IJ: Turning a crisis into an avenue for transformation

[Naim 6]

The Edge Daily

 

18-02-2008: Turning a crisis into an avenue for transformation

by Ooi Ying Nee

 

When Datuk Seri Idris Jala accepted the challenge to save Malaysia Airlines (MAS), he took it as a calling to live up to his leadership principles although some people might have labelled him crazy for accepting the job.

 

But only by taking on a near impossible task of turning around the national airline in crisis, Jala said, would he be able to lead the organisation into a successful transformation.

 

“Transformation only happens when you experience a deep personal crisis; you have a spiritual awakening or when there is massive change in an organisation, like a turnaround in Malaysia Airlines,” Jala said in his lecture on “Transformational Leadership” last Friday.

 

Speaking at the Oxford & Cambridge Society Malaysia Dinner Dialogue Series, Jala said there are six principles that leaders should adhere to. The first is to make a personal stand to be “the saviour” of his or her company and be prepared for an organisational overhaul. One does not cajole an organisation into a transformation, he said, but by radically changing its modus operandi.

 

“There needs to be a calling. You need to set Olympic targets — not small ones like a jaguh kampung (village hero) — but really audacious targets. And those targets, most people will you tell you that you can’t do it, when they say it cannot be done. They must conclude by saying ‘if you fail it is okay’. You will not do the impossible until you conquer the fear of failure,” Jala said.

 

But even when there is doubt, Jala said a leader refrains from justifying his decisions and just “go out and do it”.

 

“Sometimes the things that you do that are so difficult, you must not look for precedents. Usually there are no precedents. If there is a precedent that means it is doable. Sometimes some of your actions that you take cannot be justified, so do not attempt to justify all your actions because many of the things you do, people will think you’re crazy,” he said.

 

The second principle, Jala said, is “to anchor everything on the profit and loss (P&L)”. He said although it is common sense, in reality many organisations exert very little effort into improving its P&L. MAS had unprofitable routes and the organisation did everything it can to fix them. It is then crucial, he said, to make the P&L a company-wide responsibility and not just the senior leadership’s. Routes were closed and jobs were lost, Idris said, if it could not be made profitable. But no matter how painful it was, he said, it was crucial to identifying MAS’ Achilles heel.

 

“At the company level if there is a P&L problem most people would say it is the CEO’s problem. But I had enforced, what we call, route profit and loss. Every route had its own P&L statement. What’s good about this is every country manager was responsible for the routes, so they start sweating,” he said.

 

Throughout a transformation, Jala said, leaders must inculcate and practise the discipline of action — the third and vital principle to an organisation’s success. “Don’t only track action, but track results. Report and communicate results,” he said. The company set up a bulletin board to share quarterly results with employees. Jala said his first procurement was 30 Blackberry mobile phones that were distributed to “people who I was going to chase every night and every day.”

 

“This is not a situation where you have democratic discussions about what needs to be done, it was directive. It was action. You don’t just speak about it, but you must do it. Now. Not tomorrow, not another day, but now,” he said.

 

A company in transformation, Jala said, calls for situational leadership, which is the fourth principle. The journey towards transformation accelerates in four phases, according to Jala. The first being orientation — when staff is motivated to change — followed by dissatisfaction — when employee morale takes a tip. Throughout the first two stages, Jala said, it is imperative that leaders are highly directive.

 

“A leader must be highly directive, but you need to be empathetic, you need to understand the problems. But still you need to be resolute about the direction,” he said.

 

But as the organisation begins to show improved signs of efficiency —during the resolution and production phases — it is important for that leader to embody an empowering style of leadership. The best leaders have an adaptive style, Jala said, and they must be able to change their repertoire accordingly.

 

“When you move to stage three (resolution) that’s when people know how to solve the problems, they are competent. As a leader you must stop being directive. You must learn to let go because if they already know how to do it chances are over time they actually know how to do it better than you do,” he said. “Phase four is very highly productive... then you groom all the leaders.”

 

Nevertheless aside from grooming the crème de la crème of the talent pool, it’s important for leaders to rally a winning coalition for change as well, Jala said.

 

“It’s important to engage them. I realise that if we don’t explain (to them) what we’re doing, then they won’t know our story,” he said.

 

But of all the principles and lessons he has amassed, Jala said there is one simple principle that he abides by, which is to pray for divine intervention for things outside the sphere of your control. He shared that had he known he had received a letter of offer to study law in New Zealand, which he always wanted to, he wouldn’t have had the opportunity to do what he’s done at MAS.

 

“Paolo Coelho (author of the Alchemist) wrote that ‘When you want something, all the universe conspires in helping you to achieve it,’” Jala said. “But you need to be humble enough to accept that despite everything that you do, there is no guarantee that you will succeed. The day pride sets into you that is when you’ll collapse. If it doesn’t work, it’s okay.”

 

http://www.theedgedaily.com/cms/content.js...52b600-daca666e

[Guest Michael]

Idris has done a wonderful job so far hey.

[Ryan Soh 3]

“At the company level if there is a P&L problem most people would say it is the CEO’s problem. But I had enforced, what we call, route profit and loss. Every route had its own P&L statement. What’s good about this is every country manager was responsible for the routes, so they start sweating,” he said.

 

Throughout a transformation, Jala said, leaders must inculcate and practise the discipline of action — the third and vital principle to an organisation’s success. “Don’t only track action, but track results. Report and communicate results,” he said. The company set up a bulletin board to share quarterly results with employees. Jala said his first procurement was 30 Blackberry mobile phones that were distributed to “people who I was going to chase every night and every day.”

The fact that this was only brought up in 2008, it seriously makes me wonder what the hell was going on since 1972?? IJ is implying (i think) that the old-MAS had managers that weren't answerable to the P&L for the respective stations that they were in charge of... And it is only now that the key appointment holders are being hounded day and night?

 

I have always thought that running a business as large as MAS that what was mentioned there is a given?

 

As tempted as I am to shake my head, but I want to look on the bright side and think it is better late than never at all.

[Guest Michael]

Definitely happy I am with this plan people.

[Guest Michael]

What do we all think of IJ and the plans for the future?

[Tamizi Hj Tamby 1]

Kudos to IJ for the successful BTP

[Izanee 0]

Not going to work ..not with their current 'enhanced' product.

[Keno Omar 0]

As much as I'd love to see MAS return to its former glory, I'm extremely skeptical that this BTP2 is ever going to work. Five star quality (a la SQ, CX, QR) and "value carrier" cannot be achieved simultaneously. I highly question MAS' rationale that they could have it both, rather than facing a difficult trade off between the two. To maintain and improve five star quality will not come cheap, and this wont be easy either with the ongoing cost cutting throughout the organization. Should MAS decide to go "value carrier" all way (by sacrificing its five star quality), it will be very difficult for MAS to compete with the likes of AK and AK-X on the basis of low fares due the high cost structure of MAS as a legacy carrier.

 

More opinions here: http://www.malaysianwings.com/forum/index....c=7795&st=0

 

Some words from an aviation business analyst from world's leading provider of credit ratings:

Business Times 2008/02/01

 

"The signs all indicate that they are downgrading MAS to capture more of the market, when given the track record and all the awards they have won, their niche would be the premium travellers, the first and business class." "I'm a bit confused as to the approach that they are taking," Standard & Poor's Equity Research aviation analyst Shukor Yusof told Business Times yesterday. He also wondered how MAS came up with its RM1.5 billion profit by 2012 target without finalising the type and number of planes it wants. Shukor said his concern is that in the near term, when recession starts to kick in and slow down travel, it has always been the economy travellers who show the most impact and not so much the business and first class travellers. "The plan lacks clarity on how it is going to be able to achieve such profits, at a time when getting 10 dollars margin for a seat is difficult, how do you get a billion in?" he said.

Edited March 6, 2008 by Keno Omar

[Kenneth T 0]

“Don’t only track action, but track results.....

 

Is he implying he is prepare to do whatever it takes to achieve the target profit? That's insane....

[BC Tam 2]

Why not ? Remember, it's common practice in corporate world for top executives to be rewarded handsomely for having achieved their stated target. Never mind what cost it may entail in process. By that, I mean VSS (loss of livelihood for breadwinners in some cases) Snake-boxs initiatives (loss of hard earned customers' goodwill) - etc, etc

 

Oh uh, MH bashing again - sorry !

[FK Wong 0]

“Don’t only track action, but track results.....

 

Is he implying he is prepare to do whatever it takes to achieve the target profit? That's insane....

 

hahaha, you only know that now? remember that he has nothing to lose but to gain more(reputation) as long as the figure maintain as +ve.

 

With the current way on how the airline is being run , like the rest has already said it will continue its profit but it will start losing then.

 

Well , i believe in the long run the image of the national carrier will be tarnished even before the time ends.

Edited March 6, 2008 by FK Wong

[Izanee 0]

MAS bashing is so much fun, isn't it!

 

[Ken M. 0]

So KUL-JNB-CPT-EZE vv makes profit for MH?

Surely one of the most bizarre routings in world aviation.

 

 

[S V Choong 4]

So KUL-JNB-CPT-EZE vv makes profit for MH?

Surely one of the most bizarre routings in world aviation.

 

Attributed to the Malaysian Boleh spirit!

 

[Guest Michael]

I reckon going with what Idris has said, the airline will be able to forge ahead and knock the competition off.

[Mushrif A 3]

I reckon going with what Idris has said, the airline will be able to forge ahead and knock the competition off.

 

Of course...and there will only be one full-service airline left standing...SUPER MH!

 

By the way, do you realise that the first letter of your name is the same as your favourite airline? Ooo look, you even have a "h"...so there's actually an "MH" in your DNA.

 

 

 

 

 

 

 

Sorry....couldn't resist, but I like how you always have a positive spin on anything MH (but please do add a bit more details on why this-and-that is positive as opposed to one-liner cheerleading sentences. Maybe you do see things about MH in a different light and could share a bit more of your thoughts.)

[BC Tam 2]

By the way, do you realise that the first letter of your name is the same as your favourite airline? Ooo look, you even have a "h"...so there's actually an "MH" in your DNA.

Oh gosh Mushrif,

You share the same genetic trait !

 

Not certain here, but maybe it's kinda cool to possess the sort of innocence with which Michael seem to idolize Datuk IJ and MAS. I don't know whether to envy you or not - assuming we're not mistaken about Michael's true colours. Care to share ?

Edited March 7, 2008 by BC Tam

[Mushrif A 3]

Oh gosh Mushrif,

You share the same genetic trait !

 

Not certain here, but maybe it's kinda cool to possess the sort of innocence with which Michael seem to idolize Datuk IJ and MAS. I don't know whether to envy you or not - assuming we're not mistaken about Michael's true colours. Care to share ?

 

I know...I purposely left that bit out, hoping somebody would notice. Yes, we were separated at birth...7 letters, MH as the first and fourth letter in our names...but, as you already know, that's where the similarity ends.

 

Micheal probably adores those snackboxes, has posters of IJ on his walls...yours truly, on the other hand...well, you know the rest of the story.

 

[Guest Michael]

I am glad Idris is in power yes I admit I find MAS is a superb airline just look at their own lounge.

[Izanee 0]

michael...as mushrif said, it would be nice to back your claims with some evidence. the lounge is a start...but there are better airline lounges out there. biggest is not always the best.

[Mushrif A 3]

I am glad Idris is in power yes I admit I find MAS is a superb airline just look at their own lounge.

 

 

Yes...you're getting there...mentioning the lounge is start, but please elaborate...what's with the lounge? Is it horrible? Beautiful? waiter service? lack of food? large spread of food?

[Guest Michael]

Large space, good food and wine, wedgwood crockery.

[BC Tam 2]

Micheal probably adores those snackboxes, has posters of IJ on his walls...yours truly, on the other hand...well, you know the rest of the story.

Mushrif,

I'm guessing you may have Datuk IJ's poster on your wall also, but slightly 'defaced' or serving it's purpose for dartboard practice ?!

Hopefully, it goes no where near as deep as that !

[Mushrif A 3]

Mushrif,

I'm guessing you may have Datuk IJ's poster on your wall also, but slightly 'defaced' or serving it's purpose for dartboard practice ?!

Hopefully, it goes no where near as deep as that !

 

No, my snackbox diatribe is never personal.

 

[Guest Michael]

Remember guys we should not be bashing the national carrier remember there is a chance MAS will succeed where competitors will fail.