Monday, 31 March 2008

The Bottom Line at BA

Some are born in crisis, some achieve crisis and some have crisis thrust upon them.

Churchill was born in crisis when he took over as Prime Minister in 1940. Many chief executives are thrust into crisis through a disaster, think of those trying to carry on after 9/11 . Then there are those who through their own management style, or the culture of the company manage to achieve crisis because they do not pay enough attention.

Willie Walsh the CEO at BA has achieved crisis for his company. The opening of Terminal 5 was a well heralded event. The issues that had to be addressed were well understood and yet not enough attention was paid to them, because not only has a lot of baggage been lost and passengers severely inconvenienced but flights are having to be cancelled on a daily basis. It has been humiliating for the staff, the company and the wider community.

Walsh is a numbers' guy, he has not demonstrated any people skills in public that I am aware of and I would guess that his drive to ensure the bottom line is healthy is at the bottom of this mess. More time for training, fewer flights to start with so that the system and staff could be better able to cope, these would have been ruled out, in the fond hope that it will be all right on the night. In business continuity terms BA has been found wanting and their incompetence has affected many others - in future the best decision will be not to fly BA for if you do it could impact your business badly.

Will BA shareholders demand Walsh resigns because of the damage done to reputation and therefore the money earning capacity of the company? Probably not, they won't make the connection between reputation and share price and the culture that brought about the Terminal 5 fiasco, but they should.

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