Alan Joyce Is No Ronald Reagan
I hope you enjoy the latest Lamplighter e-newsletter and welcome your comments as always.
Alan Joyce is no Ronald Reagan
If he thought he was pulling a ‘Ronald Reagan’ and busting the unions over the weekend, Alan Joyce was way off the mark.
In 1981, within his first year as US President, Ronald Reagan – himself an ex-union president – faced off against the US government employees’ Professional Air Traffic Controllers Organization (PATCO). After having been granted several concessions during salary negotiations and significant pay rises, the Union stubbornly upped the stakes in their claims and demanded incredible increases in salaries, far above claims by other federal employees. Their ultimate boss was US President Ronald Reagan, whom PATCO had backed during his election campaign.
Under US Federal Law, PATCO declared an illegal strike. Giving them 48 hours warning, again, under US Federal Law, President Reagan warned them that if they did not return to work and stop holding the nation’s airways to ransom that every striking air controller would be fired. This was all legal and on the books. The Union didn’t expect a President, however, to follow through with this longstanding law. After only 1,300 of 13,000 controllers returned to work, Reagan promptly kept his promise and sacked the rest and then decertified the union.
It took a decade for the US Air Traffic Control system to recover, but it meant that the union did not hold the nation to ransom.
Alan Joyce is no Ronald Reagan. By presumptuously suspending all international Qantas flights over the weekend, Qantas CEO Alan Joyce did not come across as a hero but as someone deliberately intent on harming his customers and the international reputation of one of the world’s most respected airlines in a juvenile standoff.
Were the unions at fault? Undoubtedly there were legitimate grievances against various unions. Were the management also at fault? To not be able to negotiate these issues and be forced back into the skies by the Australian Federal government points to a gross inability to manage the prime asset of Qantas – its consistently outstanding engineers, pilots and various support personnel. This is a gross failure of the CEO and Board and his Upper Management – no matter what excuses they give.
Alan Joyce may well be angling for offshoring more of Qantas operations, complaining that he can’t compete, but perhaps the problem is more poor management. The US’s Southwest Airlines handles twice as many passengers as Qantas every year, runs twice the planes, generates almost as much revenue and continues to be a more profitable enterprise without offshoring all of its operations (it is a US domestic carrier of course). Plus it has legendary customer service stories. So where is the ‘genius’ management crowed about of Alan Joyce? This grounding may well be his tactic to achieve his goal, but it will not, as he has stated, be easy for him to overcome this kick to consumers.
By grounding services, Joyce has painted everybody with the same brush – all employees and customers have become the enemy who must be punished. That’s not good management.
The real winners here are carriers such as Virgin Australia. Returning from Sydney the previous weekend, one of the stewards apologised to my family and I for the fact that the plane did not have backseat video players and handed us portable ones instead. He explained that, in fact, the plane had been in the middle of an interior refurbishment – we could see that our chairs were old and their new (and much more comfortable) chairs commenced in the row in front of us.
The steward spoke at length with us about the reasons: Virgin was increasing their flights due to the ongoing Qantas action, they were bringing out planes that had been rotated in for refurbishment and putting on extra flights, they were attempting to ensure a good experience for all passengers as they continue to upgrade their fleet and their standards, etc. etc. Here’s an organisation teaching business literacy to their staff. (And they were outstanding in accommodating our special needs child). I wouldn’t be surprised if they practised open book management, given his knowledge of the business imperatives at work.
We will be using Virgin again and avoiding Qantas.
The takeaways from all of this?
- Work with all your people – employees and customers – to achieve satisfactory outcomes. Communicate throughout the whole process and seek the best interests of all parties involved.
- Stripping companies of resources is usually only good for short-term growth. It is the antithesis of building an outstanding organisation.
- Creating outstanding companies does not rely on the hackneyed management practice of ‘outsourcing’ and ‘offshoring’ every major business need. That’s just lazy, short-term management (yes, I understand that sometimes it's the best choice for all, but do the hard work first). Don’t pretend that you’re a genius for getting sweatshops to do all your work and reselling it at a margin. Pretty soon those ‘offshore’ companies will be turning around and dictating terms to you. Determine what your client needs and provide the best value at a decent operating profit.
- Unions, employees and managers must all work together to create outstanding value for customers who want and appreciate it. That’s the key to great product and is ultimately in everyone’s best interest. It’s not in the union’s best interest for the company to go broke, nor is it in management’s best interest to disenfranchise its staff.
- In business, another company’s mess may be your opportunity – if you are prepared, have spare capacity and the right people to deliver.
Alan Joyce may be making his short-term bonus and objectives this year – and that’s good for him, but not for Australia nor, particularly, for international air travel. He’s no Ronald Reagan.
Authentic Speaking® - Nov 7-8 2011 Workshop
Our last Authentic Speaking® workshop for 2011 is on Nov 7-8. We have just 2 spaces left.
Visit www.authenticspeaking.com.au for workshop details or email email@example.com to register.
Rotary Productivity-Driven Leadership Breakfast Presentation
I will be speaking at the Rotary Club in Crawley WA on Nov 17 on the topic of "Productivity-Driven Leadership" during their breakfast meeting.
Rotary Crawley is one of the most dynamic Rotary Clubs in Western Australia, with a drive for developing service, leadership, business and career results for its members. The Club has been very active in bringing on board a whole host of younger professionals and has a very strong reputation for bringing in well known speakers and support programs as it fulfills the Rotary Mission to serve the community.
You can find more details on the Rotary site at www.rotarycrawley.org.au
Personally Speaking - New South Wales shouldn't keep it all to themselves
My family recently returned from an extended trip down the SouthEast coast of New South Wales. With gorgeous cliffs, mountains, lakes and beaches and small towns filled with great restaurants, shops and friendly people around every corner, it's a wonder why they keep it all to themselves.
Her Majesty Queen Elizabeth II commented on the 'idyllic' setting of the Swan River where she farewelled the Australian people last weekend, but I think Australia is blessed with many such idyllic settings. As my wife said, each part of the world has its own special beauty. You just have to take some moments to appreciate it.
Thanks for your comments.