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MM6015 Business Leadership
JET BLUE Airways: Airways: Starting from scratch scratch 7S Approach GROUP 7 Executive 46 29111311 Haidir Afesina 29111337 Chindia Ferdinansari
Outline
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Overview
Lessons Learned
Business Issue
Change Management
Recommenda tion
Business Solution
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Overview
A low low cost, low fare, high quality service domestic airline with point topoint service on both short shor t haul and long haul routes
Offers a differentiated flying experience that includes pre-assigned leather seats and free DirectTV for every passenger
Steering clear of heaviest traffic i.e. under served market, JFK as home base
Targeted the price sensitive leisure traveler and small business traveler
Founded by David Neeman in February 1999, under the name "NewAir.” Then started on February 11th , 2000
USD130 million for initial capital
Veterans Veterans from from airline industry as top management management (started from from scratch)
People Factor
+ Founder
President & CEO
HR Manager
VP Flight Operaons
David Neeleman
Dave Berger
Ann Rhoades
Al Spain
“To me, the most important element was caring”
“The world`s first paperless airline”
“You need to go to where where people want to fly” “With our friendly service and hassle free technology…”
“An esprit de corps that was fun for crew and customer” (focus on people and keep the company union free)
Business Issues
+ Tools McKinsey 7S
Objective Hard Elements
To improve the performance of a JetBlue:
Structur e
Strategy
Examine the likely effects of future changes within JetBlue JetBlue
System
Shared Values Values
Determine how best to implement a proposed strategy
Challenge Skills
Style
Staff
Soft Elements
Next year will be expanding, opening new facilities (second hub-city)
HIGH employees turnover every year, year, will be ineffective cost (as company promise of providing a cost-effective)
Output
Maintain its success through long periods of sustained growth
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Analysis Anal ysis #1
Elements
Key points
Strategy
Cost leadership
Structure
Non hierarchal
System
IT system
Skills
Customer oriented
Staff
Solid teamwork teamwork
Style
Manager as Coach not boss
Shared Values
5 Core values: Safety, Caring, Fun, Passion, Integrity
Analysis Anal ysis #2
+ 7S Matrix 1: 1st priority that need to be change 2: 2nd priority that need to be change Shared values Shared values
Strategy
Structure
System
Skills
Staff
Style
2
2
2
1
1
1
2
Strategy
2
2
1
1
1
2
Structure
2
1
1
1
2
System
1
1
1
2
Skills
1
1
2
Staff
1
2
Style
2
The right competency is the right asset
Shared values
Business Solution
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Skill
1st priority to be improved
System
Staff
Shared Values Values
nd
Style
Structure
2 priority to be improved Strateg y
+ Elements
System
Recommendation Initiatives
Integrated system i.e. ERP Reward system: opportunities for learning & growth Performance Management System
Skills
Develop Develop business management competency Training & development
Staff
HR Planning Retain good talent through recognition & development
Style
Focus on internal inter nal and integration such as coaching, mentoring, monitoring
Structure
Empowering Empowering functional and division structure str ucture
Strategy
Differentiation, integration unit, parts and service ser vice
Shared Values
Enhance the commitment of 5 Core values: Safety, Caring, Fun, Passion, Integrity
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Lessons Lear Lear ned
1.
Implementing core values of corporate corporate culture on company`s policies, practices and systems
2.
Bu B u i l d s o l i d t e a m w o r k t h ro u g h i n n ovat ov at i v e a n d entrepreneurial culture in result to competitive environment
3.
No N o nhi nh i e rarc rar c h i c a l o rgan rga n i za zatt i on a l i g n e d with wi th t h e i r innov innovative ative customer oriented service ser vice strate strategy gy
4.
Mana Ma nagi ging ng ta tall e nted nt ed exec exe c utiv ut ive e p eopl eo ple e with wi th t hei he i r diversity to create shared values
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Appendix
Industry Anal Analysis ysis
+ Porter Port er 5 Forces
Threat of new Entrants
Supplier Power HIGH Boeing and Airbus the only suppliers of aircraft for commercial
LOW LOW Profit margins are low High labor High operation cost High fuel cost
Rivalry Competition HIGH Same route, target market, price
Threat of Substitutes MEDIUM Car Train i.e. AMTRAK
Buyer Power HIGH Price sensitivity
“ATTRACTIVE INDUSTRY”
+ JET BLUE competitive advantages
High standard business operation models :
Top Management focus and commitment
Technology, Service quality, Efficiency
High Competitive Human Capital Management
Values V alues
Safe fetty
Care
Fun
Passion
Integri ritty
Value V alue orientation
+ Integrated Integr ated internal & external expecta expectations tions
Internal
Value
External orientation
Working environment
Safety
Service , expectation
Love as human being
Caring
Personal Personal service
Commitment Experience Motives
Integrity Fun
Reliability Joy Joy experiences Spirit
Passion
Internal employees Understand and meet customer expectations External parties
Hard Elements #1
+ Strategy
OBJECTIVE Bring humanity back to air travel
Cost leadership
Arenas Ar enas
Low fare commercial Underserved but over priced US cies
Vehicles V ehicles
Start from the scratch single aircra model i.e. purchase his own airline (A320 standardized)
Differentiator
Service and amenies compare to other low cost carrier i.e. leather seats, direct tv
Staging
2 planes to 10 every 5 weeks 9 departures 50 per day in 1 year
Economic Logic
Cost advantages steering clear of heaviest traffic e.g. JFK home base, paperless cket
A Strategy Map Productivity Strategy
Financial Perspective Improve Cost Structure
Growth Strategy
Long-Term Shareholder Value Expand Revenue Opportunities
Enhance Customer Value
Customer Value Proposition
Customer Perspective
Price
Quality
Functionality
Service
Product / Service Attributes
Relationship
Operational Management Customer Management Processes Processes
Internal Perspective
•Supply •Distribution
Brand
•Selection •Retention •Growth
Innovation Processes •Design/Develop •Launch
Image
Regulatory and Social Processes •Safety and Health •Employment
Human Capital
Learning and Growth Perspective
Information Capital Organization Capital Culture
Leadership
Teamwork
+ System
Hard Elements #2
Pa Pay y for performance system
improve their performance Motivate all staff to improve Customized Employment Packages “People don’t complain when they have a choice Listen to employees concern The organization need to use innovation and new technology to make
decision-making process quicker
Structure Non hierarchical organizational Manager & supervisor function as coaches rather than bosses The organization need to reconsider its structure as they are expanding,
ensure ensure its align with its next future challenge
Soft Elements #1
+ Skills
Creative & Customer oriented
Great two-way communications Committed to self –improvement
Necessary training and development programs need to be organized in a systematic manner and thus it has to be ensured ensured that all members of the workforce are are equipped with skills necessary to achieve a high level level of customer satisf action
Staff Health (No alcohol and drugs) Solid teamwork Hire the right people
Criteria based on 5 cor core e values
Cultural fit Only capable and promising candidates need to be employed Employees have to be provided growth potential
Soft Elements #2
+ Style
Values s: Style of organizational work of JetBlue can be seen from Core Value SAFETY CARING INTEGRITY FUN PASSION Believe to work as a team (solid) Care to all employees
encourage employee to balance between work and family “The most important element was caring” “I want JetBlue care about people from end to end” Keep transparent to all JetBlue’s stakeholders Manager would function as coaches rather than bosses
friendly with fewer hierarchies hierarchies and a smaller chain of Innovative and friendly with command
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Soft Elements #3
+ Shared Sha red Val Value uess C o r p o r a t e C u l t u r e
Management Practices Objective Bring back humanity back to travel
Core Values V alues Safety, Caring, Fun, Passion, Integrity
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