the vision was adopted through a new performance appraisal system for
all managers and rewarded through a new performance related pay system. These emphasized
both of ‘what’ and ‘how’ of managers’ achievements. Thus the changes were not only about
‘caring’. As one manager puts it, ‘Don’t be deluded into thinking the change was about being
nice to each other, it was about effectiveness, performance and survival’. Managers were also
expected to be more visible, a requirement which many managers equated with working longer
hours.
The culture change program was ongoing and supported by further interventions throughout the
decade. In November 1985 the ‘A Day in the Life’ program was launched emphasizing the
benefits of collaborative working. As before, the appearance of the chief executive or a director
was used to show the top-level commitment. A range of other programs followed such as ‘To Be
the Best’ launched in 1987, which focused upon the growing competition and the importance of
delivering excellence in service. Changes in managerial attitudes were undoubtedly achieved.
However, alongside this there was undoubtedly resistance by some employees who treated
programs they attended and messages heard with considerable cynicism. In addition a relatively
high incidence of industrial conflict throughout the 1980s introduces some doubts regarding the
depth of the cultural change.
The 1990s recession, combined with deregulation and the resultant competition in the airlines
industry, forced BA to reexamine its mission. BA’s mission to be ‘Fit for Business’ and to ‘Close
the Gap’ represented the response to this. This had necessitated buying into other airlines to
become a global carrier and, at the same time, continuing to reduce salary costs through a variety
of measures. Thus employees appeared to be receiving mixed messages. On the one hand they
were being asked to improve the quality of services offered. At the same time resources available
were being reduced to lower the costs. In 1991 BA again announced redundancy measures to
deal with over-staffing. Research undertaken at that time suggested that employees did not see
these redundancies as a betrayal of caring company values promoted during the 1980s.
Questions:
a) Identify the major steps taken by British Airways to carry out the process of change.
b) What do you think senior management wished to achieve through the BA culture
change program?
c) Identify the types of resistance felt by the members of the organization and how can
they be overcome?

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