The Qantas-Emirates Partnership – constructing the Wagon Wheel

On March 31st, Qantas flight QF1 departed for London Heathrow, not via Singapore, its traditional hub, but via Dubai, home to Emirates, the world’s biggest international airline.

The partnership between the two airlines had become a reality.  Implementation Is All About Implications - The Wagon Wheel Way

You might be wondering about the connection between one of the most ancient and slowest forms of travel and the prodigious size, range and speed of the Airbus A380, the flagship of the two airlines.  If you are read on…….

The Wagon Wheel Way™

The Wagon Wheel Way™ is the world’s first Enterprise Operating System (WWWEOS) that maps the complete operational process from a) planning and b) execution to c) monitoring, measuring, adapting and d) revising.  The EOS uses the analogy of a wagon wheel where planning is likened to the wagon wheel’s construction; execution to the wagon wheel’s operation; monitoring, measuring, adapting to wagon wheel maintenance and lastly, revising to reconstructing the wheel.  And just in case you are thinking – what about communication – that’s the grease on the axle that keeps the wagon wheel rolling with the minimum of resistance – the good oil.

The WWWEOS was developed to demonstrate that the genesis of great execution begins the moment the planners sit down to plan.  What most planners ignore is that planning has a human dimension.  Integrated within the WWWEOS is a list of 36 barriers to execution.  In addition to each of these barriers being allocated to one of the four stages of the operational process, they are also divided into barriers of a “technical nature” and those that relate to  shortcomings of management in managing staff.  Whilst it should not come as a surprise to learn that 13 out of the 14 barriers relating to execution are people management issues, it may surprise that 4 out of the 13 barriers relating to planning also involve people.  Given that each barrier is placed in a specific sequence, it is a sobering thought that the first people related barrier is Barrier No.2 and so it follows that a failure to address this barrier will have an adverse impact on the subsequent quality of the execution.  The overall breakdown, incidentally, is 17 technical barriers and 19 people ones.  Thus technical and people management skills are equally important to the execution of the plan.

A wagon wheel was chosen as the model for the EOS, primarily because the construction of a wagon wheel mirrors the way in which plans should be developed.  The process is applicable to any kind of plan but really comes into its own when major and far reaching strategic plans are involved.  And make no mistake, the Qantas-Emirates alliance is BIG.  Alan Joyce, CEO of Qantas refers to the partnership as “one of the most strategic initiatives that we will ever do” and his opposite number at Emirates, Tim Clark, summed up the deal in one word – “seismic”.

Strategic planning – what we are going to do

Developing a strategic business plan involves three stages.  The first stage is to decide what you are going to do and the second is to decide how you are going to do it.  Most organisations spend too little time working on the second stage.  The third stage is an initial action plan based on “how we are going to do it” not on the first stage – “what we are going to do”.  “What we are going to do” is akin to constructing the hub of the wagon wheel.  No matter what specific processes or tools are used, the completed hub should consist of five components – a) the markets (customers) to be served, b) the products/services to be provided, c) the activities required to provide these products and services, d) the competitive strategy, and e) the competitive advantage – what is it that you do – currently or potentially – that is both different and better than your direct competitors.  From what I read, Qantas and Emirates have developed this – the first stage – to a high degree and if the execution of the current strategy meets both partners’ expectations, I think you will see the partnership extended to cover the trans-Pacific theatre as well.  It’s worth noting that Emirates already operates trans Atlantic services and has recently added an additional service from Milan to New York.

Strategic planning – how we are going to do it

Although it would have been driven by necessity, one of the most impressive features of the alliance so far has been the thoroughness with which the second stage has been tackled.  On the WWWEOS, after the hub has been built the spokes are inserted before the wooden wheel rim is attached to the spokes.  The spokes are the feature of the wagon wheel that makes it so appropriate as a planning analogy.  They both separate the second stage – “how we are going to do it” from the first but at the same time, the spokes demonstrate the connection between them.  The question that Qantas and Emirates management had to ask themselves countless times was – what is the impact of what we are going to do on every single function in each of the two airlines.  Joyce refers to “hundreds and hundreds of issues that had to be addressed”.  Within Qantas, ten workgroups were established to work on the commercial aspects of the alliance; the operational issues in moving the eastbound Qantas hub from Singapore to Dubai; flight operations; catering, baggage handling and cleaning services contracts, check-in processes and procedures, and crew hotels.  As part of the commercial aspects of the alliance, the two frequent flier programs had to be merged; fares, baggage allowances and credit terms aligned; approaches to corporate customers coordinated and complementary PR and media programs sorted.  On the IT side 22 different projects were tackled to bring the two airlines’ IT systems into sync with one another.  Action plans by the score will have been drawn up and activated as the roll-out of the partnership commences.

The final step in the construction of the wagon wheel is placing the metal band around the rim of the wheel.  The band represents the two key resources of any organisation – people and money and I think it’s fair to say that the strategic issues that have confronted Qantas on its eastbound international routes have been exacerbated by the series of industrial disputes between management and unions representing flight crews, cabin crews, engineers and baggage handlers.  This has resulted in low morale and a consequent drop off in customer service in all its various forms.  The Qantas brand has suffered as a result.

The human factor in planning

I am not sufficiently close to the action to be able to comment on these, currently, resolved disputes but one of the contributing factors has been poor communication by Qantas management with its employees.  Communication is the Central Nervous System of any organisation and if it’s damaged paralysis is the result.  Of course, I’m talking about communication between people not computers and as mentioned beforehand, four out of the 13 barriers to execution at the planning stage are people related.  Barrier No.2 flags the necessity for explaining to staff the rationale behind the planned strategy.  Everyone impacted by the new strategy and the subsequent changes needs to appreciate and understand the thought process behind it.  Not everyone will be won over but 90 – 95% will be, but if no convincing explanation is given, this percentage will drop dramatically with a consequent impact on execution.

Barrier No.5 refers to the necessity to involve those charged with the plan’s execution at the planning stage – particularly Stage 2 – how we are going to do it.  Because of the range and complexity of the issues to be resolved, it would appear that Qantas and Emirates have called on the specific expertise of many staff at all levels of management.

Barrier No.9 highlights the potential need to make changes to the organisational structure and such changes would appear to be fundamental to making the partnership work.  My colleague, Dr Andrew Humphries of SCCI, an acknowledged expert in strategic alliances and what makes them work, would recommend that both Qantas and Emirates appoint Partnership Relationship Managers to oversee both the execution and on-going operation of the alliance.

Finally Barrier No.13 draws attention to one of the most common management failings that, if left unresolved, will guarantee that the plan will never live up to the expectations of the planners.  In a great many cases, the work load associated with the new strategy is simply added to that associated with the current one and in these circumstances with not enough hours in the day, the focus stays on the urgent jobs rather than the important ones.  I’ve no doubt that much midnight oil has been burnt but the stakes – for Qantas particularly – are so high that it seems unlikely that this barrier would present too much of an obstacle.  The necessary resources would simply have been made available.

In summary, the wagon wheel has been constructed and the roll out has begun.  In the WWWEOS model, the emphasis on planning gives way to an emphasis on execution.  The five key requirements for great execution are a) organisational alignment, b) management of change, c) leadership at all levels, d) teams and teamwork and e) employee engagement – in that order.  In terms of customer service Emirates set a high standard and it’s imperative to the success of the partnership that Qantas employees do likewise.  Jan Carlzon, the former CEO of Scandinavian Airline Systems (SAS) in his book “Moments of Truth” explained the origin of the title as follows.  “Last year, each of our 10 million customers came into contact with approximately five SAS employees, and this contact lasted an average of 15 seconds each time.  Thus SAS is “created” 50 million times per year, 15 seconds at a time.  These 50 million “moments of truth” are the moments that ultimately determine whether SAS will succeed or fail as a company.”

Employee engagement is usually defined as the willingness of employees to undertake “greater discretionary effort”.  The endless opportunities that employees have to go beyond the call of duty to serve the passengers’ needs.  It’s what happens when staff feel good about the organisation they work for.  The starting point is a good plan and good planning and the Qantas – Emirates partnership seems to exemplify that.  So the wagon wheel has been built; it remains to be seen how effectively it operates.

The complete Wagon Wheel Way Enterprise Operating System is explained in my book  “Execution to Die For – the Manager’s Guide to Making It Happen.  The book is available in hard or soft copy from Amazon and in hard copy from my web site http://www.planstoreality.com.au.  You can download the first chapter free from my web site and see the reviews at http://www.executiontodiefor.com

 

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