It is always debatable. Does effective leadership result in creating a culture of meritocracy? Or does meritocracy create effective leaders within the organisation? Air India’s troubles seem to be both—a lack of the right leadership and a lack of a culture of meritocracy. One wonders whether one should throw out the baby with the bath water!
Air India (AI) was nationalised in 1953, for various reasons. However, JRD Tata was allowed to stay at the helm till 1977. It was a period of specialists in every department. They became icons in the airline industry. People like Bobby Kooka in commercial, and KG Appuswamy in engineering. There was leadership with vision; setting high goals and a good example; delegating without abdicating; creating an all-pervading pride of belonging. Morale was high. And Air India was profitable!
Air India became the first Asian airline to operate in the Middle East, Europe and the UK in 1948. It was the first to convert into a jet fleet by 1963. At this time, even airlines like BOAC and Air France were still operating with converted bomber aircraft from World War 2. AI repeatedly won the airline of the year award from Flight magazine in the 1950s and the 1960s. And Air India was the first Asian airline to be requested by the governments of Singapore, Malaysia and UAE, for help in setting up their own national airlines. JRD Tata also became the first Asian to be elected president of IATA in 1966!
When we now look at the standing of Singapore Airlines and Emirates Airlines, compared to the present standing of Air India, we can only say “how the mighty have fallen.”
As Phil Kotler keeps repeating – “The more successful a company becomes, the faster it forgets the very lessons that made it successful.”
How else can you explain that in July 2009, the door of an AI plane was found broken, because the ground crew moved the stairway too early? An enquiry was instituted because a flight from Mumbai to Mangalore carried three extra passengers—one in the cockpit and two others in the jump seats meant for the crew. The newspapers reported that this was not the first time that an AI plane carried extra passengers on the domestic flights. Imagine what would have happened if there was an accident and the insurance company had washed its hands off all responsibility. All this in an airline which was asked to help set up three successful airlines as they are today!
A problem of leadership? Fourteen managing directors in 30 years. An average tenure of three years and two months for each MD. Three MDs serve for four and a half years each on an average. Remove them from the total and you have the average drop to a tenure of one year and seven months. Only five of the 14 MDs knew the airline business. The others are all a motley crowd of IPS and IAS officers and even one sales manager of a private hotel, who was installed as MD, having perhaps knocked on the right doors and opened the right windows. It is also significant that the industry professionals were always ONLY MDs. But those who did not know the business were always appointed chairman AND MD. And they presided over a board packed with joint secretaries from government who knew as much about the industry as the chairman did! Compare this with the average tenure of MDs of other airlines where the average was eight years. N Pillai of Singapore Airlines kept a firm hand on its joystick for over 15 years!
Margaret Thatcher had said, when she was dealing with British Airways and the British Railways, that ‘when professionalism is given the go by, it is the road to disaster’. The tree of cronyism grows and flourishes from the seeds of bureaucracy. Key officials are appointed to senior positions with no relevant experience. Meritocracy goes for a toss. In AI, there was even a non-graduate appointed senior manager as a direct recruit. Experience? He was a member of the presidential bodyguards. There has been a sports officer appointed as executive director of marketing. And a pilot trained for jumbo aircraft, who preferred to be on the ground and do PR (public relations) work with ministries in Delhi. The result? Demoralisation at all levels of the organisation. And each one looks up at how much bigger is the pie that others are eating,, and are tempted to take their share as well.
And where is the customer in all this? At the booking counters of some of the airlines that Air India helped in the good old days when AI had leadership and a culture of meritocracy.
Will this change, now that AI has gone back to the house of Tata, by a strange quirk of circumstances?
Perhaps – and everyone hopes so, for the good of the customer, of the company, the community and the country. Customer Value Starvation (the title of my latest book) will have to be reversed, and the long process of customer value creation must begin, and soon.
(Walter Vieira is a Fellow of the Institute of Management Consultants of India- FIMC. He was a successful corporate executive for 14 years and then pioneered marketing consulting in India in 1975. As a consultant, he has worked across four continents. He was the first Asian elected Chairman of ICMCI, the world apex body of 45 countries. He is the author of 16 books, a business columnist and has been visiting professor in Marketing in the US, Europe, and Asia for over 40 years. His latest books are ‘Marketing in a Digital/Data World’ with Brian Almeida and ‘Customer Value Starvation Can Kill’ with Gautam Mahajan. He now spends most of his time on NGO work and is presently Chairman, Consumer Education and Research Society, India)