Alan Joyce Chief Executive Qantas June 22/6/11 Address to the National Press Club"
AJ is sending you a "meta message" - an unspoken message that is implicit in what he has actually done.
By saying that "there are more changes coming in Two months" but not identifying what they are, who they will affect and how the change will be managed, Alan Joyce is deliberately ****ting in his employees faces.
I am sorry for the crudity, but Joyce is deliberately increasing his employees stress levels, because nobody likes change when it is applied to themselves, nobody likes uncertainty in their prospects and furthermore, since Joyce must know that what he did will injure his employees sense of self worth because he refuses to take them into his confidence, he is sending a message that his opinion of the employees affected is that they are scum whose feeling sdo not need to be taken into account: - "you will be informed in due course how we are going to destroy your career" is the message.
I was taught first in B school and later in the IT industry that there are Two dimensions to change management - speed (either slow or quick) and consultation ( either none or full ).
If your business is hemorrhaging cash, then you do a "quick and dirty" restructure. People get the pink slip Friday afternoon and are told don't come Monday. On Monday morning the CEO apologises for the shock and distress the action has caused, explains why it was absolutely necessary and promise that it won't happen again and that peoples jobs are safe.
If you need to restructure but have the time, or must make the time, then you do a "Slow and clean" restructure. You tell your workforce what has to happen, why it has to happen, who it must happen to and when it has to happen. You then start a process (consultants can do this in their sleep) of consultation, information sessions, offers of voluntary redundancies, bans on recruitment in other parts of the company and relocation of surplus staff into new positions there, you also offer career counseling and provide time off for, and assistance with, job seeking.
The other alternatives are totally unattractive. The "Quick and clean" option - walking out the door with a bucket of money so large you never work again is only available to executives.
But the absolute worst reorganization is the "slow and dirty" strategy that it appears Qantas has adopted. It sends all the wrong messages because it basically tells the staff that management has contempt for them by doing nothing to minimize the pain and distress reorganisation always causes.
To put it another way, Joyce should not have telegraphed the reorganization of International, he should have shut up about it completely or taken the affected staff into his confidence. He did neither.
Furthermore, it appears the Qantaslink management in Brisbane have adopted the same strategy, taking a leaf out of the bosses book.
I've been part of Four restructures over the years, One as victim, One as facilitator and Two as architect.
By saying that "there are more changes coming in Two months" but not identifying what they are, who they will affect and how the change will be managed, Alan Joyce is deliberately ****ting in his employees faces.
I am sorry for the crudity, but Joyce is deliberately increasing his employees stress levels, because nobody likes change when it is applied to themselves, nobody likes uncertainty in their prospects and furthermore, since Joyce must know that what he did will injure his employees sense of self worth because he refuses to take them into his confidence, he is sending a message that his opinion of the employees affected is that they are scum whose feeling sdo not need to be taken into account: - "you will be informed in due course how we are going to destroy your career" is the message.
I was taught first in B school and later in the IT industry that there are Two dimensions to change management - speed (either slow or quick) and consultation ( either none or full ).
If your business is hemorrhaging cash, then you do a "quick and dirty" restructure. People get the pink slip Friday afternoon and are told don't come Monday. On Monday morning the CEO apologises for the shock and distress the action has caused, explains why it was absolutely necessary and promise that it won't happen again and that peoples jobs are safe.
If you need to restructure but have the time, or must make the time, then you do a "Slow and clean" restructure. You tell your workforce what has to happen, why it has to happen, who it must happen to and when it has to happen. You then start a process (consultants can do this in their sleep) of consultation, information sessions, offers of voluntary redundancies, bans on recruitment in other parts of the company and relocation of surplus staff into new positions there, you also offer career counseling and provide time off for, and assistance with, job seeking.
The other alternatives are totally unattractive. The "Quick and clean" option - walking out the door with a bucket of money so large you never work again is only available to executives.
But the absolute worst reorganization is the "slow and dirty" strategy that it appears Qantas has adopted. It sends all the wrong messages because it basically tells the staff that management has contempt for them by doing nothing to minimize the pain and distress reorganisation always causes.
To put it another way, Joyce should not have telegraphed the reorganization of International, he should have shut up about it completely or taken the affected staff into his confidence. He did neither.
Furthermore, it appears the Qantaslink management in Brisbane have adopted the same strategy, taking a leaf out of the bosses book.
I've been part of Four restructures over the years, One as victim, One as facilitator and Two as architect.
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From A Blog~ A Measured Response
Quote in entirety :
…
'
I would suggest not only is it highly desirable to have “a well trained, rested, well paid Qantas jock up front – Not a kid who’s overtired, undertrained, and under servitude to an airline”, its absolutely essential. Anybody care to be operated on by the cheapest surgeon money can buy?
In the overall breakdown of airline costs, having well trained, experienced and accordingly, well remunerated professionals in the Cockpit does not add significant burden to the bottom line. Joyce’s ‘vision’ to employ poorly remunerated (and hence bottom of the barrel standards-wise) pilots (compared to world standards) working under the most onerous conditions will most probably result in a very negative impact to the bottom line – ie hull loss (with associated loss of life and complete destruction of Qantas’ reputation, something Joyce seems hell bent on pursuing).
I watched the entire Press Club presentation by Joyce and cannot agree that his speech and sentiments were “excellent” – quite the opposite really on all but a few points.
His proclamations about the resounding success of Jetstar in Asia (hence giving credence to his poorly concealed intention to go-ahead with the new full service entity) ignores the fact that Jetstar Asia has lost over half a Billion dollars since inception and Jetstar Pacific is an absolute basket case. It would also be very difficult to believe that Jetstar International has had a particularly good year considering events in Japan and NZ. The subsidisation of Jetstar in general is common knowledge (and obviously that has to come off some part of the business’ bottom line).
Has Joyce’s management team demonstrated any capability to ‘pull off’ this new full service carrier in someone else’s backyard? The last two experts he sent to Vietnam ended up under house arrest for the best part of 6 months (and the airline is still a mess). He continually harped on about the demise of Ansett yet most of his executive team were part of the Ansett executive when it failed. Hardly a rock solid pedigree.
A positive note was Qantas’ proactive approach to pursuing the facts regarding the threat posed by the volcanic ash cloud (by engaging specialists and specialist equipment). Its a pity he doesn’t take this approach to the rest of the business (ie deal in fact, not rubbery figures and rubbery logic to engineer a Human Resources outcome).
Finally, I thought his statement about driving to Canberra vice displacing a customer was craven rather than noble. Here was a perfect opportunity for Joyce to take a jumpseat in the cockpit and actually talk to his staff (particulalrly his pilots) and get some feedback from the ‘horse’s mouth’. Instead, at great expense to the company (considering how much this guy is paid per minute) he took the chauffeur driven limousine to avoid contact with his own staff.
Cowardly if you ask me.
…
'
I would suggest not only is it highly desirable to have “a well trained, rested, well paid Qantas jock up front – Not a kid who’s overtired, undertrained, and under servitude to an airline”, its absolutely essential. Anybody care to be operated on by the cheapest surgeon money can buy?
In the overall breakdown of airline costs, having well trained, experienced and accordingly, well remunerated professionals in the Cockpit does not add significant burden to the bottom line. Joyce’s ‘vision’ to employ poorly remunerated (and hence bottom of the barrel standards-wise) pilots (compared to world standards) working under the most onerous conditions will most probably result in a very negative impact to the bottom line – ie hull loss (with associated loss of life and complete destruction of Qantas’ reputation, something Joyce seems hell bent on pursuing).
I watched the entire Press Club presentation by Joyce and cannot agree that his speech and sentiments were “excellent” – quite the opposite really on all but a few points.
His proclamations about the resounding success of Jetstar in Asia (hence giving credence to his poorly concealed intention to go-ahead with the new full service entity) ignores the fact that Jetstar Asia has lost over half a Billion dollars since inception and Jetstar Pacific is an absolute basket case. It would also be very difficult to believe that Jetstar International has had a particularly good year considering events in Japan and NZ. The subsidisation of Jetstar in general is common knowledge (and obviously that has to come off some part of the business’ bottom line).
Has Joyce’s management team demonstrated any capability to ‘pull off’ this new full service carrier in someone else’s backyard? The last two experts he sent to Vietnam ended up under house arrest for the best part of 6 months (and the airline is still a mess). He continually harped on about the demise of Ansett yet most of his executive team were part of the Ansett executive when it failed. Hardly a rock solid pedigree.
A positive note was Qantas’ proactive approach to pursuing the facts regarding the threat posed by the volcanic ash cloud (by engaging specialists and specialist equipment). Its a pity he doesn’t take this approach to the rest of the business (ie deal in fact, not rubbery figures and rubbery logic to engineer a Human Resources outcome).
Finally, I thought his statement about driving to Canberra vice displacing a customer was craven rather than noble. Here was a perfect opportunity for Joyce to take a jumpseat in the cockpit and actually talk to his staff (particulalrly his pilots) and get some feedback from the ‘horse’s mouth’. Instead, at great expense to the company (considering how much this guy is paid per minute) he took the chauffeur driven limousine to avoid contact with his own staff.
Cowardly if you ask me.
Mr Joyce the people who work for you have families, mortgages and lives outside Qantas. Those people are now concerned for their capacity to provide for the people in their lives who really matter - and that's not you nor is it, at the moment, the shareholders.
All the discussion upline last night was about yesterday's announcement including a young pilot who was concerned about their ability to provide for their newborn child.
So your staff now have to wait at least two months to see whether the Sword of Damocles falls on them.
All the discussion upline last night was about yesterday's announcement including a young pilot who was concerned about their ability to provide for their newborn child.
So your staff now have to wait at least two months to see whether the Sword of Damocles falls on them.
I'm sure at the top of their whiteboard is the phrase "Maintain fear and confusion", because if you can do that, you can get people to do anything...
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It was a shameful And poorly written/delivered monologue packed full Of arrogance. Fail
Fail on the international announcement that stiffed the employees
and a massive fail to the journos. Z grade questions that clearly showed no prep work
My view anyway
AT
Fail on the international announcement that stiffed the employees
and a massive fail to the journos. Z grade questions that clearly showed no prep work
My view anyway
AT
Which blog ?
Fishers ghost: linky pls!
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M
Qantas to totally restructure its international division | Plane Talking
KB stars .... unfortunately for him his sarcasm is only matched by his ignorance.
oh,
ok
Ken, I'll tell you how AJ could have travelled on the Flight deck ML-CB.
Done.
N
I feel better now.
PS ... hey ... holic? (short term memory loss) .... didn't mean to spoil it ... great minds think alike ....
Qantas to totally restructure its international division | Plane Talking
KB stars .... unfortunately for him his sarcasm is only matched by his ignorance.
oh,
ok
Ken, I'll tell you how AJ could have travelled on the Flight deck ML-CB.
- He asks the ground staff if he can speak to the Captain.
- He asks the Captain if he can travel on the flight deck to an appointment in CB, showing his ASIC.
- Captain then has the choice.
Done.
N
I feel better now.
PS ... hey ... holic? (short term memory loss) .... didn't mean to spoil it ... great minds think alike ....
Last edited by noip; 23rd Jun 2011 at 06:18.
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Ben Sandilands Take....
The commentary Qantas CEO Alan Joyce gave yesterday concerning the restructuring of its international services means August 24, when all is revealed, will be a flag lowering day, a bloody day, with the loss of experienced pilot jobs and a retreat from poorly performing routes after what he promised would be a review made with ‘ruthless but honest’ eyes.
If ‘honesty’ is at play in these decisions, much more detail is required.
Just how much has the claimed poor performance of an airline Australians expect to service their links to the world been a consequence of gifting jets and other benefits from the full service brands to the Jetstar brands?
How much of it has been poor fleet and route decisions, which have seen Australians choosing faster and easier trips on other carriers, even if, as sometimes happens, they pay Emirates, Singapore Airlines or other competitors slightly more for their services?
Surely it has cost hundreds of millions of dollars more than the $200 million Joyce predicts Qantas international will lose in the year to June 30, a situation so bad he says it threatens the very existence of Qantas as a group.
It is rare for Qantas to reveal the performance of its passenger carrying brands in isolation from each other.
Investors are told how much the so called ‘loyalty’ program makes from selling frequent flyer points to people selling petrol, groceries and or running card programs, but as a matter of policy, the actual figures for Qantas domestic, Qantaslink, Qantas international, and the Jetstar franchises, are mix mastered into a blend as commercial-in-confidence.
But not yesterday. At a National Press Club luncheon at which reporters asked the most obsequious and feeble questions Joyce has probably faced in his career, he said the overseas full service operation would loose $200 million on a $5 billion investment.
While the cross subsidisation of Jetstar by Qantas is a zero sum game for investors, it is also the dark matter that distorts the visible Qantas universe.
When investors, and government, and employees, are told that Jetstar is the highly profitable growth engine of Qantas group operations, they are kept in ignorance as to how well Jetstar and the full service brands would perform if billions of dollars worth of Airbuses, much of their fuel, and some of the maintenance, training and other costs of Jetstar were reported on a divisional basis, rather than blended into a mystery pudding.
These figures are also important because without them, the slaughter that is coming to Qantas long haul cannot be truly assessed by the investment community as a brilliant strategy, or as a potential disaster for the Qantas brand and its future.
Whatever the fiscal truth about Jetstar, and there is no denying its success in winning low fare customers (but discouraging higher yielding passengers) it is not a $10 million dollar seed capital venture like Virgin Blue, which took and kept more than 30 per cent of the domestic market.
Instead, Jetstar has been a massively costly exercise for Qantas. A very successful exercise, but one lacking in transparency in terms of the relative performances of all the Qantas divisions if their costs and assets are fully accounted for.
How real is the $200 million loss for Qantas international? Not only is that under a cloud, but so are management decisions that would easily account for that $200 million in botched fleet decisions, uncompetitive product, and appalling network and schedule strategies.
It is almost as if Qantas international has been robbed of assets and set up to fail.
Qantas is considering a number of international options. Its impending embrace of more joint business ventures with other carriers is widely admired in other markets where it has been used to deliver benefits to investors and consumers alike. It is precisely what Virgin Australia is doing with its ventures with Singapore Airlines, Etihad, Delta Airlines and Air New Zealand.
However going on recent decisions, those deals only get regulatory approval in Australia and abroad if there is a guarantee by the parties to maintain existing capacity, rather than reduce their combined operations.
The other card Qantas has showed is the off-shoring of activities in which a controlled or financed subsidiary based in Singapore, or Kuala Lumpur, or perhaps Shanghai, takes over some of the flying Qantas does to and from Australia at lower wages and conditions, as well as participating in traffic originating in the region hosting the enterprise.
This comes with risks on a scale comparable to those Qantas is seeking to retire by quitting some of its loss making Australian based long haul flying.
Two things may happen to Australian forays into strongly defended Asian markets. They may get eaten alive by the established national competitors, whether breweries, or factories, or distributors, or airlines, or eaten alive by them as supposedly equal partners in a common venture.
Qantas has already revealed its hand in relation to flying costs at Jetstar, proposing a labor sharing arrangement in which pilots from its Asia based and New Zealand franchises could also be shifted into Australia for duty tours, for the terms and conditions under which they are employed in their home countries.
The emphasis Qantas is placing on solving its international underperformance is good. But are the answers rigged?
If ‘honesty’ is at play in these decisions, much more detail is required.
Just how much has the claimed poor performance of an airline Australians expect to service their links to the world been a consequence of gifting jets and other benefits from the full service brands to the Jetstar brands?
How much of it has been poor fleet and route decisions, which have seen Australians choosing faster and easier trips on other carriers, even if, as sometimes happens, they pay Emirates, Singapore Airlines or other competitors slightly more for their services?
Surely it has cost hundreds of millions of dollars more than the $200 million Joyce predicts Qantas international will lose in the year to June 30, a situation so bad he says it threatens the very existence of Qantas as a group.
It is rare for Qantas to reveal the performance of its passenger carrying brands in isolation from each other.
Investors are told how much the so called ‘loyalty’ program makes from selling frequent flyer points to people selling petrol, groceries and or running card programs, but as a matter of policy, the actual figures for Qantas domestic, Qantaslink, Qantas international, and the Jetstar franchises, are mix mastered into a blend as commercial-in-confidence.
But not yesterday. At a National Press Club luncheon at which reporters asked the most obsequious and feeble questions Joyce has probably faced in his career, he said the overseas full service operation would loose $200 million on a $5 billion investment.
While the cross subsidisation of Jetstar by Qantas is a zero sum game for investors, it is also the dark matter that distorts the visible Qantas universe.
When investors, and government, and employees, are told that Jetstar is the highly profitable growth engine of Qantas group operations, they are kept in ignorance as to how well Jetstar and the full service brands would perform if billions of dollars worth of Airbuses, much of their fuel, and some of the maintenance, training and other costs of Jetstar were reported on a divisional basis, rather than blended into a mystery pudding.
These figures are also important because without them, the slaughter that is coming to Qantas long haul cannot be truly assessed by the investment community as a brilliant strategy, or as a potential disaster for the Qantas brand and its future.
Whatever the fiscal truth about Jetstar, and there is no denying its success in winning low fare customers (but discouraging higher yielding passengers) it is not a $10 million dollar seed capital venture like Virgin Blue, which took and kept more than 30 per cent of the domestic market.
Instead, Jetstar has been a massively costly exercise for Qantas. A very successful exercise, but one lacking in transparency in terms of the relative performances of all the Qantas divisions if their costs and assets are fully accounted for.
How real is the $200 million loss for Qantas international? Not only is that under a cloud, but so are management decisions that would easily account for that $200 million in botched fleet decisions, uncompetitive product, and appalling network and schedule strategies.
It is almost as if Qantas international has been robbed of assets and set up to fail.
Qantas is considering a number of international options. Its impending embrace of more joint business ventures with other carriers is widely admired in other markets where it has been used to deliver benefits to investors and consumers alike. It is precisely what Virgin Australia is doing with its ventures with Singapore Airlines, Etihad, Delta Airlines and Air New Zealand.
However going on recent decisions, those deals only get regulatory approval in Australia and abroad if there is a guarantee by the parties to maintain existing capacity, rather than reduce their combined operations.
The other card Qantas has showed is the off-shoring of activities in which a controlled or financed subsidiary based in Singapore, or Kuala Lumpur, or perhaps Shanghai, takes over some of the flying Qantas does to and from Australia at lower wages and conditions, as well as participating in traffic originating in the region hosting the enterprise.
This comes with risks on a scale comparable to those Qantas is seeking to retire by quitting some of its loss making Australian based long haul flying.
Two things may happen to Australian forays into strongly defended Asian markets. They may get eaten alive by the established national competitors, whether breweries, or factories, or distributors, or airlines, or eaten alive by them as supposedly equal partners in a common venture.
Qantas has already revealed its hand in relation to flying costs at Jetstar, proposing a labor sharing arrangement in which pilots from its Asia based and New Zealand franchises could also be shifted into Australia for duty tours, for the terms and conditions under which they are employed in their home countries.
The emphasis Qantas is placing on solving its international underperformance is good. But are the answers rigged?
Ruprecht, I know that is clearly the intention of Oldmeadow and exco.
The problem this time I think is that they've overplayed their hand. So many staff are so pissed off at the moment they frankly no longer give a rat's. We are at the stage where we are willing to do whatever it takes to make life as difficult as possible for exco over the next few months and consequences be damned.
Seems to be nothing left to lose my friend.
The problem this time I think is that they've overplayed their hand. So many staff are so pissed off at the moment they frankly no longer give a rat's. We are at the stage where we are willing to do whatever it takes to make life as difficult as possible for exco over the next few months and consequences be damned.
Seems to be nothing left to lose my friend.
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I couldn't agree more with most of the comments...but I will try.
Having just listened to the address in full, all I can say is that both AJ and the whole board are delusional.
AJ talks about the various components of the Qantas Group. He gives numbers on some of them but is clearly unwilling to break out the cost structure for Jetstar for fear of exposing the fallacy of his arguments.
To claim that Jetstar Asia is a successful business is not only wrong, it is materially misleading to investors. To think that QF can set up a full-service carrier based in Asia is just a nonsense. Who in their right mind would put up the 51% of equity required for less than 90% of the control. Traffic rights were not mentioned at all.
I thought the Press Club were there to expose such ineptitude, instead they lay out saucers of cream.
The King hath no clothes.
Pla ar do theach!
Having just listened to the address in full, all I can say is that both AJ and the whole board are delusional.
AJ talks about the various components of the Qantas Group. He gives numbers on some of them but is clearly unwilling to break out the cost structure for Jetstar for fear of exposing the fallacy of his arguments.
To claim that Jetstar Asia is a successful business is not only wrong, it is materially misleading to investors. To think that QF can set up a full-service carrier based in Asia is just a nonsense. Who in their right mind would put up the 51% of equity required for less than 90% of the control. Traffic rights were not mentioned at all.
I thought the Press Club were there to expose such ineptitude, instead they lay out saucers of cream.
The King hath no clothes.
Pla ar do theach!
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Given that I know that AJ's rantings about the pilots and engineers were false, and that I know that his motivation is to paint Mainline QF in the worst possible light, then I am left with the conclusion that the remainder of his speech to the NPC was false also.
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The only reason he wouldn't have asked for the jump seat is he well knows the crew would've told him to f@ck off in no uncertain terms. Quite a difference from his opposition, who is almost universally invited to take the seat, and actively engages with the crew.