Transforming a business through cost-reducing changes

United Airlines: Transforming a business through cost-reducing changes

Challenge:

Amidst history’s sixth largest bankruptcy, United Airlines needed to engage employees to implement sensitive operational changes and achieve aggressive cost savings, while still maintaining a high level of operational performance and customer service. United formed a Business Transformation Office as a solution.

The company’s operations workstream was the largest and most complex, overseeing the activity of 11 change programs encompassing three business divisions and the entire global network of airports. This team needed to engage employees to think and behave differently in order to transform how United worked, with a goal of reducing costs by $150 million.

Actions:

  • Aligned leaders behind a compelling story to engage the hearts and minds of employees and drive the necessary behavior change.
  • Created a “line of sight” between divisional goals, strategies and programs  and the company’s overarching transformation objectives.
  • Identified the behavioral risks in operational plans, developed mitigation strategies and targeted change leadership plans for all 11 project teams.
  • Created a communications network to provide airport GMs with ongoing visibility to the full scope of change efforts (vs. individual program report-outs).
  • Brought local union leaders and frontline supervisors together to define new ways of working  to maintain safety, improve customer service and achieve cost savings.
  • Created opportunities for dialogue, feedback and real-time problem solving to help work through process changes.
  • Provided general coaching and implementation support.

Results:

  • Achieved $229 million in cost savings – 48.8 percent higher than plan target.
  • Productivity increased 16 percent, while costs decreased more than 20 percent.
  • On-time departure performance (reliability) broke records and ranked first in industry.
  • Customer service improved, with competitive complaint rate decreasing by more than 50 percent.
  • Communications program given an “Award for Excellence in Operational Improvement” from Melcrum.

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