Blog
Lessons from BA and Royal Mail: Strike Now, or Strikes Later
2nd November 2009
Why do companies wait so long before making the organisational changes they know are necessary?
A great online article (summarised below) on the importance of taking action to ensure that a business survives.
Take what’s going on at Royal Mail and BA. Both of these disputes relate to long-standing issues that management teams and unions have failed to resolve over time.
Successful companies fail, not because they are bad at what they do, but because they don’t respond quickly enough to changes in their markets. There are three reasons market changes overtake them: arrogance, defensiveness and inertia.
Of these three, inertia is the biggest barrier to change. Unpicking complex ways of working without destroying ongoing performance, is one of the most difficult leadership tasks. That’s why many executives put it off, often until it is too late.
Both BA and Royal Mail have experienced a long-term build-up of pressure on their cost base. All the ‘quick wins’ have long since been pursued. The remaining options have big consequences attached.
So can you address inertia before the rot sets in? Here are four steps you can take:
1. Make efficiency a way of life, not a one-off programme. Easier for companies pursuing a low cost strategy, but by setting ongoing efficiency goals and involving everyone in their pursuit, you will reduce the need for major, one-off interventions.
2. Assume ‘quick wins’ won’t be enough. ‘Quick wins’ tend to tackle symptoms rather than root causes. Like a homeowner who is happy to place buckets under leaking pipes, managers who let quick wins suffice will fail to deliver the longer-term changes your business needs.
3. Develop a healthy paranoia about your future. Relying on current and past successes will inevitably lead to decline — just look at the US car industry or the music industry. Tackling emerging issues early puts you on the foot front. As former Intel CEO Andy Grove said: “Only the paranoid survive”.
4. Put new business growth at the heart of your management agenda. Developing a range of future growth options creates momentum and forward movement. Just as it is easier to turn the steering wheel of a car that is moving, it is easier to change organisations that are advancing rather than static. A key issue for both Royal Mail and BA has been the absence of new, underlying growth.