Assessment Task 2: Memo to the CEO

This assessment task related to The British Airways (BA) Swipe Card Debacle case study. Please see case study below.

The aim of this task is to write a memo to the CEO recommending the need for change. As an OD practitioner, you are required to provide recommendations to implement the change and development. You are required to provide the CEO with rationale and implementation plan by supporting your claims and referencing to the body of knowledge you have learnt in this subject.

Case Study: The British Airways (BA) Swipe Card Debacle

The strike

On Friday, July 18, 2010, British Airways (BA) staff in Terminals 1 and 4 at London's busy Heathrow Airport held a 24- hour strike. The strike was not officially sanctioned by the trade unions but was a spontaneous action by over 250 check-in staff who walked out at 4 p.m. The strike occurred at the start of a peak holiday season weekend, which led to chaotic scenes at Heathrow. Some 60 departure flights were grounded and over 10,000 passengers left stranded. The situation was heralded as the worst industrial situation BA had faced since 1997 when a strike was called by its cabin crew.

BA's response was to cancel its services from both terminals, apologises for the disruption, and ask those who were due to fly not to go to the airport as they would be unable to service them. BA also set up a tent outside Heathrow to provide refreshments and police were called in to manage the crowd. BA was criticized by many American visitors who were trying to fly back to the United States for not providing them with sufficient information about what was going on.

Staff returned to work on Saturday evening, but the effects of the strike flowed on through the weekend. By Monday morning, July 21, BA reported that Heathrow was still extremely busy: "There is still a large backlog of more than 1,000 passengers from services cancelled over the weekend. We are doing everything we can to get these passengers away in the next couple of days."

As a result of the strike, BA lost around £40 million and its reputation was severely dented. The strike also came at a time when BA was still recovering from other environmental jolts, such as 9/11, the Iraqi war, SARS, and inroads on its markets from budget airlines. Afterwards, BA revealed that it lost over 100,000 customers as a result of the dispute.

The change issue: swipe cards

BA staff were protesting the introduction of a system for electronic clocking-in that would record when they started and finished work for the day. Staff were concerned that the system would enable managers to manipulate their working patterns and shift hours. The clocking-in system was one small part of a broader restructuring program in BA, titled the Future Size and Shape recovery program. Over the previous two years, this had led to approximately 13,000, or almost one in four jobs, being cut within the airline. As The Economist noted, the side effects of these cuts were emerging, with delayed departures resulting from a shortage of ground staff at Gatwick and "a high rate of sickness causing the airline to hire sessional crew to fill gaps. Rising absenteeism is a sure sign of stress in an organi- sation."

For BA management introduction of the swipe card system was a way of modernising BA and "improving the efficient use of staff and resources." As one BA official was quoted as saying: We needed to simplify things and bring in the best system to manage people. For staff it was seen as a "prelude to a radical shake-up in working hours, which would lead to loss of pay and demands to work split shifts." As one check-in worker was quoted as saying: This used to be a job which we loved but we are now at the end of our tether. What comes next? They will probably force us to swap shifts without agreement and all this for less money than working at Tesco [a supermarket]."

One writer argued that the heart of the issue is that the workforce wants respect; it was not until the strike that CEO Rod Eddington was even aware that "there was a respect deficit to be plugged." Specifically, staff were concerned that "BA will try to turn them into automata, leaving Heathrow at quiet times of the day only to be brought back at busiest moments, while not paying any extra for the disturbance. Women, in particular, want to preserve their carefully constructed capacity to balance the demands of work and home.

Although BA denied that the system would be used to make staff alter their working hours at little notice, staff did not accept this promise – wondering why it was being introduced in the first place if that was not the intended use. As one union official was quoted: "We know that BA breaks its agreements." Another worker said that the strike was meant to be a "short, sharp, shock" for BA: They would then be able to bring us in any time they wanted, which is just not on, especially for those of us with families.

The change process for introducing the swipe card

 Unions argued that the walkout was triggered by senior management at BA "abandoning talks over the introduction of smart cards and announcing their forced imposition at just five day’s notice." It was this unilateral decision by BA to introduce the swipe card, and a lack of adequate consultation with affected staff, that was cited as a key reason for the strike. Even in BA's pilots, who did not oppose at check-in system, were said to be sympathetic "with the ... check-in staff over the way that the airline had mishandled the introduction of the swipe cards."

One commentator labeled the change process as they "commercial disaster" serving as "an important warning about the dangers of management by diktat, certainly, but, more profoundly, about an incipient revolt against the close control and monitoring of our lives and movements that modern information technology enables."

The Economist argued that management is "big mistake was to introduce a new working practice at the start of the summer quarter when the airline makes all its money." Similarly, the Times wrote that this was a major management blunder: "to pick July, the start of the peak holiday season, to launch an unpopular new clock in system, is asking for trouble. To push through a scheme without realizing the extent of the resistance by those involved suggests a management aloof from the mood of its employees. And to allow managers to give contradictory statements on the use of the new cards seems guaranteed to ferment missed trust."

As argued, with 20,000 other BA workers using the swipe card system, "interposing them after months of inconclusive talks must have seemed-especially given the pressure to contain costs, with the airline set to report its worst ever quarterly loss of £60 million this week-a risk worth taking will stop it was a massive miscalculation of the workforce is mood." This miscalculation was related to staff cynicism and bitterness about the redundancy program that had been conducted, staff fears of lack of consultation, poor pay rates, and dissatisfaction with management having enormous knowledge on which to act in the future.