Same market, different fortunes in the airline industry

May 29, 2009

It’s been a month of contrasting fortunes in the airline industry as Virgin Atlantic announced a significant rise in profits, while British Airways (BA) announced the biggest loss since the company was privatised in 1987. In this scenario, it is Virgin’s story that is remarkable because BA’s results are largely reflective of a more general downward trend in the airline sector – driven by high fuel costs, the weak pound and lower traveller numbers.

In media terms, and in line with the personality of its famous President, Sir Richard Branson, Virgin is often portrayed as the major carrier that is professional, but fun: staff are happy and, in turn, they project that feeling to customers. And with these results nothing is set to change – Virgin’s workforce have just received their annual bonuses at a time when such things have all but disappeared in the private sector. You have to applaud what Virgin has achieved in these economic conditions – but it’s not luck or coincidence. Despite paying out to reward staff’s efforts and the results they have achieved during tough times, Virgin have put a freeze on pay for all staff this year (including senior management), successfully ‘hedged’ fuel by buying when it was cheap and stopped expanding their plane fleet in 2006 in anticipation of the economic slowdown. These kind of strategic decisions, many of which were taken before the economy collapsed, are what have safeguarded profits and jobs now.

Virgin is operating in the same market and economic conditions as other major airlines – but they have been successful by being proactive in terms of the business decisions they have made and the way that they have treated their staff. Imagine how different it must feel to be a member of the Virgin Atlantic workforce this week compared with working for their competitors. At Virgin, bosses are thanking staff financially for great results while Willy Walsh, the Chief Executive of BA reflected more accurately what working in the rest of the airline industry feels like right now when he publicly said that he sees “no signs of recovery anywhere”. This was in the same week that he grabbed the headlines by offering to work throughout July for free as a gesture to show that he is willing to share the pain with his staff, who have just been asked to consider the option of taking unpaid leave or working part-time in an effort to cut costs.

Virgin Atlantic is a perfect example of how bosses in the big companies can earn their money and protect the well-being and job security of their often huge workforces. The strategic decisions made by senior management in any company have to work for both the business and staff alike if success is to be sustained during good times or bad.

BA Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/hi/business/8062844.stm

Virgin Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/hi/business/8067640.stm

Leave a Comment » | Leadership, Management, Well-being | Permalink
Posted by Cary Cooper

Helter Skelter – office fun or metaphor for the economy?

May 26, 2009

This month Councillors and developers in Sheffield have being defending their decision to invest nearly £100,000 of public money on installing a full size helter skelter in office buildings designed for creative and media companies. In the current climate, and with politicians under the spotlight for frivolous spending, it’s perhaps not surprising that this decision has been questioned.

The move has been defended as being a good example of risk-taking designed to inspire the creative companies and their visitors who come to work in the Electric Works building. The experience, which is not open to the general public, has been described as the equivalent to having a coffee or screen break – a rare opportunity for employees to refresh themselves by taking the ‘exhilarating’ ride to the ground floor. In many ways, I can empathise with this argument – we all need to be inspired and the physical space in which we work really matters in this respect; especially in the creative industries.

I suspect that the uproar is as much bad timing as anything else – if the helter skelter had been unveiled during the good times the planners, architects and Councillors in Sheffield would have been roundly applauded for such an innovation. And if the offices were packed to the rafters with successful and buoyant creative businesses, rather than being only 20% occupied during a recession it would all look very different. But now that we are in a much more austere economic environment the project has been condemned by opposition politicians, the media and small business owners. In reality, the planning decisions that allocated the funding for this building were almost certainly made before the credit crunch set in, so it does seem somewhat harsh to condemn the whole thing retrospectively.

It’s important to see the positives in these kinds of innovations – the publicity it has brought to the city of Sheffield; the continuing regeneration of an industrial city; the inspiration and motivation it can bring to workers now and in future when things get better. Does your working environment matter to you? Look around you – is it inspiring or stultifying? Would you like to see your own Helter Skelter or even just a new coat of paint on the walls?

You can read Yorkshire Post’s coverage of this story at: http://www.yorkshirepost.co.uk/news/100000-of-public-money-to.5242403.jp

Leave a Comment » | Engagement, Leadership, Productivity, Well-being | Permalink
Posted by Cary Cooper

Workers Turning to Presenteeism during the Recession

May 21, 2009

Lancaster University’s Centre for Organizational Health and Well Being recently commissioned a YouGov Survey to ask a national sample of 2250 employed people in a range of jobs about ‘presenteeism’ – the habit of staying at work unproductively so that it looks like you are working hard. Perhaps unsurprisingly, the results showed that British workers are spending more time at work in attempts to safeguard their jobs during this recession. 

More specifically, 66% said that over the past few months they were coming in earlier and staying later at work; 45% said that they were ‘playing it safe at work and keeping their head down’ and 41% were reporting a more negative atmosphere in the workplace. These figures suggest that the ‘recession workplace’ has become more self-protective – with less team building, longer working hours to show commitment and people going to unnecessary meetings to put in ‘face time’.  This presenteeism and self-protective behaviour is the last thing that most workplaces need at the moment, but it is understandable when you consider the amount of pressure on job security.

It is important for managers and business leaders to understand this dynamic – and most importantly, to address it directly. The best managers recognise unproductive presenteeism in their team members when they see it and then have the ‘difficult conversation’ to find appropriate interventions. The intervention could take many forms – but at its heart has to be an open and honest discussion based on behavioural evidence. It should acknowledge what the manager has observed and gives the employee the chance to explain it. In this context, the manager will inevitably have an opportunity to re-state expectations about time spent in the office and re-emphasise the importance of deliverables and of quality versus quantity of work. After the conversation the employee feels ‘reset’ and supported, safe in the knowledge that it will not be a lack of hours worked that will cause his/her job to become insecure.

These one-to-one conversations need to be supported by better communication from on-high, designed to make people feel more secure and acknowledge that a long hours culture is counterproductive to the health and wellbeing of the individual and to the company’s performance.

The good news from the Centre’s report is that 54% of the sample said that their relationships were unaffected by the economic downturn, possibly because during a recession most people realize how important the family and personal relationships are and want to protect them at all costs. However, this is in direct contrast to recent statistics from Relate – the relationship counselling service – that reported an increase in relationship problems. So this is not an area we should take for granted. If this recession has done nothing else, it provides the opportunity for us to re-consider our value systems – what work should be about; the importance of relationships versus materialism; how we can be successful in business without being greedy and the importance of living a balanced life.

1 Comment | Management, Productivity, Well-being | Tagged: , , , , | Permalink
Posted by Cary Cooper

Perks and benefits

May 18, 2009

The ‘second home allowance’ and other fringe benefits that MPs receive have been making the news headlines on a daily basis over the last few weeks. The Prime Minister himself has made a public apology and the system of allowances and perks is now under review. It seems like a crackdown on these benefits is inevitable – if only to prevent more embarrassing revelations. So do perks and benefits make a difference to how people see their jobs – and in particular, do they make a difference to how hard people work? If so, the baby may be on its way out with the bath water!

The government are not alone however, as British Airways (BA) recently made the news by putting forward 32 cost-saving proposals, many of which were about reducing staff benefits. The proposals apparently include cutting annual leave by two days and decreasing the number of night’s layover in foreign cities. Obviously, BA staff are likely to resist these changes, but the company seems to be signalling a belief that such benefits are not particularly important in motivating staff or driving overall performance.

Perhaps management in many organisations now feel that such benefits are just not affordable any more – and only have a marginal impact anyway. Or perhaps, they feel that they might be of some importance when people are considering a new job but that once in the role people just become accustomed to the benefits and they lose their motivational impact. Another view is that they start to see perks as something that they are actually entitled to rather than being discretionary – this would mean considerable affront if these things were suddenly removed. So setting aside bonuses and other direct financial rewards, do benefits serve a long-term motivating purpose or are they something that we can easily dispense with when times are tough? Both the government and BA may soon get emphatic answers to these questions from their respective workforces!

Leave a Comment » | Motivation, reward and recognition | Tagged: , , , , | Permalink
Posted by Cary Cooper

Holidays and the effect they have on us!

May 7, 2009

We are now well into the Easter / May public holiday period and I’ve been thinking about the benefits, or otherwise, of holidays. To bring myself up-to-date I took a quick look at the most recent review article that I could find to see what’s known about holidays and the effect they have on us. The thing that caught my eye was a finding that the beneficial impact of holidays seems to last for about three weeks – perhaps longer than I would have guessed! There also seems to be some evidence that longer breaks are better for us than shorter ones – but a couple of well-regarded researchers also suggested that five three-day weekends would be better than a one week holiday.

What is for certain is that holidays provide us with relief from the daily pressure of work in a way that an evening or a weekend can’t. They enable us to replenish our ‘well-being reservoir’ and to re-energise – if you come back from a holiday feeling worse than when you left then something is going very wrong! I’m not sure about whether longer or shorter holidays are better for us – perhaps it depends on the nature of your job and the kind of person that you are? What do you think? What are the pros and cons of long or short breaks from work?

2 Comments | Well-being | Tagged: , | Permalink
Posted by Cary Cooper

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