Background
The engineering and maintenance (E&M) division of a leading airline employs c.5,000 employees globally. Like most non-revenue generating divisions, they were under constant pressure to work leaner and smarter. The cost-reduction pressure intensified when the GFC hit, triggering global market contraction and declining revenues.
A $50B cost reduction was needed to secure competitive positioning in the marketplace.
At the same time, it was expected that core operations would be maintained and their internationally recognised gold-standard E&M standards would be preserved. A tall order.
What We Found
The change opportunity identified was to consolidate three of its maintenance facilities into an existing facility and optimise the maintenance schedule. Doing so would bring productivity gains through reductions in ‘white space’ downtime, along with lower rent, footprint and labor costs.
The decision to restructure, consolidate and relocate was met with controversy, significant cost, and major capability shortages. Some 1,200 employees were directly impacted by the change across three sites. Many employees were faced with a difficult decision, based on the 5 Rs: relocate, re-train, retire, redundancy, redeployment. Morale was low, speculation was high (thanks, in part, to inaccurate media reporting), and anxiety reigned.
This called for a large-scale, complex transition plan and support model.
What We Did
No.8 Consulting’s expertise was engaged to manage change design and planning steps, including:
- Analysis and modelling assumptions for the design of a downsized and centralised solution, ensuring cost saving targets met
- Analysis of the industrial risks associated with industrial disputation and legal compliance
- Analysis of the transition risks. The mitigations formed the basis of change tactics and transition planning
- Engaging senior leaders on the development and delivery of communications to impacted employees. Specifically, announcing the changes, process for transition and support available to leaders and employees. Scripting leaders on managing their teams’ resistance
- Training and coaching leaders on effective communication and influencing during times of upheaval
- Procurement and scope of outplacement and relocation services
- Strategy and Project Management of career transition support model, including establishing and operationalising an onsite career transition centre, and reverse engineering recruitment tech to facilitate large-scale redeployment with the software vendor
Outcomes
The transition plan enabled the company to implement a streamlined business model, support staff and grow shareholder value.