I was with a client this morning, who themselves are undergoing a “transformation” and they asked me what I though about all the delays happening in MAS and if it indeed was being caused by unhappy employees.
Now I certainly don’t know the facts that are causing the delays, but I can only give an opinion and these opinions are related to what actually happens when we undertake “deep turnarounds.” A deep turnaround is one where you go into the organization and not just do some “financial re engineering” – which is never sustainable, but where you execute a plan that typically has the following steps to it:
1. Stop the bleeding
2. Improve cash flow
3. Stabilize operations
4. improve current profitability
5. re-engineer processes – to bring down cost and improve efficiency
(all of this is what I term accelerated business improvement, as you want to do it in 18 months not 60)
If you notice, all of the above have to do with the business but anything you do with the business has an impact on people.
The first reality is businesses succeed or fail because of people. It’s people who determine policy, process, hiring, reward, performance assessment, technology requirements etc.
The second reality is, a business fails not because of the people at the bottom but because of the people on top. If you find a lousy subordinate, you will probably find a lousy boss manager above him.
The third reality is those who lost you money are not the ones who are going to make you money and money doesn’t get lost at the bottom of the organization, it gets lost at the top.
When in a deep transformation – people go through phases – there is the SARAH curve – Shock, Anger, Realization, Acceptance then hope. So in any change – no matter how small, the first and second reactions are always shock and anger. The role of the leadership is to persevere and lead the flock to realization, acceptance and hope, then performance really kicks in.
With respect to organizations that are failing or have failed, 99.99999% of the time, there is a very poor, if not, no correlation between what people do and “true performance.” True performance is performance that impacts the bottom line and the balance sheet. When there is no or low correlation, people will use proxies to measure / validate performance and typical proxies are “hard working”, “never takes MC”, “dedicated”, “loyal”, “good person” etc.
In a turnaround, what happens is that these long held proxies of performance get replaced with hard numbers… like performance measures, service levels, turnaround times etc…. There are 2 outcomes from here:
1. The organization as a whole realize that with aligned processes , there are far too many people required. And it is not any fault of these people that they have become surplus. It is the fault of management for not having carefully managed the numbers over time. And when the organization starts to reduce headcount – MSS/VSS etc… the winners are the people who get the package. The losers are those who don’t and we encounter “survivors syndrome.” A syndrome that afflict people who get left behind in the organization and they will pull together and push back against management. Survivors do carry quite a bit of resentment, after all if my dead wood colleauge could get RM500,000 in MSS money, me who is hard working and performing can never dream of that sort of compensation or bonuses….so i really do resent it.
2. In all change process people go through GRASS – Guilt, Anger, Resentment, Stress and Self Absorption… medical bills increase. MC’s go up, people start looking for jobs outside… and as the proxies of performance change people feel that that are being marginalized as the familiar is being replaced with the unfamiliar. These are all typical responses to change and we just have to work through it. Soon enough as “the new” sets in people let go of the past and get on with their lives…..
Just think of how people deal with traumatic events in life – deaqth of a loved one, break up of a relationship – first we have to grieve, to let go, to have an ENDING, after which we go through a phase where we are sort of neither here nor there – in the wilderness and finally we cone to grips with what has happened and we start out NEW BEGINNING. Every person, in every change process goes through the same, only difference is the duration it takes for people to get through it. Some sooner, some later but we cannot ignore it.
As all of these happens, the role of the UNION is not to be underestimated.. Many a time I tell my CEO friends that their Union Leaders actually have more representational rights then they have as CEO. After all CEO’s are selected by the Board and imposed onto the organization (most undemocratic) but Union Leaders are elected by the people to represent them.
Unions will always fight 2 battles:
1. the will always fight to protect what they deem as in the best interest of the people whom they represent and
2. they will fight to demonstrate the legitimacy of the UNION itself, as they know, way back in their minds that unless they are part of the success, they will be seen as a failure. To align with management at the initial stage is difficult as the members will see them as having been bought, and to forever continue to resist – members will see them as being counter productive. Their challenge is to seek balance.
Anyway, back to MAS
MAS has been working hard on so many front’s: Sold the building, worked on route profitability, MSS, new reservation systems, new people, new ways of working, etc. For the degree and depth of change that is been driven through, the people in MAS are going through a lot. Some will come around fairly quickly, some will take a while but in the end results will speak for itself.
I think passenger who have paid for their tickets have absolute reason to be mad and I think irrespective of what changes are going on in MAS, they must respond accordingly. But I do recognize that these things are bound to happen simply because of how people respond to change. At least Idris Jala has come out to explain and apologised for the delays, which is indeed a rare occurrence in Malaysia , that is for people at the top to take accountability.
From an outsiders point of view, I am not surprised at any of the responses and reactions thus far. As I watch all the on goigns in the GLC – Idris gets top marks. Not because he is any cleverer then the rest. God forbid, he is not even a product of Cambridge not Oxford and neither is he an accountant. The reason for his success is he has been well trained on the process of how to trun things around. End of the day is all boils down to having the right process.
Turn arounds and transformation have such well established practices, all we need to do is find the people who know it, understand it and the stomach to do it to come fix our companies. End of the day, not any person can do turnarounds as they key is having the stomach to do it. Here are some more notable turnaround artist and if you study what they have done, they and Idris are all working of the same play book.
Carlos Ghosn – Nissan, Ken Chennaut – AMEX, – LOU GERSTNER – IBM , John Reed – CITIBANK……