By: Peter Berkeley
When politics impedes the decision making ability in business, the results are inevitable –irrecoverable setback.
MIAMI – It’s finally over. The disagreement between Minister Warner and the newly appointed (Caribbean Airlines Limited)CAL board has been settled; our Prime Minister can breathe a sigh of relief, and it’s back to business as usual…or is it? It better not be!
Let’s step back for a moment. When a business merger or acquisition takes place there are certain critical high level business decisions regarding the strategic integration of the two disparate business entities that must take place within a short period of time following the marriage. If that integration does not happen, the two entities lumber on with some functional level integration taking place to keep the business going, but essentially there is no ”oneness of purpose”.
On one hand we had elections taking place in Trinidad & Tobago shortly after the new CAL-AJ entity became formal on May 1st, and with it every major strategic business decision that CAL had to make ground to a halt – politics trumped business. But the leadership at CAL still had an embryonic business to nurture and make viable. The outgoing CEO should not be vilified for making any business decisions sans a board; rather, he should be highly commended for not sitting on his hands while politics trumped his ability to make things happen in an industry where you cannot afford to blink.
Nine months into the CAL-Air Jamaica union a new board is in place, and CAL is without a CEO. The new board is faced with a critical far-reaching first decision – that of finding a new CEO. This person has to be more of a leader (visionary, motivator, collaborator), than a manager (directive, authoritarian, micro-manager). But most of all, the board has to be absolutely assured that this person is not a hatchet-man turnaround artist who parachutes in Rambo-style and “makes his/her mark” at the expense of the organization.
Some of this CEO’s top priorities have to be:
1. Earn the Trust of All Employees: The CEO has to realize that there are latent BWIA and Air Jamaica legacy issues to be dealt with especially before tackling the second issue. The degree to which trust is built will determine success of the second issue.
2. Integrate Cultures: It is imperative that CAL/Trinidad & Tobago and CAL/Air Jamaica see themselves as two parts of the whole (Caribbean Airlines Limited). If either component does not pull its weight the entire structure suffers. The role of the CEO here is to bring focus on common goals and objectives; that everyone in the organization shares responsibility of working together to take back the Caribbean air space from the competition.
3. Regain the Trust of the Traveling Public: Every employee has to recognize who pays the bills – it’s the customer. If you do not have customers you do not have an airline…period. Delighting the customer is what will keep customers coming back to CAL as opposed to going with another airline. And that brings us to the fourth key priority.
4. Develop and Share a Compelling Competitive Strategy: Competition for dominance of the Caribbean can only get worse. CAL competes with legacy carriers United Airlines, American, Delta, Continental, US Airways, USA3000, Northwest Airlines and low cost carrier JetBlue. Then there is Air Canada and WestJet from Canada; British Airways and Virgin Atlantic from Great Britain, as well as Charter/Tour Operators Thomas Cook Airlines and First Choice/Thompson Airline. But wait…there’s more.
Airone Ventures Limited (Barbados) has launched REDJet, as the Caribbean’s first low-cost carrier. But the biggest threat will come from the merger between Southwest Airlines and AirTran. That merger promises to forever transform air travel in and to the Caribbean. A key role of the new CEO will be to define a competitive strategy that makes every employee a warrior in nibbling away at the competitive customer base one customer at a time, so that at the end of the day CAL will be the dominant carrier in the Caribbean.
5. Guarded growth: A dream of Caribbean leadership visionaries has been the creation of an integrated Caribbean carrier capable of meeting the travel needs of all the islands and Guyana, at affordable prices while being profitable – an impossible dream? Not necessarily. A key mandatory requirement here is an exceptionally robust business model.
Discussions with LIAT and other intra-Caribbean carriers must continue, and solutions to the impasse that impedes integration must be resolved. Caribbean Airlines has to continue to take the lead to make this dream become a reality.
6. Privatization: One can only surmise that the goal of the Government of Trinidad & Tobago is to return the airline to private enterprise status, with stakeholders coming from across the Caribbean. Positioning the airline to be able to function as a profitable and private enterprise should be one of the goals of this CEO.
Expectations of Caribbean Airlines and the new CEO will be high. The organization faces an uphill battle to regain post May 1 momentum on these strategic issues. Nonetheless, the organization cannot get where it wants to without its focus on the proper priorities.
If the airline really demonstrates that it values its employees, those employees will deliver superior value to the airline’s customers, who in turn will reward the airline with loyalty and profits. It might be instructive for the new CEO and CAL’s leadership to reflect on one of Southwest Airlines’ founding principles, “We are a customer service business that happens to fly airplanes”.
Peter Berkeley
Peter Berkeley is a Trinidadian Business Transformation Consultant living in Louisville, Kentucky. He can be reached at [email protected]
