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What Has Ansett's Demise Taught Us?

Probably nothing, we tend not to learn from the mistakes of others or for that matter from history. The collapse of Ansett has profoundly affected the lives of thousands of men and women reshaped the transport sector.

EMD worked for 2 years at Ansett and whilst we don't have all the answers for the inglorious demise of an Australian icon it taught us some valuable lessons.

b1.gif (814 bytes) Protect capital infrastructure. Allowing the conditions of assts to run down in the long term proved to be a poor strategy. Eventually fleet replacement became prohibitively expensive.
b1.gif (814 bytes) Assets purchases must be strategic. Indiscriminant purchase of core assets (planes) lead to over two dozen different models / types out of 118 planes, all with different spares, certifications, engineers even pilots. An expensive option when spares alone ran into tens of millions.
b1.gif (814 bytes) Consult experts but don't abrogate responsibility. The hiring of external consultants in 1998 to devise a strategy to save Ansett, a process which lasted 2 years and cost more than the economy of most Pacific nations seemed to create followers not leaders within the company's decision makers. The "spill and fill" restructuring went on too long distracting managers from their day-to-day tasks.
b1.gif (814 bytes) Failure to partner with staff. Work practices in Engineering, Flight Attendants just to name a few areas were riddled with demarcations and to the end remained uncompetitive yet the protection of these practices was valued above jobs.
b1.gif (814 bytes) Buy in to a productivity gap is essential. Benchmarking was introduced to drive home the productivity gap but was ineffective because management did the benchmarking not the people whose daily lives it affected.
b1.gif (814 bytes) Mature partnership with unions. Partnership with unions except with of course pilots, meant mostly capitulations by management leading to the best conditions and an unsustainable cost structure, which some unions recognized but chose to ignore.
b1.gif (814 bytes) KPIs are only as good as the use to which the data is put. Although performance measures (Key Performance Indicators) were introduced across the company their introduction was not complimented by appropriate data review and subsequent corrective action / continuous improvement process.
b1.gif (814 bytes) Performance and management appraisals were undertaken but like KPI data, the results were not used to better performance. The payment of bonuses to managers at a time when the company was loosing large sums of money made the message of gloom and doom hollow.
b1.gif (814 bytes) The separation packages paid to poor performers under the guise of redundancy annunciated values loud and clear.
b1.gif (814 bytes) Don't cut off you head to save a dollar. Voluntary redundancy scheme successfully exited the performers essential to Ansett's survival. Shedding a company's accumulated knowledge and intelligence by retrenching key personnel as a cost cutting exercise rarely leads to success.
b1.gif (814 bytes) Don't promise what you can't deliver – it costs, figuratively and literally. A media campaign of "ABSOLUTELY" created a higher cost structure because it wasn't matched with internal processes to deliver the promise.

Yes they did a lot of thing very well just not enough. So to all the people who lost their jobs inside and outside of Ansett our sympathies and best wishes.

What Next?

If you are interested in more information please give us a call on +61 412 026 909 and ask to speak to one of our consultants. 

Alternatively e-mail us at info@emdgroup.com.au or use the form on our Contact Us page.

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