Update: The post below [May 15th, 2008] was updated [December 16th, 2009] as British Airways faced a highly damaging strike of Cabin Crew over the Christmas holiday period. Original post follows:
When a company starts looking for a new leader, rumours about the incumbent are bound to arise. The most recent case is that of British Airways and its CEO Willie Walsh. Students of leadership succession should keep a close eye on unfolding events.
The duty of a corporate board is to safeguard a company’s future viability, and that must include monitoring of its leadership. While secrecy is desirable, it may suit pressure groups to bring matters to public attention. For example, shareholder activists seek advantage for their narrower interests, which would include getting the best short-term deals on investments, but might also include the possibility of becoming king-makers for a change of leadership.
[British Airways] has appointed the recruitment consultants Whitehead Mann to find a new chief operating officer and possible successor for its embattled chief executive Willie Walsh.
The successful candidate will fill a newly created role, devised after the recent Heathrow Terminal 5 fiasco. Both BA’s director of operations, Gareth Kirkwood, and head of customer service, David Noyes, parted company with the group last month [April 2008] . The two roles will now be combined to create the position of chief operating officer.
The airline, which will publish its full-year results on Monday, is believed to have instructed Whitehead Mann to find a senior level candidate who could be considered for a position on the board within two years, and could also be a potential replacement for Mr Walsh within five years.
For ‘parted company’ read sacked. Gareth makes an opening sacrifice in BA’s attempts to allay criticisms for a wave of customer service reactions. David will do for the time-being for operational failings, as Terminal 5 lumbers into action.
Later, [May 13th 2008] BAA, Heathrow’s operating organization announced the departure of Mike Bullock, its Managing Director at Heathrow, another victim of the Terminal 5 opening (or non-opening, if you prefer). At least the BBC announced it, beating the BAA web-site to the news.
The departures at British Airways seem more in the nature of opening gambits, if we want to puruse the theme of chess as a metaphor for corporate strategy.
The Times has reported that public sentiment strongly in favour of BA finding a replacement for Willie Walsh.
However, Richard Northedge argues that
Walsh ..is directly culpable too [for the recent Terminal 5 opening fiasco]. Unfortunately, BA cannot afford to lose him. It has other problems that require solutions – from its pension deficit to its industrial relations – and Walsh is the best man it has. But stakeholders require some recognition that Walsh’s acceptance of responsibility is not just hollow words: it would be appropriate if, when the remuneration committee considers bonuses, it acknowledged the need to punish Walsh.
The Walsh Legend
Mr Walsh arrived at British Airways in 2005 already as something of a celebrity. His reputation had been secured as a former pilot who aspired to leadership. He had risen through the ranks at Aer Lingus to be acknowledged as a transformational figures for the fortunes of that company.
Stories accumulated about his hands-on style, and were used to sketch his operating methods.
He was known for negotiating toughness. Successfully reinventing Aer Lingus as a profitable no-frills airline, while other established European flag carriers went to the wall, he slashed costs by 30% and shed more than a third of staff. [saying]”we make no apologies for focusing on profit” … [and that] “a reasonable man gets nowhere in negotiations”.
He is renowned for not driving an expensive car and choosing not to take on a secretary, instead writing all his own letters and answering his own phone.
Mr Walsh’s obvious toughness and eye for increased profitability no doubt caught the attention of BA’s board. After the UK airline’s long history of staff disputes, most recently the wildcat walkouts in August 2005 in support of sacked workers at the airline’s main caterer, he must have seemed ideal.
Be careful of what you want…
‘Be careful of what you want. You might get it’ runs an office-wall summary, capturing the myth of the Faustian pact. Maybe that is another version of getting the leaders we deserve. The appeal of a tough leader for BA was obviously appealing, not just to the Board, but to its major shareholders.
Students of leadership succession should keep an eye on events at British Airlines. We will continue to watch Willie, at Leaders We Deserve.
To go more deeply into succession planning
We touched on British Airways in the context of Mandrill Management .
Travolution is a useful site for wider issues of the industry
Times Warner’s appointment of Jeff Bewkes also makes an interesting succession story.
There have stories of the rise and fall of varous sporting leaders. When Liverpool owners approached Jurgen Klinsmann, the story blew-up as a scheme to get rid of the popular Rafa Benitez.
England’s Rugby Football Union eventually appointed Martin Johnson and relegated Bryan Ashton to the bench.
Numerous posts covered the stories the longest leadership succession saga of modern times.
The transition from President Vladimir Putin to Dmitry Medvedev is offering further insights into succession issues in internationally important arenas.
Overall, the events covered in these posts indicate recurring themes within recent leadership succession stories. A thorough examination might produce a valuable contribution to understanding of the dynamics of leadership succession. They may also hint at the likely outome to the story of Willie Walsh at British Airways.