Case 9 Managing a Turnaround
Setting: Regional Airline; Your Position: CEO
You have just been appointed CEO of a regional airline. Your predecessor was asked to resign due to poor financial performance and a failure to develop policies necessary to maintain the profitability of the airline.
The board considered firing the entire executive group but decided to leave that decision up to you. You feel that such an action would be inadvisable in the near future since it might precipitate a "chain reaction" and cause massive departures from the organization. Furthermore, you do not have a background in the airline industry, and you will need their considerable knowledge in figuring out how to return the organization to profitability. In turnaround situations with which you have successfully dealt in the past, you have brought in your own team but not until you had gotten a feel for the organization and industry.
Your first step was to have a lengthy one-on-one session with each of your four direct reports. You were somewhat surprised at their apparent indifference to the challenge of making the airline successful. It seemed that each believed that they had a limited future with this airline and were simply trying to position themselves to get an equal or better position elsewhere within the industry.
On the one occasion in which you called a group meeting, there was an absence of open exchange, which you found upsetting. Perhaps your past reputation for bringing in your own people has caught up with you. Nonetheless, you recognize that their knowledge and experience will be critical to the development of a plan which you have promised to the board within a month.