Bias or mismatch in the MAS-AirAsia change initiative? — Daphne Loke
MAY 6 — The latest edition of The Edge devoted four full pages to the unbundling of MAS-AirAsia share-swap.
In a conversation with a MASEU unionist on the union bypassing MAS management to appeal directly to the Prime Minister, came the retort, “Since when have they (the management of MAS) cared for us?”
Relooking back at my article of September 22, 2011 “AirAsiaX Business Model or Corporate Culture?”, without doubt, the organisational complexity of MAS played a contributory role to the failure of the share-swap turnaround plan.
One of the key figures of the change team, Tony Fernandes, admitted that he “…did not expect the amount of resistance to change from MAS” (May 5, 2011, NST p. 21).
This should prompt another look at preparing the foundation for a change exercise which would affect 20,000 employees. Furthermore, the company had been bleeding for over 15 years and had undergone several turnaround attempts.
MAS union had made known its objections. Top of the list was the resistance against Tony Fernandes and Kamaruddin Meranun, the miracle makers who converted the RM1 AirAsia into a leading airline in the world.
When the union complained that “they had picked the wrong person again and again” (August 9,2011 malaysiansmustknowthe truth.blogspot) it probably referred to Ahmad Jauhari, the current group CEO.
The share swap approach differed from previous attempts in that the two AirAsia founders were perceived to helm the change whereas past turning around programmes were seen as being left in the hands of individuals such as Tajudin Ramli, Idris Jala and the like.
It was not too long ago when the union lamented , in the same blog:
“The problem with MAS is complex and requires a person familiar with airlines nature of business. The person is capable to go to the ground to understand the report and information. Equally important he must be respected or earn the respect of the staff in order to get their cooperation and commitment.”
This time around, Khazanah’s choice of approach met the union’s wish list. Why, then, did the union still insist the wrong people were picked to helm the change?
In the minds of the union, MAS employees “would be at the losing end of the collaboration between budget carrier AirAsia and national carrier MAS”.
From the above, it would appear that both Fernandes and Kamaruddin did not command the respect of the union plus the bias perception of mismatch of corporate culture between a budget airline and national carrier.
The union also pointed out that internal affairs of MAS needed to be looked into. It objected to the style that each time a new CEO was brought in, that person would bring along 30-40 of his men to occupy top positions. This is to be expected as to institute change in a large organization, a sizeable change team would be required.
The union complained that opportunities were not given to existing capable personnel who “have worked here for 20 to 30 years” such a working “under 7 different MDs in 15 years”.
It was also reported employees were “shocked” at each management reshuffle, but “most of the staff at the briefing on August 11, 2011 did not know why…….” certain changes were necessary. This implied that the employees were no longer excited over yet another change programme.
There were other perceptions from the union side which the change strategists would not hesitate to deny. Two assumptions could be derived from this. On the part of the new change commanders, they could have assumed certain degree of receptiveness from the employees as it was not the first change exercise for the organization.
The staff, however, could have been bored with change commands over the years that indifference could have set in that something more spectacular was needed to shake them up.
This also showed that the communication channels to carry out change throughout the organization were lacking or ineffective. It indirectly tells on the union’s comment that the management did not care for them. These channels were needed to transmit the strategy for change, the execution plan, the who, the what, and most important the feedback loop from the staff.
As highlighted earlier, the union feared the mismatch in corporate culture between a low-cost airline with that of a national carrier. This worry of the 65-year old union would be difficult for most people to accept.
Whether an airline operates as a low-cost carrier or full-service carrier is a choice of business strategy. The market had been rife with complaints that the MAS staff, senior ones in particular, live in ivory towers and comfort zones.
Notwithstanding the truth of these comments, they should be regarded as signs of complacency and failure to brace the national carrier to meet the fast pace of change in the market. As pointed out in the Edge, AirAsia “powered by ex-MAS staff is able to hold its own in a challenging environment but the national airline is not?”
Two other interpretations could be derived from this situation. First, there was no basis for the union to reject the culture of low-cost airlines. AirAsia faces greater competition than MAS. AirAsia received it first breakthrough when it created its own market in Malaysia.
This reflected the ability of AirAsia in innovativeness and adaptability, whereas MAS with abundance of resources and support from the government did not take advantage of the situation for trying out new scenarios.
Corporate culture consists of mindsets, beliefs and attitudes of all the employees of the company nurtured over time. This brings us to the second argument that it was not impossible to introduce the low-cost carrier’s corporate culture in MAS.
A company’s vision and shared values form the foundation of corporate culture. MAS, in arguing that it was not allowed to reduce ticket prices, had indirectly admitted that its business strategy could be changed to that of low-cost, and that the staff could/would accommodate the change.
AirAsia All Stars is a testimony of the low-cost airline’s employees’ buy-in to Tony Fernandes’ style, as in McKinsey’s 7S Framework. Tony is often seen walking around LCCT.
During the feud between AirAsia and MAHB over increase in airport tax, AirAsia staff used Fernandes’ car as a plaster board for notices when MAHB removed their notices placed elsewhere in the LCCT. Was this not then kind of hands-on and “to go on the ground” leadership the union was looking for?
The union announced it was “ set to file their proposals for the airline in the next 2 days” (March 5,2011 NST p. 2) which would focus on “regaining trust of staff and revenue generation “. Were these not on the change agenda of Tony Fernandes and Kamaruddin Meranun?
I will not attempt to identify who are the winners of the unbundling , but I must say the 20,000 unionised employees of MAS had the opportunity to be mentored by a world class icon like Tony Fernandes. Anyone committed to the earlier change should put his/her best foot forward to make the share swap initiative bear fruit.
The Edge pointed out that AirAsia pilots normally completed their 1,000 hrs annual flying work load by September or October. And that the airline had to drop certain routes because they did not have enough pilots.
It may be a good idea for everyone of the 20,000 MAS employees to feedback to the AJ everyday by answering the question, “What value have I brought to MAS today?” This could be one positive step in line with Aziz’ s call to “change the cost structure, tighten the leakages and to promote a whistle-blowing culture. If you can’t do it close shop la.”
It had often been said that MAS is not a welfare organisation. Khazanah funds are tax-payers’ money. This goes to justify the question, “How many times do we want the government to bail out MAS?”
Recalling what was said by the then Chairman in the 1992 MAS publication “Airborne” (p.120):
“We should not close our eyes on our own deficiencies. We should not blame others. Let us be our own severest critics.”
* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insider.