1. With reference to John Kotters eight-stage model of change, what mistakes did BA make in this...

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1. With reference to John Kotter’s eight-stage model of change, what mistakes did BA make in this instance, and what aspects of the change management process did they handle well?

2. How can the union’s response to the introduction of swipe cards for check-in staff be explained from a processual perspective? If those who were managing this change had adopted a processual perspective, what particular issues would have appeared to be more important, and how would they have addressed those issues? 3. Choose one of the contingency frameworks that was introduced in this chapter and carry out a similar assessment. Which aspects of the organizational context of this change were addressed in an appropriate and effective manner? Which context factors were overlooked?

4. In your judgement, is there any one change management approach, or combination of approaches, that provides the best understanding of the swipe card debacle? Why?

5. You are a change management consultant hired to advise BA top management on how to avoid a situation like this happening in the future. What advice will you offer, and on which change implementation perspectives will your advice be based?

The Strike On Friday, July 18, 2003, British Airways (BA) staff in Terminals 1 and 4 at London’s busy Heathrow Airport held a 24-hour wildcat strike. The strike was not officially sanctioned by the trade unions but was a spontaneous action by over 250 check-in staff who walked out at 4 pm. The strike occurred at the start of a peak holiday season weekend, which led to chaotic scenes at Heathrow. Around 60 departing flights were grounded, and over 10,000 passengers were left stranded. The situation was heralded as the worst industrial situation BA had faced since 1997 when a strike was called by its cabin crew. BA’s response was to cancel its services from both terminals, apologize for the disruption, and ask those who were due to fly not to go to the airport as they would be unable to service them. BA also set up a tent outside Heathrow to provide refreshments, and police were called in to manage the crowd. BA was criticized by many American visitors, who were trying to fly back to the United States, for not providing them with sufficient information about what was going on. Staff returned to work on Saturday evening, but the effects of the strike flowed on through the weekend. On Monday, July 21, BA reported that Heathrow was still extremely busy. Their news release said: “There is still a large backlog of more than 1,000 passengers from services cancelled over the weekend. We are doing everything we can to get these passengers away in the next couple of days.” As a result of the strike, BA lost around £40 million and its reputation was severely dented. The strike also came at a time when BA was still recovering from other environmental jolts such as 9/11, the Iraq war, the SARS outbreak, and attacks on its markets from budget airlines. Afterwards, BA revealed that it lost over 100,000 customers as a result of the dispute. The Swipe Cards BA staff were protesting about the introduction of a system for electronic clocking-in that would record when they started and finished work for the day. Staff were concerned that the system would enable managers to manipulate their working patterns and shift hours. LO 10.3–10.5 pal30530_ch10_315-352.indd 342 12/30/15 5:30 PM Chapter 10 Change Management, Processual, and Contingency Approaches 343 The clocking-in system was one small part of a broader restructuring called the Future Size and Shape recovery program. Over the previous two years, this had led to approximately 13,000 (almost one in four) jobs being cut within the airline. As The Economist (2003) noted, the side effects of these cuts were emerging, with delayed departures resulting from a shortage of ground staff at Gatwick and “a high rate of sickness causing the airline to hire in aircraft and crew to fill gaps. Rising absenteeism is a sure sign of stress in an organization that is contracting.” For BA management, introduction of the swipe card system was a way of modernizing BA and “improving the efficient use of staff and resources.” As one BA official said, “We needed to simplify things and bring in the best system to manage people” (Tran, 2003). Staff, however, saw this as a way to radically change their working hours, cut their pay, and demand that they work split shifts. One check-in worker said, “This used to be a job which we loved but we are now at the end of our tether. What comes next? They will probably force us to swap shifts without agreement and all this for less money than working at Tesco” [a supermarket] (Jones, 2003). One commentator argued that “the heart of the issue is that the workforce wants respect”; it was not until the strike that CEO Rod Eddington was aware that “there was a respect deficit to be plugged.” Specifically, staff were concerned that “BA will try to turn them into automata, leaving Heathrow at quiet times of the day only to be brought back at the busiest moments, while not paying any extra for the disturbance. Women, in particular, want to preserve their carefully constructed capacity to balance the demands of work and home” (Hutton, 2003). Although BA denied that the system would be used to make staff change their hours without notice, staff did not accept this promise— wondering why the system was being introduced if that was not the intended use. A union official said, “We know that BA breaks its agreements” (Webster, 2003). Another worker said that the strike was meant to be a “short, sharp shock” for BA: “They would then be able to bring us in any time they wanted, which is just not on, especially for those of us with families” (McGreevy and Johnston, 2003). The Change Process Unions argued that the walkout was triggered when BA senior management abandoned talks over the introduction of swipe cards and announced that they would be imposed with five days’ notice. This unilateral decision by BA, and the lack of consultation with affected staff, were cited as the key reasons for the strike. Even BA’s pilots, who did not oppose a check-in system, were said to be sympathetic with the check-in staff, as they also felt that the implementation of the swipe cards had been mishandled by the airline. One commentator described the change process as a “commercial disaster,” which served as “an important warning about the dangers of management by diktat, certainly, but, more profoundly, about an incipient revolt against the close control and monitoring of our lives and movements that modern information technology enables” (Hutton, 2003). The Economist newspaper argued that it was a mistake to introduce new working practices at the beginning of the summer quarter—when the airline generates most of its revenue. Similarly, The Times (2003) also said that this was a major management blunder: “To pick July, the start of the peak holiday season, to launch an unpopular new clock-in system, is asking for trouble. To push through a scheme without realizing the extent of the resistance by those involved suggests a management aloof from the mood of its employees. And to allow managers to give contradictory statements on the use of the new cards seems guaranteed to foment mistrust.” (Continued) pal30530_ch10_315-352.indd 343 12/30/15 5:30 PM 344 Chapter 10 Change Management, Processual, and Contingency Approaches As Hutton (2003) argued, with 20,000 other BA workers using the swipe card system, “Imposing them after months of inconclusive talks must have seemed—especially given the pressure to contain costs, with the airline set to report its worst ever quarterly loss of £60 million this week—a risk worth taking. It was a massive miscalculation of the workforce’s mood.” This miscalculation was related to staff cynicism and bitterness about the redundancy program that had been conducted, staff fears of a lack of consultation, poor pay rates, and dissatisfaction with management, who would have considerable knowledge on which to act in the future. The Guardian (2003) echoed this viewpoint, noting that “the trigger was undoubtedly the back-handed way BA management at Heathrow tried to force the introduction of swipe cards at exactly the wrong time, when the peak of the summer boom was approaching. They should have known how important it was to approach any potential changes in the working patterns of women juggling with childcare schedules in a very sensitive way.” Rod Eddington, chief executive of BA, acknowledged that it was wrong of senior management to introduce the new clock-in system in the way they did. On BBC Radio, presented with the claim that BA was guilty of “bad management” and “crass stupidity” for not predicting the level of anger to the swipe card, he replied, “With the gift of hindsight, it’s difficult to disagree with you” (Clark, 2003). The Resolution As a result of the walkout, BA’s news release on Tuesday, July 22, said that it would hold talks with representatives from three unions: Amicus MSF, Transport and General Workers Union, and GMB. The introduction of the swipe cards would be delayed until Wednesday, July 23. Following further talks, BA finally announced on July 30 that they had reached agreement with the unions to delay making the swipe card system operational until September 1. They also agreed to a 3 percent pay rise for administrative staff for 2003, not on the basis of introducing the swipe card system, but based on being “confident that the remaining Future Size and Shape cost efficiencies will be delivered.” As one person observed: “You have to ask, how important was this scheme to the future operation of BA in the first place? How much money was it going to save and wouldn’t it be better to wait a few months for discussion to reassure the staff they are not going to get turned over?” (Behar, 2003).