Jet Blue Airways: Start from Scratch with 7S approach

7/22/2019 Jet Blue Airways: Start from Scratch with 7S approach

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JET BLUE Airways: Starting from scratch7S ApproachGROUP 7

Executive 46

29111311 Haidir Afesina

29111337 Chindia Ferdinansari29112132 Rohimat Effendi

MM6015

Business Leadership


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ChangeManagement

Overview

BusinessIssue

BusinessSolution

Recommendation

LessonsLearned

Outline


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+ Overview

A low cost, low fare, high quality service domestic airline with point to-point service on both short haul and long haul routes

Offers a differentiated flying experience that includes pre-assignedleather seats and free DirectTV for every passenger

Steering clear of heaviest traffic i.e. under served market, JFK as homebase

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 capitalVeterans from airline industry as top management (started from scratch)


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David Neeleman Dave Berger Ann Rhoades Al Spain

You need to go to

where people

want to fly

With our friendly

service and hassle

free

technology

An esprit de

corps that was fun

for crew andcustomer (focus

on people and

keep the company

union free)

To me, the most

important element

was caring

The world`s first

paperless airline

People Factor

Founder President & CEO HR Manager VP Flight Operaons


5/20

+Tools

McKinsey 7S

To improve the performance of a JetBlue:

Examine the likely effects of future changes withinJetBlue

Determine how best to implement a proposedstrategy

Business Issues

Soft Elements

Structure

SharedValues

Style

Strategy

Skills

System

Staff

Hard Elements

Next year will be expanding, opening new facilities(second hub-city)

HIGH employees turnover every year, will beineffective cost (as company promise of providing a

cost-effective)

Maintain its success through long periods ofsustained growth

Objective

Challenge

Output


6/20

+ Analysis #1

Elements Key points

Strategy Cost leadership

Structure Non hierarchal

System IT system

Skills Customer oriented

Staff Solid teamwork

Style Manager as Coach not boss

Shared Values 5 Core values: Safety, Caring, Fun, Passion, Integrity


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+ Analysis #2

7S Matrix

Shared

values

Strategy Structure System Skills Staff Style

Shared

values

2 2 2 1 1 1 2

Strategy 2 2 1 1 1 2

Structure 2 1 1 1 2

System 1 1 1 2

Skills 1 1 2

Staff 1 2

Style 2

Shared

values

1: 1st priority that need to be change

2: 2nd priority that need to be change

The right competency is the right asset


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+ Business Solution

2nd

priorityto be

improved

1stpriority

to be

improved

Skill

SharedValues

Structure

System

Style

Staff

Strategy


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+ Recommendation

Elements Initiatives

System Integrated system i.e. ERP

Reward system: opportunities for learning & growth

Performance Management System

Skills Develop business management competency

Training & development

Staff HR Planning

Retain good talent through recognition & development

Style Focus on internal and integration such as coaching,

mentoring, monitoring

Structure Empowering functional and division structure

Strategy Differentiation, integration unit, parts and service

Shared Values Enhance the commitment of 5 Core values: Safety, Caring,

Fun, Passion, Integrity


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+ Lessons Learned

1. Implementing core values of corporate culture oncompany`s policies, practices and systems

2. Build solid teamwork through innovative andentrepreneurial culture in result to competitiveenvironment

3. Nonhierarchical organization aligned with theirinnovative customer oriented service strategy

4. Managing talented executive people with theirdiversity to create shared values


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Appendix


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+ Industry Analysis

Porter 5 Forces

LOW

Profit margins are low

High labor

High operation cost

High fuel cost

Threat of new

Entrants

Threat of

Substitutes

Supplier

Power

Buyer

Power

Rivalry

Competition

MEDIUM

Car

Train i.e. AMTRAK

HIGH

Price sensitivityHIGH

Boeing and Airbus

the only suppliers of

aircraft forcommercial

HIGH

Same route, target

market, price

ATTRACTIVE

INDUSTRY


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Values

Safety Care Fun Passion Integrity

TopManagement

focus and

commitment

High standard

business

operation

models : Technology, Service

quality, Efficiency

High

Competitive

Human

Capital

Management

JET BLUEcompetitive advantages


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Integrated internal & external expectations

Internal Value External orientation

Working environment Safety Service , expectation

Love as human being Caring Personal service

Commitment Integrity Reliability

Experience Fun Joy experiences

Motives Passion Spirit

Understand and meet

customer expectations

Internal employees

External parties

Value orientation


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Arenas

Vehicles

Differentiator

Staging

Economic

Logic

Low fare commercial

Underserved but over priced US cies

Start from the scratch

single aircra model

i.e. purchase his own airline (A320 standardized)

Service and amenies compare to other low cost carrier

i.e. leather seats, direct tv

2 planes to 10 every 5 weeks9 departures 50 per day in 1 year

Cost advantages

steering clear of heaviest traffic

e.g. JFK home base, paperless cket

Hard Elements #1

Strategy

Cost leadershipTargeted the price sensitive leisure traveler and small business traveler

OBJECTIVEBring

humanity

back to air

travel


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Customer Value Proposition

QualityPrice

Organization Capital

A Strategy Map

SupplyDistribution

Operational ManagementProcesses

SelectionRetentionGrowth

Customer ManagementProcesses

Design/DevelopLaunch

InnovationProcesses

Safety and HealthEmployment

Regulatory and SocialProcesses

InternalPerspective

Human Capital

Information Capital

Culture

Learning andGrowth

Perspective

CustomerPerspective

FinancialPerspective

Functionality Service Brand

Product / Service Attributes Relationship Image

Improve Cost

Structure

Long-TermShareholder Value

Expand Revenue

Opportunities

Enhance

Customer Value

Productivity Strategy Growth Strategy

TeamworkLeadership


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Structure

System

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 makedecision-making process quicker

Hard Elements #2

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


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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

Staff

Creative & Customer oriented Greattwo-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

Soft Elements #1

Skills


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+ Soft Elements #2

Style of organizational work of JetBlue can be seen from Core Values:SAFETY CARING INTEGRITY FUN PASSION Believe to work as a team (solid) 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 transparentto all JetBlues stakeholders Manager would function as coaches rather than bosses Innovative and friendlywith fewer hierarchies and a smaller chain of

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Style


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ManagementPractices

Objective

Bring back

humanity backto travel

CoreValues

Safety,Caring, Fun,

Passion,Integrity

C

o

r

p

o

ra

t

e

C

u

lt

u

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e

20Soft Elements #3

Shared Values

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Jet Blue Airways: Start from Scratch with 7S approach

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