There is nothing wrong with seeking efficiencies. There is nothing wrong with cost cutting. Its all in the way you do it.
There is nothing wrong with having a vision of where you want your company to be in five, ten and twenty years either, in fact I recommend it. Your vision statement should be no more than half a page and use two or three syllable words. No management double speak. Everyone in the company should know what the vision statement is and be asked to subscribe to the vision.
Where is Qantas's vision statement? Where is their mission statement? Where is their rationale for Asian expansion in no more than one A4 page? Where is their risk managment assessment for their Asian expansion? All I hear is managment double speak.
My criticism of Qantas is aimed at Board level. Where is there evidence of good corporate governance? I don't think there is any.
As for new "lean and mean" airlines operating in a different environment, thats B.S. anyone can look "lean and mean" until their fleet starts to require major maintenance and they find that all the functions they outsourced are now costing more than providing them themsleves. As for the different environment thats BS too. Sure their will be Asian expansion - but Asians are not going to give their markets to foriegners like Qantas.
Sure Qantas headquarters can move to Singapore or Alaska for that matter, so what?
The real question is what is Qantas's competitive advantage over other airlines??? What makes it different from any other airline? What is going to make it better than any other airline?? How is this "being better" translate into above average shareholder returns?
These are the critical questions. You need to under stand the answers very well and build them into your vision or you will fail.
My guess is that Dixons focus is on cost cutting for one of two reasons. Either he is a cost cutting fanatic like the guys who ran Email Ltd. into the ground, or he has an ulterior motive - a vision of a new Qantas which he knows that the staff will not share, yet, or perhaps never.
As for the ulterior motive, one way of creating massive business change quickly is to break it. As in the saying "If it aint broke don't fix it". You break things big time then you automatically get a mandate for massive change. The idea is also often cited as the "freeze, unfreeze, then freeze again" principle. If a company suffers massive trauma, then for a time , usually months or perhaps a year or so, you can change anything you like and no one will protest. least of all the fortunate few employees who are left.
If as I suspect, the JP Morgan shareholding is held by one or two high net worth Australian businessmen, who are bent on remaking Qantas the quick and dirty way, all Dixons chest thumping and disdain for his staff and short term revenue effects would make sense.
To put it another way if Kerry Packer had bought into Qantas, I'd guess he would want to keep it very quiet to stop the share price from going up, at least until he and his partners had "got set".
The automatic business strategy that would flow out of such a remaking of Qantas would be to minimise costs and use every possible lever to allow Qantas to maintain the monopoly position in Australian aviation markets it currently enjoys. Owning media outlets makes this a great strategy - one monopoly position effectively supports other monopoly positions.
After all the goal of business is to make high returns and the way to do this is drive out competition, build barriers to entry as high as you can to stop new competitors and sail as close to the trade practices act as you can.
Last edited by Sunfish; 25th Oct 2004 at 07:48.