Jet Blue Airways: Start From Scratch With 7S Approach

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MM6015 BusinessLeadership
JET BLUE Airways: Starting from scratch 7S Approach

GROUP 7 Executive 46 29111311 Haidir Afesina 29111337 Chindia Ferdinansari 29112132 Rohimat Effendi
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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)
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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
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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
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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
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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
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3.
4.
Appendix
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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
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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
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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
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Shared Values
C o r p o r a t e C u l t u r e
Soft Elements #3
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Management Practices Objective

Bring back humanity back to travel
Core Values
Safety, Caring, Fun, Passion, Integrity

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JET BLUE Airways: Starting from scratch 7S Approach

Lessons Learned Change Management

Shared Values Skills

Maintain its success through long periods of sustained growth

The right competency is the right asset

1st priority to be improved

Shared Values Style

Skills Staff Style Structure Strategy Shared Values

Rivalry Competition HIGH Same route, target market, price

Threat of Substitutes MEDIUM Car Train i.e. AMTRAK

Top Management focus and commitment

High standard business operation models :

High Competitive Human Capital Management

Understand and meet customer expectations External parties

OBJECTIVE Bring humanity back to air travel

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

Long-Term Shareholder Value

Enhance Customer Value

Customer Value Proposition

Learning and Growth Perspective

Information Capital Organization Capital

Management Practices Objective

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