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United Airlines Case Study



This presentation provides an overview of the change management work completed in support of United Business Transformmation Office. I served as the BTO\'s change communications lead for all ...

This presentation provides an overview of the change management work completed in support of United Business Transformmation Office. I served as the BTO\'s change communications lead for all operational changes.



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  • Introduce yourself Recognize where people might be mentally at this point in the conference. I.e., “ Thanks for sticking around -- The last two days have been packed with information. I don’t know about you, but personally, my head’s feeling a bit full.” “ So I appreciate this opportunity to share our story with you. It’s a story about how we changed our approach to communications to transform United’s business.” “ I hope the following presentation will provide you with some strategic approaches as well as practical applications to meet your own organization’s challenges.” Introduce the exercise: “ Before we get into the meat of the story, I wanted to give you a glimpse into what life on United’s frontline is like.”
  • “ If you recall back to December 2002, the outlook for United was bleak.” Pick up detail from building slide bullets: 1: Our filing represented the 6 th largest bankruptcy in history. And given our past performance with complex management issues – many people doubted our ability to come out of Chapter 11 at all. 2: Historically, UA was held up as an example of “what not to do” with labor relations. Our corporate governance structure included two union Board seats with ultimate veto power, making it practically impossible to affect positive change. 3: We had to meet monthly DIP covenants set by our creditors in order to secure continued financing through the restructuring effort. A missed payment meant possible liquidation. 4: We launched a global restructuring effort from the governance structure – to our labor agreements – all the way to frontline business processes. The restructuring effort was complete and touched every aspect of our business. 5: And of course, the media never let us forget just how great our challenge was. On a given day, we had at least 10 newspapers writing about us. “ All tolled, we were in survival mode. We had to manage through complex change and re-establish confidence in our ability to run a competitive business. If we didn’t get it right…United went away.”
  • “ That’s the story we’ve all heard 100 times – but to Paul Fishel, our Ramp Operations supervisor at ORD, it played out in very real situations every day.” Pick up detail from builded slide bullets: Build 1: “While corporate had to field media questions on the particulars of the restructuring and UA’s competitive positioning, our frontline supervisors had to field employee questions about changes in pay, staffing, work rules and schedules. Often, these particulars weren’t determined, so supervisors didn’t have the immediate answers employees were looking for.” Build 2: “The company held a strict line on speculation. Our unions did not. That meant that many of our unions launched aggressive campaigns with employees with information that was not always based on fact and often inflammatory. Our supervisors had to battle these campaigns, while sticking to facts and not reverting to speculation themselves.” Build 3: “On a given day, our employees could turn to any number of papers to read about the Bankruptcy proceedings. Media speculation fueled our internal rumor mill.” Build 4: “Absenteeism rose dramatically as employees tried to use up allotted sick and vacation time, in fear of losing it. Our supervisors had to jump through hoops to make sure operations continued to run on schedule.” Build 5: “And of course, we had an airline to run with customers to serve. Supervisors really battled to keep employees attention.” Build 6: “This was survival in the trenches.”
  • “ In order to meet these challenges, United formed the Business Transformation Office, or BTO.” “ Here’s a quick snapshot to give you a sense of the scope, breadth and complexity of the effort.” Talk to slide builds: “ The steering committee and program management office was responsible for the $1.4 billion improvement in operating income.” Build 1: “They also oversaw the activity of 7 program offices. These offices represented functional areas of improvement. The rest of our story will focus on the Operations program , which was responsible for [pick up detail from bullets on slide.]” Build 2: “Now each program office had a series of project teams underneath it. The Operations program had a total of 11 project teams to reach its $150 million operating income improvement goal.” Build 3: “And just to add another layer of complexity, each project team had a series of individual projects with specific process, technology and behavioral changes to implement. As you see here, the Operations Program’s Airport productivity team was responsible for 4 key projects across the entire global network of airports.”
  • “ And here’s what that looked like to Paul…” [Pick up detail from slide by reading a couple of the arrows pointing into Paul’s picture]. Talk to build: “ And besides the sea change being introduced by corporate, our supervisors also had to deal with a constant barrage of messages and motives by our union groups and the media.” “ This is the starting point of our communications work with the BTO – we recognized that the complexities of the effort were amplified on the frontline.” “ We realized that in order for the BTO to be a success, we had to keep our frontline supervisors’ viewpoint central to our communications strategy, planning and roll out.”
  • “ And that meant making a fundamental shift in how we approached our jobs as communicators.” [Pick up detail from slide, “from state”] Build 1: [Pick up detail from slide, “to state”] Build 2: “At core, it meant changing our results orientation – from a service provider to a business leader, accountable for real results such as productivity, cost improvement and revenue generation.”
  • “ Given the abundant complexity, we kept our approach simple.” [Pick up detail from slide -- Don’t spend a lot of time on the bullets, as the following slides will get into greater detail on each approach.] “ I’m not going to spend a lot of time on this overview slide, because we’re going to get into specific examples of how each approach was applied on the frontline.”
  • “ I hear a lot of talk about communications ‘getting a seat at the table.’ But when I’ve asked what that really means, I’ve found people often have difficulty articulating a clear vision for our role.” “ With the BTO, we didn’t wait for someone to invite us to the proverbial table – we created our own seat. Here’s one example of how we did that.” Talk to building slide bullets: Build 1: “Through ‘project management lite,’ we created an intra-team communications infrastructure. Rather than taking the traditional communications tract and reporting on each initiative after the fact, we looked at how communications worked among the project teams and created a logical, systematic way to streamline how information flowed among projects, divisions and geographies.” “ We provided weekly reports for each of our 4 divisions, like the one you see here for Airport Operations. Each report provided a snapshot of BTO activity: What’s happening over the next month, key successes, issues that needed to be addressed, milestones, and where to turn for more information. The benefits of this system were manifold.” Build 2: “First, it simplified hundreds of detailed project management plans into a simple and easy-to-use format for leaders. It organized information according to activity happening within the business unit vs. individual projects.” Build 3: “Second, it provided our airport leaders with visibility into what was happening when at their locations. The tool allowed airport managers to better plan resources and operational contingency strategies throughout implementation.” Build 4: “And finally, the system made divisional reporting easier – we used this system to feed into our monthly financial reporting communications to our operations SVPs.” “ Originally, we distributed the reports to our operations leaders, airport managers and members of the Operations project teams. However, leaders found the communication so valuable, that people from across the organization requested being included in the distribution. Managers forwarded the reports to their team members and supervisors used the materials in briefings and planning.” Build 5: “The takeaway here is that as communicators we have a tremendous opportunity. We can act as the driving force of our organization’s change initiatives.”
  • “ We’re all being asked to do more with less these days – and it’s not a problem unique to communications.” “ Therefore, we recognized the importance of prioritizing our work according to the greatest risks and opportunities to business performance.” “ We used a behavioral risk assessment model developed by our partner Gagen MacDonald to help ensure we didn’t ‘boil the ocean.” “ Here’s an overview of that process. You see we have two example projects with similar projected benefits.” “ The catering project was an effort to renegotiate contracts with our vendors and achieve more favorable, cost-effective terms.” “ The airport project was geared to improve productivity across our core operational processes within our airports.” Build 1: “When you delve deeper and look what’s required of employees, you see that the impact of the catering project was minimal – employees would continue to work with the same vendors and perform the same tasks. While with the airport project, employees jobs would be dramatically altered [pick up detail on slide] .” Build 2: “You see a similar situation when you add the customer layer to the equation – airport productivity enhancements present a significant risk to the overall plan.” Build 3: “We used this system to prioritize our work. In the case of the catering project, we kept to the general corporate communications planned. With airport productivity, we used the assessment to present leaders with the business case for additional communications focus and resources.” “ The headline here is…We can’t do everything. When you tie your work to the results that leaders are accountable for, you’ll gain their support and the help you need – in budget and staffing – to get the job done.”
  • “ From the behavioral assessment, we identified priority projects requiring greater communications support.” “ The nature of each of these projects called for a localized effort with tactical activity built around the projects’ particular cultural, logistical and operational implications.” Talk to the building slide bullets: Build 1: “With each priority project we created individual project plans, tailored to their specific needs. Our approach was simple – focus on the employee behaviors you’re trying to inspire and work back from that point. In that way, all of our communications activity focused on driving action vs. information dissemination.” Build 2: “We used the simple “plan on a page template” you see here to build strategies to drive that action. Each plan identified activity to answer the three questions of effective communication –” “ Clarity – What do you really want me to do?” “ Information – What do I need to be successful?” “ Inspiration – Why should I care?” Build 3: “And, we built the plans with frontline supervisors as our primary channel – our efforts focused on improving how interpersonal communications between frontline supervisors and employees happened…I’ll provide more detail on that in a moment.” Build 4: “The upshot here is that we paid attention to informal channels of communication. We recognized that no amount of corporate positioning and postulating would work if employees’ experience with their direct managers did not reinforce our efforts.”
  • “ So, what did that theory look like in application? Here’s an example project to illustrate.” “ Flex resourcing was a project designed to change how we staff our planeside gates – the people who load and unload our planes.” Build 1: “The change was common sense – “ “ A move from a static staffing model with 3 employees staffed full-time at each gate…” “ To a flexible model in which supervisors drew from a resource pool to put employees where the work is – at our gates as planes prepared to arrive and depart.” “ The change represented a significant shift for operations – It meant changing a 25-year-old practice and a historical precedent set with our machinists union.” “ While the change was sensitive, we understood the opportunity to help our frontline supervisors manage through it.” Build 2: “Generally, I think corporate functions have been guilty of the “corporate swoop.” You know, when a corporate function comes into operations and tells them what they need to do. In our case that meant process engineers dreaming up process improvements for airport operations that didn’t work when put into practice on the frontline.” “ To combat ‘the swoop,’ we formed real world application teams – with frontline supervisors and our union stewards/leads. The application team reviewed the proposed corporate process, revised it based on their operational know-how and created a phased roll out schedule.” Build 3: “We took our application team a step further and employed them as champions on the frontline. We provided them with communications tools and training to effectively and proactively communicate the upcoming changes to employees. And we’ll look at some of those tools in a moment.” Build 4: “Of course facilitating this team wasn’t easy. I think the first half day of discussions was spent in yelling bouts across the table. But I’ve learned that it’s a lot easier to bring people around to change by involving them.”
  • “ We also recognized that we were asking a lot of our application team members…remember, they still had an airline to run.” “ If they were to be successful champions, we couldn’t add yet another thing for overworked people to do…we had to provide them tools that would make accomplishing their daily jobs easier.” Build 1: “One of the core tools we provided was a message platform. It’s a tool based on a political campaigning model. It provided supervisors with a single platform for all communications.” “ Rather than trying to memorize pages of detailed talking points, supervisors only had to become comfortable with four core concepts and put them in their own words. We trained supervisors on how to apply the platform in every day situations.” Build 2: “With the unions running on rumors and speculation, we recognized our supervisors were at a disadvantage. So, we made sure that we stayed in front of issues and provided them with information before it was released in the media or to employees. That way, our supervisors had extra time to prepare for employees questions around key issues.” Build 3: “I hope you see a common theme here…rather than providing a series of tools, we actually focused on instilling the right communication behaviors – like telling a compelling story, providing the right context, preparing for questions in advance of pre-shift meetings – Part of that effort was creating opportunities for dialogue.” “ Throughout the change process, supervisors held open meetings for employees to provide their feedback and ask questions. Of course, we couldn’t answer all questions, but the meetings went a long way to re-establishing trust.” Build 4: “The thinking here is that no matter what change you’re trying to implement – you’re running a political campaign to win the hearts and support of employees. And like a political campaign, it’s not about you…it’s about the constituents you serve.”
  • “ The results speak for themselves…” Pick up detail from slide … maybe call out the relevance of breaking performance records despite the monumental changes and industry/court pressures.
  • “ But at the end of the day, I come to work because of Paul. And I’m most proud of our team’s work because of the difference communications made to him.” Read slide bullets (they build) …[ No more really needs to be said here. These are direct quotes.]
  • “ Finally, I’d like to share a few implications I see for communicators…” Build 1: “At the onset of any initiative, we as communicators must ask ourselves ‘ How do we want to contribute?’ “ “ When you tie your work to the company’s financial and operating results, you sign up for a higher level of responsibility and that means greater personal and professional risk. Are you prepared to really put skin in the game?” Build 2: “Generally speaking, our profession is comprised of ‘creative types’…writers, journalists, humanities majors…who take great pride in our creativity, and sometimes in the fact that we aren’t ‘numbers people’.” “ As our profession evolves, we need to get comfortable reading and working with financial and operating plans…and we need to do it quickly. Otherwise, we’ll struggle to define – in leaders’ language (aka business performance) – the real value we can add.” Build 3: “And, finally, we have the challenge to try to walk in the shoes of our frontline folks. It’s a solid litmus test for our plans and will open doors to new, creative communications solutions.”
  • Thank room for their time. Open floor to questions.

United Airlines Case Study United Airlines Case Study Presentation Transcript

  • Evolving Communication toTransform United’s OperationsStrategic Communication ManagementFall Summit 2005 1
  • Our World in December 2002 • World’s Sixth Largest Bankruptcy • Historically Tense Labor Relationship • Aggressive Debtor In Possession (DIP) Financial Targets Require a $1.4 Billion Improvement in Operating Income • Global Restructuring Effort • Constant Media Spotlight Survival
  • The World According to Paul • Concerns of layoffs, pay cuts, outsourcing • Aggressive union campaigns based on speculation • Rumor mill fueled by global media spotlight • Rise in absenteeism • Meeting performance objectives despite daily distractions Survival
  • The Business Transformation Office Steering Committee Program Management Office Employee Marketing, Code Share Regional Jets Operations Policies Sales Policy Purchasing Airspace Airport Fuel Airport Service Cabin IRROPS/Purchasing Maintenance Catering Management Productivity Consumption Automation Cleanliness OPETE Planeside Operations Program: -Improve operating income by $150 million Bag Room -Maintain operational & service performance Lobby -Drive change across four business units Gate Staffing -Implement across the global network of airports
  • What That Looked Like to Paul Co rpo Co an l e ns rat s Ch edu ge ul e T ta y h nt pe Sc s & s ci es New Poli Tech nolog New y MEDIA ON Re in F NI on d du orc s e ct e U ng cat cy io fi n ie pli upt Br om kr 25-Year-Old Processes Changing C an B
  • The Challenge: Shift Our Paradigm From To • Reporting on business • Driving the business • Formal, top-down • Interpersonal communications communications • One-size-fits-all approach • Tailored approach • Focus on communication • Focus on behavior change vehicles • Information push • Influencing front-line conversations Results Orientation: Results Orientation: Meet Service Requests Drive Performance ©2005 Gagen MacDonald LLC
  • Our Core Approach• Create a seat at the table: Use communications to improve project teams’ efficacy• Don’t boil the ocean: Prioritize work according to greatest risk to the business• Recognize all politics are local: Give the BTO life and breath where it needs to be delivered – the frontline• Teach them to fish: Equip supervisors and managers to lead change on the frontline, every day
  • Create Seat at Table: Project Management Lite Week of January 27, 2003 • Intra-team communication AIRPORT OPERATIONS REPORT infrastructureLast Monday, we met with Pete McDonald and Larry DeShon for our monthly financial performance review of the AirportOperations projects. The meeting went well: We’re on the right track and meeting our performance commitments.During the meeting, we discussed Dec. 2002 performance and projections for Jan. 2003. Here are the highlights forAirport Operations: December 2002 Performance January 2003 Performance • Strategic view across the entire business unit • Manpower was better than plan for the month and • Bring Sick Leave down. To do so, we will year-to-date. educate supervisors on compliance rules, listen to • Productivity continued to improve. Dec. finished 15 their suggestions and provide necessary support. percent better than plan, with a 5.5-percent • Acquire and install curbside boarding pass improvement from plan for the year. printers on time to ensure related projects stay • Overtime was better than plan for the month and on track. year-to-date. • Sick Leave continued to be the primary challenge, coming in 8.2 percent worse-than-plan in Dec. and 4.2 • Complete detailed project plans by Jan. 29. We will baseline these plans to set measurement targets for the rest of the year. • Visibility into change for percent worse-than-plan for the year. • Sick Leave increased the meeting:One headline came out ofby xx percent. We must meet our budgets in January. With the continued hard work ofour teams, we should be confident of success. contingency planningEASY CHECK-IN UNITS (ECU):Last Week’s Activity (1/20): Updated the on-line demo of ECU with the new Flight Change functionality and process flow. Milestones The team continues to stay on target for the mid-Feb. ECU deployment at BWI and LGA; Q1 implementation of • Streamlined monthly divisional reporting process Secured the availability of the construction/electrical application functionality for NRSA; and, Q2 documents for BWI. implementation of International functionality. Completed the electrical and cabling work for LGA. Worked closer toward documentation for BAA approval at LHR. Challenges: Completed SJC and IND site surveys and layouts. Potential delay of DEN installation. Contributing Act as a neutral venue to drive This Week’s Activity (1/27): factors include airport approval, on-site vendor lead Continue installation at LGA & BWI. times for cabling and electrical work, and additional Training at DEN and SMF. (complicating) infrastructure requirements for other Hold conference call to determine strategies for issue systems implementations (outside ECU). prioritization, issue resolution and resolution at DEN (See Challenges).  Government mandates and UK data requirements may push back scheduled completion of International user requirements beyond the TSA prototype to the first week of Feb. accountability ECU Team PRIORITIES for Week of 1/27:  Develop strategies to mitigate DEN risks (See Challenges).  Prepare for LGA installation on Feb. 3. Questions about ECU? Call Lynda Oros at unitel 700-4591 or Dixie Blaylock at unitel 700-7034.
  • Don’t Boil the Ocean: Behavioral Risk AssessmentObjective Employee Impact Customer Impact RiskCatering Vendor N/A Slight risk to service LOWContracts levels$29 million Tie your work to the results that matterImprove Airport • New processes Fewer customerProductivity service reps. • New technology HIGH$28 million Significant risk of • New roles service interruption • Schedule changes Based on a Gagen MacDonald LLC Planning Model
  • Recognize All Politics Are Local: Tailored Project Plans Airport Productivity: Flex Resourcing • Inspire employee action vs. March - April Support March 2003 “show and tell” Objectives:  Maintain on-time leadership while improving baggage-handling performance by at least 20 percent (measured by DOT standards) by year-end 2003.  Move from No. 9 on the DOT performance list to the mid-pack (No. 4 or 5) by year-end 2003.  Decrease the B-side On-line Transfer (ONTR) by 10 percent.  Decrease CG delays on B-side by 50 percent. Engage Ramp Service People in the new Flex Resourcing Process. • Tie to three elements of   Foster a culture of accountability and minimize pushback through employee involvement.  Foster a better relationship between WHQ and the stations. Key Activities Planeside Activity communication & Affected Audiences:  Description – Pilot program to test process changes at ORD and DEN. Move to “floating” system for gate crews (crews assigned to a larger zone vs. a gate); technology enhancements to promote accountability and performance evaluation.  Key Audiences – Ramp Service Employees, Ramp Crew Supervisors, Operating Managers. Risks &  Culture – Today’s culture does not support accountability, which will be an organic Challenges: component of the new processes/systems. Employees who have not been held accountable • Focus on interpersonal for performance in the past may resist their Supervisors holding them accountable now.  New Technology Enhancements – Supervisors must use new system functionality. With DEN, this means feeling comfortable to start using the system in the first place. Most likely, DEN Supervisors will require more-intensive training on the tool. interactions with  Employee Involvement – Recent layoffs, pay cuts and a historically tense relationship between company and labor may all contribute to an unwillingness to cooperate. The impact may be felt in a variety of ways: verbal pushback, work slowdowns, sabotage (“See, I told supervisors you this couldn’t work”), etc.  Consistency of Leadership Skills – The skills of our ORD board leads and supervisors vary. Leadership training (process, skills, real-time decision-making, communications) is required to rollout the gate crawl beyond the pilot program zones.  DEN Management Support – Unlike ORD, DEN’s management team is not actively engaged in (or wildly supportive of) the gate crawl concept. Significant coaching and pre- work is required before the productivity team begins the gate crawl program at DEN.  Limited Automation Support– Ramp employees are taking on more work without the advantage of enhanced systems/technology to soften the impact of the recent reductions (Cf. CSR and Gate changes). Leverage  Ramp employees are competitive with other stations and zones (cycle time and MBTA). Influence frontline conversations where Points:  SFO already uses floating planeside crews. We have an internal resource (best practice) from which to learn.  Most employees care about the customer and want to be involved. Strategies:  Give employees a reason to care about performing: Make top performers visible. the real communication happens    Complement supervisors’ and board leads’ process training with interactive, problem-solving sessions for application. Leverage leadership in a visibility effort that centers on candor and involvement. Use face-to-face interactions as the primary communications vehicle, with supervisors and board leads as the primary messengers.  Solicit feedback and involve employees in finding solutions: Make their contributions visible.  Integrate communications between Fuel Consumption and Airport Productivity teams.Based on a Gagen MacDonald LLC Planning Model
  • Recognize All Politics Are Local:Avoid the “Corporate Swoop” Flex Resourcing • Employees go where the work goes • Engaged union leads and supervisors in “real world” application team • Team acted as champions on the front line Involve employees in change that affects them and they’ll own it
  • Teach to Fish:Don’t Create Yet Another Thing To Do• Telling a compelling The whole industry has The manpower cuts are a story changed. What worked five years ago, won’t work reality. Now, we have to work smarter, so we’re today. If we don’t swim, putting our resources• Staying in front of we’ll sink. where the work is. issues We have to give customers a• Creating opportunities reason to choose United: bags play a huge role in that to build rapport choice. We’re leading the We’re learning from our company. ORD was mistakes and listening to Like politicians, we’re out to win chosen because we the customer – and to our perform and deliver. employees’ vote of confidence employees. Adapted from Gagen MacDonald LLC Communication in Action™ Process
  • Results• Improved our cost structure: – Achieved $229 million in cost savings – Results 48.8% better than plan – Productivity 16% – Costs more than 20%• Record-breaking operational performance: – Ranked No. 1 in industry for on-time departure (YOY) – On-time departure 10 points – On-time arrival 4.3 points – Customer complaints more than 50%
  • But What About Paul? • “We created a ‘prove ‘em wrong’ culture where employees take personal accountability for performance.” • “We had access to information to manage issues before they became crises.” • “We had tools to battle the union campaigns and take back communications from the unions.” • “Involving employees created processes that stuck.” • “Starting small with pilot efforts made the change more manageable.” • “In the end, we weren’t isolated. Communications helped us present a unified front to employees.”
  • Implications for Communicators• Put skin in the game• Get comfortable with financial and operating plans• Remember what it feels like on the frontline
  • Contact Morgan MarzecStrategic Communications Consultant, Gagen MacDonald LLC m.marzec@gagenmac.com 312.282.3321