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MAS: Idris Jala 6 Secrets of Business Transformation


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Dato' Seri Idris Jala, MD of Malaysia Airlines shares the 6 Secrets of Business Turn-Around & Transformation

Published in: Business, Travel
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MAS: Idris Jala 6 Secrets of Business Transformation

  1. 1. Transformational Leadership 6 Secrets of Business Transformation Dato’ Sri Idris Jala MD/CEO Malaysia Airlines April 2009
  2. 2. The 6 Secrets of Business Transformation Divine Game of the Intervention Impossible 6 1 Winning 2 P&L 5 Coalitions Anchorage 4 3 Situational Discipline Leadership Of Action
  3. 3. Secret No. 1: The Game of The Impossible
  4. 4. (1) The Game of The Impossible Steps to making the ‘impossible’ happen: Set “Olympic” targets (very few precedence, difficult to justify) Conquer the fear of failure – conversations! Create a game so large it will consume you People innovate when their backs are against the wall
  5. 5. Many thought it was impossible to save MAS…. News Strait Times (1st Dec 2005)
  6. 6. 01 02 Cash Crisis Profit Crisis Critical Level 1b RM600m 2005 2006 (9 months) Full Year End ‘05 Apr ‘06 -1.3b -1.7b
  7. 7. We will solve our own problem (PM: “No bail out”) BTP 1 Target 2006: -RM 620m 2007: +RM 50m 2008: +RM 500m 2005: -RM1.3b loss
  8. 8. Record profits, record turnaround! Highest profits in 60-year history 851 RM million 461 319 337 326 288 261 222 233 151 154 144 112 111 (1,252) 7 (260) (700) (259) (417) (836) (134) 02/03 03/04 04/05 ’86/’87 ’87/’88 Dec07 94/95 96/97 95/96 89/90 92/93 93/94 88/89 90/91 91/92 Dec06 97/98 99/00 00/01 98/99 01/02 Dec05
  9. 9. MAS remained profitable for FY08 despite tough operating environment RM 364m 240m 242m 133m 122m 113m 120m 40m 38m 46m 1QFY06 2QFY06 3QFY06 4QFY06 1QFY07 2QFY07 3QFY07 4QFY07 1QFY08 2QFY08 3QFY08 4QFY08 -177m -321m (FY08) RM 244 m -177m 10th Consecutive Quarter of Profits -321m
  10. 10. 8.9b De lta Air 5.3b Li n 5.3b Uni es ted Airl 4.8b ines Nor thw est 2.1b Am Airl ines eric an A 1.8b Kor ir lin ean es Air 1.2b Air Fra nce Air -KL 894m Can M ada Tha i Ai rwa ys** 591m 585m Con tine ntal All Airl 435m Nip ines pon 400m Airw Chi ays na A irlin 338m EVA es** Air* Kin * 283m gfis her Air 213m Brit line ish s (Net income in US$) Jet Airw Airw ays ays 138m 135m Air Asi a State of the Airline Industry - in 2008 115m Rya nair Spi ceJ et 111m 95m Jap an A irlin 87m 91m Asi es ana Airl Cat ines hay 85m 76m Pac Sou JetB ific* thwe lue st A Airw irlin ays Sing es NOT EXHAUSTIVE 179m apo re A ir lin * Jan-Jun08 Source: Bloomberg ** Jan-Sep08 es 1.1b
  11. 11. Secret No. 2: Anchoring on the P&L
  12. 12. (2) P & L Anchorage Decompose the company P&L into individual route P&Ls Make each country manager accountable to the personalised route P&L We want innovative solutions which deliver financial results The whole organisation should focus on the P&L Rigorously challenge strategies & activities Reward people who improve the P&L THE P&L IS NOT A PLACE TO HIDE
  13. 13. Secret No. 3: The Discipline of Action
  14. 14. (3) The Discipline of Action Agree what constitutes success and measure Plan and track results (alongside action plan) Report and communicate results Roll your sleeves and get into the details Innovation needs solid implementation to achieve results THIS IS REALLY HARD WORK BUT EXCITING!
  15. 15. We use the lab as a tool to force Discipline of Action * Weekly frequencies
  16. 16. Secret No. 4: Situational Leadership
  17. 17. Situational Leadership Change leadership style based on team development Orientation Dissatisfaction Resolution Production Productivity (Competence) Morale (Commitment) STAGE 1 STAGE 2 STAGE 3 STAGE 4 Directive Style Empowering Style Leaders must nurture and develop innovation
  18. 18. Secret No. 5: Winning Coalition
  19. 19. (5) Winning Coalition No man is an island GLC – Conflicting shareholders’ requirement i.e. government versus investors; business versus politics Investor Relations Staff Engagement Collaboration with competitors Innovation surface when people work together IT’S ALL ABOUT MANAGING POLARITY
  20. 20. Secret No. 6: Divine Intervention
  21. 21. 2 Experiential Human Paradigms (1) Human beings have 1 limited control / influence over what happens 40% 60% controllable uncontrollable (1) Life is a continuous 2 reduction of options time
  22. 22. How do you get divine intervention ? 1 On values and actions – Be a Good Human Being 2 Ethics – Operate from the “White” not from the “Black” / “Grey” 3 Self Renewal – Solitude & Reflection (Theory of Enough)
  23. 23. Thank You