69 FROM BLOODY AWFUL TO
BLOODY AWESOME

The British Airways Board was established in 1971 to control two nationalized airline corporations – BOAC and BEA – and two smaller, regional airlines, Cambrian Airways and Northeast Airlines. On 31 March 1974, all four companies were merged to form British Airways.

Now fully and directly under government ownership, it was far from plain sailing for the business. Over the next decade, British Airways slid into a position where it was seen as an increasingly archaic public institution with a huge, unproductive work force and lax management that was producing huge losses.

A standing joke of the time was: “What does BA really stand for?”, with the answer “Bloody Awful!”

The government dreamed of denationalizing the firm, and turned to John King for their salvation, then Chairman of engineering firm Babcock International.

King’s first major task was perhaps his most unpleasant one. Within a few months he reduced BA’s bloated work force from 59,000 to 36,000, though to ease the impact, generous severance packages were offered to all who left voluntarily. The money for which was found by selling off surplus aircraft and some real estate holdings in the London area.

King then fired two long-standing agencies: the insurance agency that had handled BA’s business for 60 years and the advertising agency Foote Cone & Belding who had been BA’s agency for 36 years. He gave the account to the British-based agency Saatchi & Saatchi.

Next in line for a shake-up was the airline’s Board. King’s view was that the then current board was a largely ineffective bunch. It included an economist, a union leader, the head of another nationalized industry and a former treasury official. King transformed the Board with some top level professional appointments including a former Chairman of Barclays Bank International, a Director of Cadbury Schweppes and a bit later the Chairman of Unilever.

However,that still left the new Chief Executive role. King was determined not to hire an airline expert. “We were looking for someone who understood service,” he said, “but there seemed to be an advantage in not knowing too much about the business. In my ignorance, I could do things I might not have done if I had been better informed.” He wanted the same for his new CEO.

Finally in early 1983 Colin Marshall, then Deputy Chief Executive of Sears Holdings, was appointed.

“Morale really was appalling,” he says now. “People had seen thousands of their colleagues go out the door, and they had no idea what would happen next. They needed some inspiration.” So, Marshall set about moving from BA to BA, or in his words, “from Bloody Awful to Bloody Awesome”.

New uniforms were designed for ticket agents, ground personnel, flight crews and even baggage handlers – the first change of garb in 20 years for male staff.

He repainted the fleet with distinctive new stripes and a company coat of arms bearing the motto “To Fly, To Serve”.

But he understood that the motto wouldn’t really mean anything unless the culture changed too, so all employees were made to attend a two-day seminar called “Putting People First”. The workshops put British Airways employees in the customers’ shoes. Flight attendants, for example, were asked to recall their own experiences in restaurants when meals were dumped unceremoniously in front of them.

Another strand to achieving the desired levels of service was meticulous attention to detail. Market research had shown that passengers responded much more positively when addressed by name. “Have a good light, Mr. Lury”,and when ticket agents made a point of using names, customer satisfaction scores rose about 60%. So this too became part of the training.

Next was an upgrade for BA’s business-class service, which included refurbishing lounges at major airports, putting seats with adjustable headrests in business-class cabins on most planes, and improving the quality of food. Renamed Club World, it was then advertised more widely.

At London’s Heathrow airport special “hunters” were introduced; trouble-shooters who spoke a plethora of languages and roamed the terminal looking for confused passengers in need of assistance.

Timetables were reviewed, and unlike pre-Marshall days, when the airline’s convenience could take precedence over the customer’s, planes were by and large scheduled to take off when passengers wanted them to (leaving earlier or later for instance).

King’s, Marshall’s and the now reinvigorated employees’ efforts paid off: the airline’s financial results and reputation were transformed, and when in the advertising BA claimed to be “The World’s Favourite Airline”, it was no joke. In fact in 1987 when the Government denationalized it, the public offering of the British Airways stock was vastly oversubscribed.

As Colin Marshall probably said, “Bloody Awesome!”¹³

And the moral is that change is dif icult but not impossible. What are the key actions you would make alongside any avowed intention to change?

¹³ Unfortunately for BA, a combination of some complacency and the radical shifts in the industry (especially the emergence of low-cost airlines) meant the brand didn’t live happily ever after and has in 2010 gone through a process not dissimilar to the transformation King and Marshall led. Interestingly one aspect of this relaunch has been a return and re-focusing on “To fly, to serve”.