The Search for a New leader: Now its BA and Willie Walsh

May 15, 2008

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.

The Independent reports that

[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.

Opening Sacrifices?

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

The Post Office/Royal Mail leadership succession activities were noted including attempts to have a fall-back plan if Allen Leighton were to leave.

Times Warner’s appointment of Jeff Bewkes also makes an interesting succession story.

EADS strategic issues under Louis Gallois
and also its leadership challenges have been covered.

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.


Interesting Times Ahead for Times Warner

December 10, 2007

jeff-bewkes.jpgThe arrival of Jeffery Bewkes as CEO signals interesting times ahead for the under-performing Times Warner giant

Time Warner Inc. (NYSE:TWX) has announced that its Board of Directors has elected Jeffrey L. Bewkes as Chief Executive Officer of Time Warner Inc., effective January 1, 2008.

Mr. Bewkes currently serves as President and Chief Operating Officer, and he will retain the title of President. Mr. Bewkes will succeed Richard D. Parsons as CEO, and Mr. Parsons will remain as Chairman of the Board

The announcement by the head of the appointments committee could serve as a model for communicating a well-executed leadership transition. It indicated

“Today’s decision is the culmination of a thoughtful and disciplined process that began in early 2006, when Dick Parsons initially approached the Board to discuss the timetable for the CEO succession ..”

“Jeff is the right person to be the next CEO of Time Warner, and I couldn’t be more delighted that he will lead this Company into the future,” Mr. Parsons said.

Behind the briefing

So what’s behind the briefing? The story is candidly told by CCN Money’s Jon Friedman, who states that Jeff Bewkes

needs to show the world that Time Warner isn’t merely some bloated, tired symbol of the out-of-breath media industry. He must demonstrate to Wall Street that he is on shareholders’ side.

Friedman further asserts that Parsons took control of Time Warner following a period of chaos.

The AOL-Time Warner combo proved to be an utter disaster; the two factions hated each other and there was no spirit of cooperation. The stock flirted with single digits. By the time Parsons took over, Time Warner had become a corporate punch line, if not a punching bag for the media. A born politician, Parsons stepped in and smoothed the troubled waters by adding the informal title of “chief facilitator.” He sold off some noncore assets, tried to prop up morale at AOL and basked in whatever triumphs the company had, such as the booming properties in its vast film division, including such blockbusters as the Lord of the Rings, Matrix and Harry Potter series.

The New Man

According to Reuters

Jeffrey Bewkes’s ascension to the top executive post at Time Warner Inc, unlike his predecessor’s, surprised no one. His rare combination of financial savvy and knack for managing creative talent made him an obvious choice to succeed Richard Parsons, who was viewed in 2002 as a dark-horse candidate to run a company that controls some of the top brands in media: CNN, People magazine and paid cable network HBO

Bewkes had risen spectacularly within HBO, and has been associated with a string of media triumphs including The Sopranos. This is a view shared by other commentators, who acknowledge the leadership successes of the former No 2

The Shift

The shift, hardly indicated by that smooth press announcement, signals intent to change bigtime.
The master conciliator is succeeded by someone quite different. According to The Wall Street Journal

Mr. Bewkes’s management style is expected to signal a radical shift in Time Warner’s corporate culture. Where Mr. Parsons won over employees with a grandfatherly manner, Mr. Bewkes’s style is more no-nonsense. Mr. Bewkes, who started his Time Warner career at HBO more than 20 years ago, is widely expected to be tougher on the company’s performance, or lack thereof.

From Smooth to Hairy

If Mr. Parsons had a smooth leadership style, it seems that Mr. Bewkes has a more hairy one. Interesting Times ahead for Times Warner …