Saturday, April 30, 2011

Air India next Continental?

The best thing in the MBA courses is a bunch of case studies, mainly from HBR ofcourse! It is said that 'Strategy' is the most used & most misunderstood word. I guess so.

We had a course named 'Operations Strategy' - aren't these two words exact opposites of each other in meaning? Operational excellence or efficiency is something that shows the results in the income statement i.e something that can be measured in numbers almost with an immediate effect - an assembly line is refined at an automobile manufacturing unit & it produces more vehicles - immediate numbers. Whereas any strategic initiative taken doesn't show immediate impact in numbers, and probably never would show as high impact in terms of numbers as that by operational efficiency, but it makes an amazingly powerful non-measurable impact - things like just addressing the staff in your restaurant by name; this is where I face the biggest paradox of my life - disliking the subject I am most interested in: Mathematics! And I dislike agreeing that Maths fails to measure the most important parameters, anything that cannot be measured in numbers. We could dig deep into these - operations vs strategy & maths not being useful enough, may be some other time.

One of the cases that we studied in this course was of the turnaround of Continental Airlines - a classic case [Click Here to download the case, thanks to Google I found the pdf] of how small things make a great impact and how consistency in certain practices take a drowning company to a path-breaking one.

Why I was thinking of strategy is because of a couple of Air India's announcements. Recently I went to Toronto & chose Air India for various valid reasons. What an awful experience I had! You could read in detail Here if you want to enjoy the details. I just want to tell them if they don't want to serve, better stop serving. I read the news of Air India wanting to turnaround, and achieve similar heights probably as that of Continental per the captain's statement. And then I read another news piece about the company cutting down the operating costs. Woo! Has the first step itself gone wrong, shouldn't the first steps in an attempt to turn around be focussed on strategic initiatives which probably would cause a hike in operating expenses initially & then with loads of seamless efforts, eventually profits would be made.
Can Air India do the turn around? Well, nothing is impossible so to say and I am very pessimistic about believing that this company can do a turnaround, but definitely extensively intense efforts are needed.

Let's wait & watch!

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