Jet Blue Airways: A New Beginning - Case Study Example

A Case-study analysis on Jet Blue Airways, A new beginning. The following analysis is about case study on JetBlue Airways, which describes its enormous success, profits and growth after its launch and also its failure due to inability to withstand external factors that affected its business after few years. This airline company had established strong vision, culture, management practices and procedures and had strong customer focus. However, these practices and procedures could not help the company sustain its competitive position after losses incurred due to some cancellations because of bad weather conditions. A change management strategy focused on changing the way operations were managed helped in restoring the airlines operations and business. This analysis evaluates the effectiveness of the strategic change management and the core areas impacted by this strategy. 1. Introduction: Strategic change management involves a systematic approach to planning and implementing change at various levels and involving employees at various levels along with strong leadership support. This process was successfully implemented at JetBlue Airways, which was experiencing huge losses due to various external factors like fluctuation in prices, bad weather conditions, etc. A deeper study and observation revealed that performance of the company could be improved by altering their business strategies, operations processes and employee engagement practices. This paper evaluates the strategic change process adopted by JetBlue Airways in modifying their irregular operations (IROP) management to create better management and processes that resulted in formation and implementation of the IROP Integrity. 2. Background to JetBlue Airways: JetBlue Airways was founded in 1999 to provide low- cost service to people and to connect more places within the US. Their business strategies worked well and yielded enormous profits and growth for the company during first few years. The secret to this success was attributed to their operational capabilities, employee management and outstanding customer service1. However, some of their business strategies entailed serious glitches that eventually caused huge revenue losses for JetBlue during bad weather conditions because their operations were not designed appropriately to handle flight cancellations and other related activities. Revenue losses during bad weather conditions were due to inappropriate management, inappropriate information and communication, payback to customers for losses, logistics issues, additional costs incurred for crew members’ duty modifications in addition to losses because of flights cancellation. Until the worst ice storm in February 2007, JetBlue’s focus was solely on growth and expansion2. However, the February 2007 massacre caused huge losses, which changed the management’s viewpoint on sustaining JetBlue’s business in the market. 3. Causes for concern: It was after the February 2007’s incident that some leaders among the top management realized that their main cause for concern lied in the way they managed the airlines operations during turbulent times, such as bad weather, which caused delay, flight cancellations, customer dissatisfaction, confusion for crew members and a whole lot of chaotic operations in the Systems Operations Center (SOC). In short, the way they handled their irregular operations (IROP) was inappropriate for the business. Rather, their opportunity to scale up their business lied in managing the IROP more efficiently. From resource perspective, although JetBlue focused on optimal utilization of operational capabilities, it did not have sufficient resources in terms of technology, communication and information to conduct operations during crises situations. The main reason was inefficient cross-functional collaboration for information that might be required for managing during crises situations. Secondly, from people perspective, employees, especially the crew members, were frustrated at lack and delay of information about their schedules, pairing modification, duration, flight cancellations etc. Employees at all levels were always charged to take aggressive decisions at the time of crises, rather than follow a pre-planed strategy to manage regular and irregular operations. These untimely and immediate decisions by the operations managers caused huge revenue losses, which were not even quantifiable before and during crises situations. From the process perspective, JetBlue airways strived to provide utmost customer satisfaction even at the cost of much delay without having to cancel their scheduled flights. Secondly, their increasing business and number of operational flights only made their operations more complex, which further aggravated problems for JetBlue during crises situations3. Managing large-scale operations while abiding by the airlines regulations caused much chaos to flight operations including arrivals, departures, waiting on the tarmac, crew duty modifications etc. Most importantly, lack of information from other departments enhanced inefficiency of the process. 4. Strategic Change : Under able leadership, JetBlue airways set out to make a large strategic change in the way their operations were being managed. The need for strategic change was identified in terms of bringing better collaboration and cohesiveness across different functions, which would improve information and knowledge sharing and help in carrying out various operations more swiftly and with better accuracy and congruency. Although JetBlue’s attempt to bring about change in the way operations were managed was reactive to the aftermath of the ice storm, this change was also aimed at being prepared for such and other unforeseen events as well as taking advantage of future targets. The strategic change in terms of handling their IROPs in better manner resulted in the IROP Integrity, which was aligned to their vision, current operational capacity, and impact on organizational performance4. The best part of planning the change strategy from usual IROP to IROP Integrity has been strong support from leadership and inclusion of employees from all levels and functions in the planning and implementation process. The change process was initiated in accordance with Kotter’s eight-step model for change5. The IROP Integrity process had urgency with strict deadlines. A powerful coalition of employees from different functions and levels was created. The process included leaders with a vision and commitment and the vision was communicated throughout through actions rather than information. Leaders addressed all issues and removed obstacles that were hindering progress and provided complete support to employees. The change agents established clear milestones and recorded progress; only progress was published rather than celebrating any achievement. And finally, the IROP Integrity started yielding desired outcomes and this process became a part of JetBlue’s culture of cooperation and support. 5. Strategic implementation: The change process was identified and initiated by leadership at JetBlue with support from management and board members. Leaders, like Bonny Simi and Rob Maruster were self-driven and understood the need for this change as well as were fully prepared to do everything it takes to bring the desired improvement. At the same time, they also realized the need for employee involvement in the change process because change always worked best when it involved people from frontline operations. Moreover, the founder and former CEO of JetBlue, David Neeleman, had successfully established employee-friendly culture and practices that earned high employee motivation and commitment, which was formed the base for winning employee commitment for this project. The project was not only planned in phased manner, but also included people with proven capabilities in specific areas for various activities. The entire process included identification of various problem areas, eliminating activities that were not required, and grouping various activities into lesser number of sub-projects and associated employees from different functions. This reduced the number of focus areas, identified wasteful activities, and increased cross-functional collaboration. Lean processes, cultural and organizational changes were also included in the planning and implementation activities. All these activities were guided by leaders as well as monitored by external consultants that had experience in managing airline operations. 6. Evaluation of new strategies: Based on the results achieved post implementation of IROP Integrity at the Cancellation Processing Desk, it was evident that all activities in the various processes were aligned to the vision as well as the new processes were flexible enough to accommodate or adjust to other potential crises situations. Most importantly, the perceived weaknesses, like technology or systems, did not exist in the new operation management processes. These perceived gaps were covered by effective cross-functional collaboration, information management and better communication mechanisms that not only prioritized but also eliminated wastage of time due to call queuing and other related problems with respect to the crew members. From employee perspective, this change strategy and practices provided frontline crew members more tasks and responsibilities, involved them in critical and usual decision making processes and made them feel wanted and important in the company. They were highly motivated to take on additional challenges, their capabilities continuously improved. This is evident from the number of promotions and greater responsibilities assumed by most of the staff at JetBlue post implementation of IROP Integrity6. The change and implementation processes at JetBlue created conditions that effectively empowered its employees. Firstly, these processes encouraged participation at all levels; further, they encouraged innovation and creative thinking by employees while equipping them with all relevant information; these activities also assigned accountability and responsibility7. 7. Conclusions and recommendations for future strategies: To sum up, the new way of managing IROP operations based on information, cross-functional collaboration, and change in business strategies have been extremely beneficial. These were achieved through a strategic change management approach that involved employees at all levels and strong support from leaders besides guidance from experienced change agents. Employee involvement through effective empowerment practices can be attributable for the success that was once unimaginable at JetBlue. In order to sustain such business performance, profits and employee commitment, JetBlue should adopt continuous learning and improvement in practices in all areas of management. Adopting a vision that always provides futuristic goals through objectives, systems, culture and processes that will continue to motivate employees through effective empowerment besides improving organizational effectiveness and performance should be the way ahead. Such a vision will encompass sophisticated systems and procedures, and advanced practices which will help the company to stay sustainable and competitive in the market. Selected Bibliography Bohlander, George and Scott Snell. Managing Human Resources. Ohio: Cengage Learning, 2010. Hoyt, David, Charles O’Reilly, Hayagreeva Rao and Robert Sutton. JetBlue Airways: A New Beginning. HBS Case L-17, (September 2010) 1-33. Read More