It’s not exactly the best time to be the CEO of an airline. It’s especially not a great time to be Willie Walsh.
As custodian of the British Airways brand, Walsh presided over what was arguably the worst week in the airline’s history at the end of March. To quote Walsh, himself, in a brilliant example of British understatement, “It has not been our finest hour.”
In case you were cut off from all media and the Internet, what Walsh was referring to was the debacle that was the grand opening of BA’s $8-billion Terminal 5 at London’s Heathrow Airport. What was intended to mark BA’s return to prominence as a world-class airline instead became a customer disaster that will, I predict, still be taught in business schools 20 years from now as a case study in how not to do it.
So what went wrong? Put it all down to baggage handling. First, there was a failure of the baggage system the day Terminal 5 opened. Many flights were canceled, and many customers who were flying on transatlantic and other long-haul flights were told they could fly—but only with carry-on baggage. Five days later, more than 50 BA flights a day were still being canceled, and an estimated 28,000 pieces of checked baggage had not been united with their owners who undoubtedly were all over the globe by then, most of them without a change of clothes in nearly a week.
As if a system failure was not enough, the situation was exacerbated by the fact that many of the baggage personnel who were to report to work at the flagship Terminal 5 were prevented from entering the new employee parking lot by an overzealous security system that created long lines of people who could not get to work.
As if that wasn’t enough, it seems that many of the new employees who were to work as baggage personnel at Terminal 5 had not been trained on the new system and had not been supplied with maps of the sprawling new terminal. As a result, many got lost trying to get the bags that did get through the system to the right aircraft.
Thousands of British Airways customers were stranded by flight cancellations. Those who were able to fly were separated from their luggage for days. BA hired hundreds of additional baggage handlers (one wonders where they parked) and temporarily “stored” thousands of pieces of luggage at Gatwick airport until they could be sorted and sent on to their owners. The concept of an airline “storing” luggage strikes me as just slightly incongruous.
‘All the marketing in the world will never make up for such disasters.’
The fallout from the week from hell for Walsh and his BA team was predictable. The airline became the laughing stock of the European press. Customers bolted for competing carriers, and the company’s stock price plummeted. A sad irony is that this unfortunate event occurred precisely at the same time as an “open skies” agreement took effect, allowing U.S. and European carriers to fly into airports in Europe and the United States with far fewer restrictions than in the past. Thus, competition was about to become far more keen for BA and other carriers—precisely at the time when they most needed brand equity and a positive brand image.
“Knock-on”
It was also interesting to watch the “knock-on” effect. It has been widely speculated that the fallout from “Terminal 5” will adversely affect the image of Heathrow as a gateway to Europe. It’s the world’s busiest airport, and its existing four terminals were a challenge to navigate even before last week. Other airlines that fly into Heathrow could be adversely affected, as passengers seek to avoid its possible delays in favor of Frankfurt or Paris.
Predictably, the controversy has found its way onto the floor of the House of Commons, where British Prime Minister Gordon Brown expressed concerns for the negative effect that the “Terminal 5” disaster might have on Brand UK plc.
How, you ask, could such a disaster happen? How could such a monumental event in the history of this airline—and, one might suggest, of aviation itself—go so horribly wrong, especially when it was close to 10 years in the planning and construction?
The message here is that all the marketing in the world will never make up for such disasters. It’s easy for me to be critical, seated as I am in seat 5F at 35,000 feet on my Air Canada flight as I write this, having flown through Heathrow this morning without a hitch (using Terminals 1 and 3, I might add) and anticipating the safe arrival of my checked suitcase.
Surely, you might comment, if one were opening an $8-billion facility through which millions of people are to pass annually, each of them on a tight schedule, one would have made sure that baggage system personnel had been trained and that technicians were available in the event of system failure. Might not one reasonably expect that the people we need to get bags to planes would be able to get into the parking lots and, therefore, able to report for work? Would we not have provided maps of the new work environment, so they could find their way to the planes?
Hindsight is wonderful, and I’m sure Walsh asked himself some tough questions in the wake of the catastrophe. No doubt, there are a few things that he and his colleagues would have done differently, had they but known what was about to blow up on them.
There are a few obvious lessons here, lessons that it’s easy for backseat drivers or armchair quarterbacks or even a marketing expert in the skies to point to—but good lessons, nonetheless:
- When planning something big, make sure all eventualities are covered.
- Train your employees and then train them again.
- Don’t leave anything to chance.
Technical systems failures can happen at any time, but they should be planned for, with backups and contingencies spelled out. The inability of baggage personnel to get their cars into the parking lot is a great example of a failure of something that is tangential to the provision of the core service but has the potential to prevent its delivery, with disastrous results.
As custodian of the British Airways brand, what should Walsh do now?
Jim
It would appear that the blame is shifting from BA as the airline at T5 to the BAA, the operator of T5. Whoever gets the blame, it is pretty clear that BA’s name and more importantly, London’s name as the definitive European passenger transport hub have been damaged. I wonder who is going to be taken to court for damages arising out of lost business?
But this pales into insignificance besides the potentially unsafe aircraft that Southwest, American and other US airlines have apparently been flying, in collusion with the FAA. Losing your luggage is one thing, but flying in an airplane that is potentially unsafe is something entirely different. “Quis custodiet custodiens”, as the early experimenters with government by the people for the people were wont to say.
We hard-done-by passengers can only hope that all those involved in both debacles go through a thorough Kaizen process to find out what is really at the heart of the intractable problems the industry has and to fix them at source.
Further reading:
The LSE’s Julian Le Grand on “of knights and knaves, pawns and queens”
http://www.lse.ac.uk/collections/pressAndInformationOffice/publications/books/2003/Motivation_Agency_AndPublicPolicy.htm
Graham Hill
Independent CRM Consultant
Interim CRM Manager
Most problems of this sort come down to inadequate planning, testing and communication.
I suspect that BA & BAA were guilty of trying to shortcut the testing process in a real-life context [perhaps I have heard of a large software company doing the same?] Few companies test with novice testers, usually the testers know what should happen and fail to realise that many users start from a zero knowledge base.
I have also heard that the concession retail staff were in situ in good time because they allowed extra time to travel from the new more distant staff car park and get through security but that mant BA staff left insufficient time – maybe training and motivation play a part?
Finally, from watching and listening to the many broadcasts from T5 it was evident that BA failed in terms of communication. This is a common failing across the transport industry. Had BA managment made it their priority to tell passengers what was happening and why, to provide regular up-dates and to simply be there to listen, much aggravation could have been avoided. Lack of accurate, regular and accessible information leads to rumour, frustration and anger.
Many years ago Edward de Bono suggested that airports should use overhead projectors with acetates on which staff could write simple information updates frequently and rapidly. I believe that the idea was rejected as too low-tech.
While the brand will probably bounce back, those responsible for this unecessary fiasco need to take a course in basic project management and customer service. I fear they may regard themselves as ‘above’ such matters!
Hi Graham and Peter
It does sound simple doesn’t it? Get the planning right, the testing right, and communicate efficiently and things will generally work out. But, it almost certainly is not that simple. This was an extremely complex venture, getting Terminal 5 planned and into operation. And, there was a lot at stake, not only in terms of the operations but, as it turned out, the reputation of an airline, an airport authority, and possibly a country.
When faced with such a daunting task, literally nothing can be left to chance. It demands that everything be tested and that every “little” thing be covered off, because, as we have seen, when something goes wrong that appears on the surface to be quite unconnected with the main task, the cascading effects can be devestating.
It is my view that BA will “wear” this for years.
Jim Barnes
Jim
Practically no really large projects of this type come in in full, on time, to budget. They are too complex and too complicated to plan to that degree with any realistic hope of success. Smal problems at the beginning quickly compound each other to become larger ones later. And the tighter you plan, the smaller your ‘wiggle room’ when something doesn’t go to plan. Which it will on the day. But I agree with you about testing individual components and their integration as far as is possible. Obviously, the only test of all the components together is during live implementation. Then you need excellent project/operational managers empowered to make on-the-spot decisions and equipped with walkie-talkies to coordinate workarounds for on-the-day problems.
I hear that BAA/BA tested the terminal with 2,000 tame staff, but that 40,000 new (to the terminal) passengers turned up on the first day. Perhaps with hindsight…!
I wonder what we should learn from the T5 debacle about turning round the majority of CRM/CEM projects that also don’t work on the first day, month or even year!
Graham Hill
Independent CRM Consultant
Interim CRM Manager
Graham, it may be rare for large/complex projects to come off without a hitch, but it’s not impossible.
Tesco launched its very successful Clubcard program by carefully training nearly 200,000 employees to be ready on the target date.
http://www.customerthink.com/interview/clive_humby_tesco_shines_at_loyalty
We’ve also seem mammoth projects like the Olympics come off on schedule every four years because, well, they have to.
Sure, big projects should be phased in where possible. But in the case of the T5/BA fiasco, I’m betting that the post-mortem will reveal plenty of things that could have, and should have, been done to open that new terminal smoothly.
Bob Thompson, CustomerThink Corp.
Blog: Unconventional Wisdom
Bob
I agree entirely. Nobody plans to fail. It just happens because, well, unexpected stuff happens!
One of my clients is a large construction management firm involved in managing multi-million dollar building and refurbishment projects. They go to considerable lengths to identify and mitigate all possible sources of potential failure. But when failure looms, they pull out all the stops to respond rapidly and to stop the failure dead in its tracks. This combination of deep planning based upon accumulated experience, actively searching for and mitigating potential sources of future failure, and aggresively managing failure away when it occurs works very well.
Many CRM projects, if not most, are neither adequately planned nor adequately managed. And a significant proportion of them fail to deliver the expected value as a result. But as we have seen from the construction management industry, it doesn’t need to be that way.
I see that BA has fired a couple of senior managers involved in the T5 debacle. Sad. Although the two managers have paid the price for their own failure, it was BA & BAA’s management as a whole that failed BA’s T5 customers (and is still failing to this day). Now what was the old saw about “a fish rotting from its head!”.
Graham Hill
Independent CRM Consultant
Interim CRM Manager
All such events, whether we term them fiascoes or debacles, offer lessons. Apart from the obvious (plan, plan plan; test, test, test; train, train, train), what are the real lessons here from a customer relationships perspective? I’d suggest that much revolves around response to the huge service failure. To tell people they can fly halfway round the world but they can’t check baggage was rightly deemed laughable. To suggest that they were “storing” bags at Gatwick until they could get round to sorting them was amusing. But the idea of sending bags by TRUCK to Milan to a special sorting facility was the icing on the cake for me.
Can we talk for a minute about how BA and BAA handled the crisis after the horse had bolted the barn?
Jim Barnes
Graham and Jim, this is an interesting discussion.
With anything complex, and even simple projects, the chance of failure can’t be completely eliminated no matter matter how much you plan, test and train.
Perhaps the answer is not just to plan to avoid failures, but plan for what to do when that (hopefully) rare disaster does happen.
For example, I have a sump pump in my basement. It requires power. When there’s a storm, there’s a chance the power will go out, which renders the pump useless. With hindsight, I should have bought that portable pump *before* the last storm, the ended up putting a foot of water in our basement, and costing me several thousand dollars of cleanup work.
I wonder if the folks at BA gave some thought to what would they do if they ran into unforeseen problems. Or, did they cross their fingers and hope for the best.
Bob Thompson, CustomerThink Corp.
Blog: Unconventional Wisdom
Bob
I can’t believe they crossed their fingers and hoped. Having said that, it APPEARS there was too little anticipation of things going wrong. But, let’s remind ourselves that this is our perception, seated as we are several thousands of kilometres away from BA and BAA headquarters in the UK and Spain (yes, BAA is a Spanish company) respectively. It may be that they had planned and tested and trained at a level that we all would have found perfectly acceptable prior to the opening of Terminal 5, but that the things that went wrong and the extent to which they went wrong just could not have been anticipated.
I’d like to tie this back to my initial objective in penning this article, namely to point out that so-called branded customer experiences are not limited to the planned, scripted events that we tend to associate with the term. This was a branded experience as well, in that BA and BAA, and maybe Heathrow and Great Britain, will see that it will affect their brand relationships for some time to come. What must be the focus now is how those brand relationships can be repaired.
Jim Barnes