neville_nobody
25th Nov 2007, 04:57
Fyfe Rewrites the Tune at ANZ
Since taking over leadership of Air New Zealand in late 2005, Rob Fyfe has worked tirelessly on improving company culture and if that means donning an apron and serving drinks, he's ready and willing.
By Geoffrey Thomas
Aukland
Air Transport World, September 2007, p.60
NEXT TIME YOU'RE ON AN AIR NEW Zealand flight and the inflight service is a bit slow, it may be because the carrier's executives are engaged with passengers about everything from football to politicswhile serving them. The born-again airline, winner of ATW's 2005 Phoenix Award, is rewriting the management relations book, with executives rolling up sleeves and working side-by-side with staff on a regular basis.
Every month, CEO Rob Fyfe and the rest of ANZ's top executives don flight attendant uniforms and serve passengers coffee or perhaps a fine New Zealand Sauvignon Blanc. Alternatively, they may spend a day manning the check-in counters or loading baggage. And while they are doing that, they are reinforcing Charles Darwin's theory that "it is not the strongest of the species that survive nor the most intelligent but the ones most responsive to change," for they are completely changing the way management deals with airline staff here.
ANZ has made an extraordinary journey since the bleak days of 2001 when it nearly failed, and it has been built on compassion for and interaction with staff, initially under former CEO Ralph Norris (ATW, 10/04, p. 26) and since October 2005 under Fyfe. Norris reversed a long path of noninvestment and re-inspired employees by de-emphasizing the focus on shareholder returns that had characterized the era during which Brierley Investments controlled ANZ.
When Norris left for Australia's Commonwealth Bank two years ago, many were concerned that the culture he had inculcated would disappear. Instead, Fyfe is taking his initiatives to a new dimension. As with his predecessor, inspiration of staff is high on Fyfe's radar, hence the decision to work the line. "The feedback has been stunning," he says.
At the moment, six executives are checked out for cabin duties and the rest will be endorsed by Dec. 31. Fyfe is extending the duty roster to the ramp as well. And while the executive team is finding out what happens at the coalface, every month one staff member spends a day with the CEO. "That will include sitting in on an executive briefing and possibly even a lunch with a politician. They go everywhere with me for the entire day," he explains. That program has been extended to other senior executives.
The result? ANZ is now the most admired brand in the country. The numbers are extremely impressive. According to a recent survey by UK-based TNS Global Research, the percentage of customers who would recommend the airline has grown from a paltry 44% in 2004 across the international network to a massive 90% last November. Those recommendations are paying off, with ANZ now the No. 1 carrier on all its major routes except Hong Kong, where it sits in second place with 40%. Furthermore, market share is going up on all routes.
People Brand
"Our people are our brand" is the way Fyfe describes it and every month or so he hosts a staff barbecue for charity on the verandah outside the open-plan executive offices. Every week he sends a personal e-mail to all staff bringing them up to date with the latest news and sharing customer feedback with them.
While he says these tasks are delightful, he also fronts the tough ones and recalls a difficult confrontation with engineering staff that were facing possible redundancy. "Initially, the meeting was mostly about finger-pointing at me, but several hours later it was a handshake and an acknowledgement that I had fronted and talked through the issues," he explains. While restructuring results aren't always the way staff would like them, he says he has a responsibility to get the economics right or "far more jobs would be lost."
ANZ has faced major problems with engineering in two areas. For years the company, owing to lack of investment, had a large maintenance burden keeping dated aircraft in the air. With brand-new A320s and 777s now in the fleet, the maintenance workload has plummeted. That situation has been compounded by the dramatic rise in the NZ dollar that has all but wiped out the country's cost advantage. The two scenarios have meant major layoffs and restructuring of the maintenance division.
Fyfe also had challenges with ramp staff because required roster changes wiped out many moonlighting jobs. However, workers now contact him directly to sort out problems. In one case, a flight attendant phoned him late on a Friday over a roster issue because she couldn't get time off to appear in one of the airline's TV commercials. "As it happened, it was too late to rearrange shifts but she was confident that she could call me," he says proudly.
Meanwhile, ANZ is getting staff involved in marketing the airline and this is paying massive dividends, say analysts. It recently launched a daily seat sale page for its website called "grab a seat." Rather than spend millions on advertising, it ran a competition among the staff to see who could come up with the most innovative marketing campaign. One group devised hotel flyers for guest pillows, another put up posters with window washers and yet another developed a clever jingle. The result? Daily website hits went from 40,000 to 130,000 in one year and ANZ sells about 1,200 empty seats each day at fares from NZ$30.
Fyfe's focus is to have staff be themselves. "We want them to learn the manual, then throw it away. New Zealanders are known for their warmth and friendliness and we want them to embrace their personalities and exhibit their legendary can-do attitude," he says. "I don't care if they serve the bottle of wine without the label in the right place as long as they do it with a smile and warmth."
Empowering Staff
This emphasis on encouraging staff to take initiative was illustrated last year on a flight from Christchurch to Invercargill on the southern tip of NZ. Onboard were the parents of a car accident victim who was being taken to the hospital in Invercargill. As the plane was about to take off, news came through to the pilots that because of the extent of the girl's injuries she would be taken to Dunedin instead. Rather than returning to the terminal where the distraught parents would have a 2-hr. wait for the next Dunedin-bound plane, the pilots elected to make an unscheduled stop at Dunedin. Fyfe says the fellow passengers were only too happy to be part of a compassionate diversion and it only made them 30 min. late. By the end of the day the aircraft was back on schedule. "That's what this airline is all about," he says.
And the examples of initiative spread right across the network. Recently a Canadian passenger passed away on a flight from Auckland to Los Angeles and the station manager at LAX took the distressed wife home with her for dinner to comfort her before she continued the journey to Canada.
A more lighthearted example involved a staff member who works in Airline Operations and Planning. He drove to a supermarket to purchase a particular sauce after learning that a member of a world-famous band, who was on a charter flight, liked to have it when he traveled.
On another occasion, a school group and teacher traveling from the US to Australia had an unplanned stopover in Auckland when one of the group became unwell and needed to go to the hospital. This occurred in the middle of the night and the group had nowhere to stay, so an ANZ flight service manager invited them to stay at his home and spent the following day looking after them, including rebooking flights, getting a medical clearance and taking them out to the Sky Tower and Mt. Eden for sightseeing.
Possibly the greatest challenge for airline management today is to convince staff of the need for change made far more difficult when management is not prepared to lead by example. At ANZ, one only has to look at Fyfe's desk, which is not nearly as flashy as most airline CEOs' receptionist desks, to appreciate how seriously the company takes the lead. The management floor has no doors and there are huge beanbag chairs in a central forum area for brainstorming sessions.
Surveys have shown that another reason for resistance to change is that although employees agree change is needed, they don't believe they themselves need to change. At many airlines, management is leery of taking on entrenched union positions and instead is hoping that the good times might return.
ANZ's staff initiatives are paying off handsomely. An airline of last resort in 2001 has become the carrier of first choice almost wherever it operates. Staff morale has soared, passengers are returning in droves, yield is up nearly 6% in the past two years, and in the six months to Dec. 31 net profit soared 61% on revenue growth of 12%. And yes, the shareholders have been taken care of, with earnings per share up 60% in the past year.
Since taking over leadership of Air New Zealand in late 2005, Rob Fyfe has worked tirelessly on improving company culture and if that means donning an apron and serving drinks, he's ready and willing.
By Geoffrey Thomas
Aukland
Air Transport World, September 2007, p.60
NEXT TIME YOU'RE ON AN AIR NEW Zealand flight and the inflight service is a bit slow, it may be because the carrier's executives are engaged with passengers about everything from football to politicswhile serving them. The born-again airline, winner of ATW's 2005 Phoenix Award, is rewriting the management relations book, with executives rolling up sleeves and working side-by-side with staff on a regular basis.
Every month, CEO Rob Fyfe and the rest of ANZ's top executives don flight attendant uniforms and serve passengers coffee or perhaps a fine New Zealand Sauvignon Blanc. Alternatively, they may spend a day manning the check-in counters or loading baggage. And while they are doing that, they are reinforcing Charles Darwin's theory that "it is not the strongest of the species that survive nor the most intelligent but the ones most responsive to change," for they are completely changing the way management deals with airline staff here.
ANZ has made an extraordinary journey since the bleak days of 2001 when it nearly failed, and it has been built on compassion for and interaction with staff, initially under former CEO Ralph Norris (ATW, 10/04, p. 26) and since October 2005 under Fyfe. Norris reversed a long path of noninvestment and re-inspired employees by de-emphasizing the focus on shareholder returns that had characterized the era during which Brierley Investments controlled ANZ.
When Norris left for Australia's Commonwealth Bank two years ago, many were concerned that the culture he had inculcated would disappear. Instead, Fyfe is taking his initiatives to a new dimension. As with his predecessor, inspiration of staff is high on Fyfe's radar, hence the decision to work the line. "The feedback has been stunning," he says.
At the moment, six executives are checked out for cabin duties and the rest will be endorsed by Dec. 31. Fyfe is extending the duty roster to the ramp as well. And while the executive team is finding out what happens at the coalface, every month one staff member spends a day with the CEO. "That will include sitting in on an executive briefing and possibly even a lunch with a politician. They go everywhere with me for the entire day," he explains. That program has been extended to other senior executives.
The result? ANZ is now the most admired brand in the country. The numbers are extremely impressive. According to a recent survey by UK-based TNS Global Research, the percentage of customers who would recommend the airline has grown from a paltry 44% in 2004 across the international network to a massive 90% last November. Those recommendations are paying off, with ANZ now the No. 1 carrier on all its major routes except Hong Kong, where it sits in second place with 40%. Furthermore, market share is going up on all routes.
People Brand
"Our people are our brand" is the way Fyfe describes it and every month or so he hosts a staff barbecue for charity on the verandah outside the open-plan executive offices. Every week he sends a personal e-mail to all staff bringing them up to date with the latest news and sharing customer feedback with them.
While he says these tasks are delightful, he also fronts the tough ones and recalls a difficult confrontation with engineering staff that were facing possible redundancy. "Initially, the meeting was mostly about finger-pointing at me, but several hours later it was a handshake and an acknowledgement that I had fronted and talked through the issues," he explains. While restructuring results aren't always the way staff would like them, he says he has a responsibility to get the economics right or "far more jobs would be lost."
ANZ has faced major problems with engineering in two areas. For years the company, owing to lack of investment, had a large maintenance burden keeping dated aircraft in the air. With brand-new A320s and 777s now in the fleet, the maintenance workload has plummeted. That situation has been compounded by the dramatic rise in the NZ dollar that has all but wiped out the country's cost advantage. The two scenarios have meant major layoffs and restructuring of the maintenance division.
Fyfe also had challenges with ramp staff because required roster changes wiped out many moonlighting jobs. However, workers now contact him directly to sort out problems. In one case, a flight attendant phoned him late on a Friday over a roster issue because she couldn't get time off to appear in one of the airline's TV commercials. "As it happened, it was too late to rearrange shifts but she was confident that she could call me," he says proudly.
Meanwhile, ANZ is getting staff involved in marketing the airline and this is paying massive dividends, say analysts. It recently launched a daily seat sale page for its website called "grab a seat." Rather than spend millions on advertising, it ran a competition among the staff to see who could come up with the most innovative marketing campaign. One group devised hotel flyers for guest pillows, another put up posters with window washers and yet another developed a clever jingle. The result? Daily website hits went from 40,000 to 130,000 in one year and ANZ sells about 1,200 empty seats each day at fares from NZ$30.
Fyfe's focus is to have staff be themselves. "We want them to learn the manual, then throw it away. New Zealanders are known for their warmth and friendliness and we want them to embrace their personalities and exhibit their legendary can-do attitude," he says. "I don't care if they serve the bottle of wine without the label in the right place as long as they do it with a smile and warmth."
Empowering Staff
This emphasis on encouraging staff to take initiative was illustrated last year on a flight from Christchurch to Invercargill on the southern tip of NZ. Onboard were the parents of a car accident victim who was being taken to the hospital in Invercargill. As the plane was about to take off, news came through to the pilots that because of the extent of the girl's injuries she would be taken to Dunedin instead. Rather than returning to the terminal where the distraught parents would have a 2-hr. wait for the next Dunedin-bound plane, the pilots elected to make an unscheduled stop at Dunedin. Fyfe says the fellow passengers were only too happy to be part of a compassionate diversion and it only made them 30 min. late. By the end of the day the aircraft was back on schedule. "That's what this airline is all about," he says.
And the examples of initiative spread right across the network. Recently a Canadian passenger passed away on a flight from Auckland to Los Angeles and the station manager at LAX took the distressed wife home with her for dinner to comfort her before she continued the journey to Canada.
A more lighthearted example involved a staff member who works in Airline Operations and Planning. He drove to a supermarket to purchase a particular sauce after learning that a member of a world-famous band, who was on a charter flight, liked to have it when he traveled.
On another occasion, a school group and teacher traveling from the US to Australia had an unplanned stopover in Auckland when one of the group became unwell and needed to go to the hospital. This occurred in the middle of the night and the group had nowhere to stay, so an ANZ flight service manager invited them to stay at his home and spent the following day looking after them, including rebooking flights, getting a medical clearance and taking them out to the Sky Tower and Mt. Eden for sightseeing.
Possibly the greatest challenge for airline management today is to convince staff of the need for change made far more difficult when management is not prepared to lead by example. At ANZ, one only has to look at Fyfe's desk, which is not nearly as flashy as most airline CEOs' receptionist desks, to appreciate how seriously the company takes the lead. The management floor has no doors and there are huge beanbag chairs in a central forum area for brainstorming sessions.
Surveys have shown that another reason for resistance to change is that although employees agree change is needed, they don't believe they themselves need to change. At many airlines, management is leery of taking on entrenched union positions and instead is hoping that the good times might return.
ANZ's staff initiatives are paying off handsomely. An airline of last resort in 2001 has become the carrier of first choice almost wherever it operates. Staff morale has soared, passengers are returning in droves, yield is up nearly 6% in the past two years, and in the six months to Dec. 31 net profit soared 61% on revenue growth of 12%. And yes, the shareholders have been taken care of, with earnings per share up 60% in the past year.