+

MM6015 BusinessLeadership

JET BLUE Airways: Starting from scratch 7S Approach

GROUP 7 Executive 46 29111311 Haidir Afesina 29111337 Chindia Ferdinansari 29112132 Rohimat Effendi

+
Overview

Outline

Lessons Learned Change Management

Business Issue

Recommenda tion

Business Solution

Overview

A low cost, low fare, high quality service domestic airline with point topoint service on both short haul and long haul routes Offers a differentiated flying experience that includes pre-assigned leather seats and free DirectTV for every passenger Steering clear of heaviest traffic i.e. under served market, JFK as home base Targeted the price sensitive leisure traveler and small business traveler Founded by David Neeman in February 1999, under the name "NewAir. Then started on February 11th , 2000 USD130 million for initial capital Veterans from airline industry as top management (started from scratch)

+
Founder President&CEO

People Factor
HRManager VPFlightOperaAons

DavidNeeleman
You need to go to
where people want to fly With our friendly service and hassle free technology

DaveBerger

An esprit de corps that was fun for crew and customer (focus on people and keep the company union free)

AnnRhoades
To me, the most important element was caring

AlSpain
The world`s first paperless airline

Tools McKinsey 7S
Hard Elements
Structur e

Business Issues
Objective
To improve the performance of a JetBlue:

Examine the likely effects of future changes within JetBlue Determine how best to implement a proposed strategy

Strategy

System

Shared Values Skills

Challenge
Style

Next year will be expanding, opening new facilities (second hub-city) HIGH employees turnover every year, will be ineffective cost (as company promise of providing a cost-effective)

Staff

Soft Elements

Output

Maintain its success through long periods of sustained growth

+
Elements Strategy Structure System Skills Staff Style Shared Values

Analysis #1
Key points Cost leadership Non hierarchal IT system Customer oriented Solid teamwork Manager as Coach not boss 5 Core values: Safety, Caring, Fun, Passion, Integrity

7S Matrix
1: 1st priority that need to be change 2: 2nd priority that need to be change
Shared values Shared values 2 Strategy Strategy Structure System Skills Staff Style

Analysis #2

2 2 Structure

2 2 2 System

1 1 1 1 Skills

1 1 1 1 1 Staff

1 1 1 1 1 1 Style

2 2 2 2 2 2 2 Shared values

The right competency is the right asset

Business Solution
Skill

1st priority to be improved

System

Staff

Shared Values Style

2nd

priority to be improved

Structure

Strateg y

+
Elements System

Recommendation
Initiatives Integrated system i.e. ERP Reward system: opportunities for learning & growth Performance Management System Develop business management competency Training & development HR Planning Retain good talent through recognition & development Focus on internal and integration such as coaching, mentoring, monitoring Empowering functional and division structure Differentiation, integration unit, parts and service Enhance the commitment of 5 Core values: Safety, Caring, Fun, Passion, Integrity

Skills Staff Style Structure Strategy Shared Values

+
1.

Lessons Learned

Implementing core values of corporate culture on company`s policies, practices and systems Build solid teamwork through innovative and entrepreneurial culture in result to competitive environment Nonhierarchical organization aligned with their innovative customer oriented service strategy Managing talented executive people with their diversity to create shared values

2.

3.

4.

Appendix

+
Porter 5 Forces

Industry Analysis
Threat of new Entrants

LOW Profit margins are low High labor High operation cost High fuel cost Buyer Power HIGH Price sensitivity

Supplier Power HIGH Boeing and Airbus the only suppliers of aircraft for commercial

Rivalry Competition HIGH Same route, target market, price

Threat of Substitutes MEDIUM Car Train i.e. AMTRAK

ATTRACTIVE INDUSTRY

+
JET BLUE competitive advantages

Top Management focus and commitment

High standard business operation models :

Technology, Service quality, Efficiency

High Competitive Human Capital Management

Safety

Care

Fun

Values

Passion

Integrity

+
Integrated internal & external expectations
Internal Working environment Love as human being Commitment Experience Motives Value Safety Caring Integrity Fun Passion

Value orientation

External orientation Service , expectation Personal service Reliability Joy experiences Spirit Internal employees

Understand and meet customer expectations External parties

+ Strategy
Arenas

Hard Elements #1
Lowfarecommercial UnderservedbutoverpricedUSciAes Startfromthescratch singleaircraHmodel i.e.purchasehisownairline(A320standardized) ServiceandameniAescomparetootherlowcostcarrier i.e.leatherseats,directtv

OBJECTIVE Bring humanity back to air travel

Vehicles

Differentiator

Staging

2planesto10every5weeks 9departures50perdayin1year Costadvantages steeringclearofheaviesttrac e.g.JFKhomebase,paperlessAcket

Economic Logic

Cost leadership Targeted the price sensitive leisure traveler and small business traveler

A Strategy Map
Productivity Strategy

Financial Perspective
Improve Cost Structure

Long-Term Shareholder Value

Expand Revenue Opportunities

Growth Strategy

Enhance Customer Value

Customer Perspective

Customer Value Proposition

Price Quality Product / Service Attributes Functionality Service Relationship Brand Image

Operational Management Customer Management Processes Processes Internal Selection Perspective Supply Retention Distribution Growth

Regulatory and Social Innovation Processes Processes Design/Develop Safety and Health Employment Launch

Human Capital

Learning and Growth Perspective

Culture

Information Capital Organization Capital

Leadership Teamwork

+ System

Hard Elements #2

Pay for performance system Motivate all staff to improve their performance Customized Employment Packages People dont complain when they have a choice Listen to employees concern The organization need to use innovation and new technology to make decision-making process quicker

Structure
Non hierarchical organizational Manager & supervisor function as coaches rather than bosses The organization need to reconsider its structure as they are expanding, ensure its align with its next future challenge

+ Skills

Soft Elements #1

Creative & Customer oriented Great two-way communications Committed to self improvement Necessary training and development programs need to be organized in a systematic manner and thus it has to be ensured that all members of the workforce are equipped with skills necessary to achieve a high level of customer satisfaction

Staff
Health (No alcohol and drugs) Solid teamwork Hire the right people Criteria based on 5 core values Cultural fit Only capable and promising candidates need to be employed Employees have to be provided growth potential

+ Style
Believe to work as a team (solid)

Soft Elements #2

Style of organizational work of JetBlue can be seen from Core Values: SAFETY CARING INTEGRITY FUN PASSION

Care to all employees encourage employee to balance between work and family The most important element was caring I want JetBlue care about people from end to end Keep transparent to all JetBlues stakeholders Manager would function as coaches rather than bosses Innovative and friendly with fewer hierarchies and a smaller chain of command
The image cannot be displayed. Your computer may not have enough memory to open the image, or the image may have been corrupted. Restart your computer, and then open the le again. If the red x still appears, you may have to delete the image and then insert it again.

+
Shared Values
C o r p o r a t e C u l t u r e

Soft Elements #3

20

Management Practices Objective

Bring back humanity back to travel

Core Values
Safety, Caring, Fun, Passion, Integrity