British Airways underwent a major reorganization in the 1980s to address financial losses. Lord King, the new chairperson, reduced the workforce from 59,000 to 39,000 employees, eliminated unprofitable routes, and modernized the aging fleet. King explained the reasons for the restructuring transparently to prepare employees for upcoming changes and prevent backlash. Within 10 years, the reorganized airline reported the highest profits in its industry.
9. British Airways restructures its entire organization
Why the reorg was needed : British Airlines is the largest
airline of UK. It was created in 1974 from four other
companies — BEA , BOAC , Northeast Airlines , and Cambrian
Airlines — taking to the sky with 215 aircraft supported by
50,000 employees, a level of staffing that was, even then ,
viewed as precariously oversized. The oil crises of the
1970s shrunk the airlines’ customer base, and its huge
staff resulted in massive financial losses.The company
soon developed a reputation for terrible service as a
result.
In 1981, British Airways brought on a new chairperson
, Lord King , who noticed that the company was
operating very inefficiently and wasting valuable
resources.
10. What the reorganization was :
To increase profits , King decided to restructure
the entire organization by reducing its workforce
from 59,000 to 39,000, eliminating unprofitable
routes, and modernizing the fleet. He repaired
the airline’s image by bringing in a new marketing
expert. Within 10 years, the airline reported the
highest profits in its industry: $284 million.
11. What they got right :
Before King began announcing layoffs , he
explained his reasons for the restructuring
to the entire company to prepare them for
the upcoming change. Without his
transparency , British Airways could have
experienced employee backlash and
negative press around all the layoffs. But
the chairperson always communicated
honestly and frequently to manage the
change.
12. Reorganization Done Right
These successful examples of
organizational change are instructive
and even inspiring. They show how
courage and thoughtful planning can be
rewarded when you put your
employees first and help them through
a period of upheaval by sharing with
them your vision for their new roles and
the future of the company.
13.
14. Wal-Mart
WhileWal-Mart is currently undergoing a major
organizational change since acquiring Jet.com , it’s
certainly worth mentioning how their efforts are
going thus far. In September 2016, the acquisition
was completed and by the end of January 2017,
hundreds of layoffs were made. Jet.com’s founder,
Marc Lore , has reportedly been studying the way
Wal-Mart is run, both internally and externally, and
from all appearances, some major changes are in the
works.
15. According to an internal memo obtained by CNBC,
Wal-Mart’s president and CEO Doug McMillon
wrote that “ we need more speed and less
bureaucracy ” and said that the elimination of
positions is part of the effort “to stay lean and fast.”
He added that although there would be layoffs, new
positions would also be created.
SinceWal-Mart began as a traditional brick-and-
mortar retailer, it makes sense that with their
growing online presence, as well as the online
presence of their competitors (e.g. Amazon),
changes within the organization would be needed..
16. One example is with their leadership
teams. Many consumers now shop both
online and in-store , resulting in
integrating leaderships teams that once
may have been separate operational
divisions , to one.
AsWal-Mart dives further into the e-
commerce world, changes to their
organizational structure will only continue
