Tuesday, February 9, 2010

Turnaround Management – Focus on Five

There are a lot of pressures on CEOs and Executive teams these days. Greater pressures than ever before or at least it seems that way. They are being asked to do more with less, deliver the profitability to keep the shareholders or owners happy, keep the employees motivated and of course delight customers and clients.

The tendency has been to have a number of important initiatives underway so that the needs of all of the stakeholders are addressed. Instead of doing more with less, the result most often is to do less with less. Significantly less.

In 2008, the management of United Airlines made a decision to run a better airline. According to the Wall Street Journal, United’s program, “Focus on 5”, was an initiative for all employees to work to improve five key measures important to customers. The five include on-time performance, condition of the airplanes, courteous service, revenue and costs. Bonuses are paid to employees for months when on-time arrivals beat rival airlines. United Airlines improved on-time arrivals of flights to 80.5% in 2009, up from 71.3% in 2008. A solid start to long term improvement, but also this is clearly a turnaround.

There are several lessons here.

The first is that it started from a review of their strategic plan and what were going to be the most leveragable initiatives to deliver the company objects. Note, they had to have a strategic plan to start in order to do this. You and your company do have a written strategic business plan, right?

The second is focus. United didn’t try to do everything. They selected the most important initiatives and had everyone focus on them.

The third is communication. United made it known throughout the company that these were the key initiatives and everyone’s role was defined as to how to meet these initiatives.

The fourth is measurement. They had simple measures that were easy to obtain, easy to understand and easy to tie directly to the results required.

The fifth is rewards. Employee compensation by way of bonuses was tied directly to the success against the key initiatives.

This article regarding “Focus on Five” key lessons from this turnaround management opportunity is a follow up to United’s internal program slogan and efforts. It doesn’t say that the program was the right one or even well run. It does say that their program was simple and focused. Do you have a program that is simple and focused, based on the key initiatives from your business plan? If not, contact us. We can help.



John Maver
Maver Management Group
(925) 648-7561
Maver Management

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