Home' Trinidad and Tobago Guardian : June 13th 2013 Contents BG12 | FEEDBACK
BUSINESS GUARDIAN www.guardian.co.tt JUNE 2013 • WEEK TWO
Bowing to public pressures the
Government of T&T has
appointed an interim board to
CAL, headed by Phillip Marshall.
Marshall, who is currently the director of
the strategic management office at the Ministry
of Finance, has been given a mandate by
Finance Minister Larry Howai: "...do a detailed
diagnostic review of the organisation and a
review of the strategic plan and provide detailed
recommendations on the way forward."
Marshall has said: "My mandate as chairman
of Caribbean Airlines Ltd is clear and, therefore,
I am determined to deliver and ensure that my
small contribution is worthwhile and can benefit
all stakeholders, especially, the people of T&T."
My hope is that Phillip Marshall and his
team does not look at the solution to CAL s
problems as purely a "by-the-numbers" finan-
What s needed is a balanced approach to
managing the airline. But this approach assumes
that CAL has the proper leadership mindset;
at both the board and management levels.
More than anything else, this is a most con-
cerning issue. Could this be because many
senior leaders at CAL are carryovers from
BWIA, who are resistant to changing their
mindsets, or to a new business model, or to
Vasant Bharath, Minister of Trade, Industry
and Investment, recently issued a challenge to
state agencies to make what he called "trans-
formative change". In other words, we can no
longer allow politics to trump business trans-
formation. Bharath has suggested he would
like to see "not incremental, but transforma-
tional [change], and it must start with the min-
istry and filter down to the boards and senior
This is no time for "more of the same" lead-
ership style and approaches that do not forebode
well for the airline s viability. As current owner
of the airline, the Government of T&T must
act now to break this cycle, otherwise it will
only have itself to blame, not only for CAL s
decline and ultimate demise, but for the dashed
hopes of an integrated Caribbean carrier.
It's all about leadership
Except for its founding board, prior CAL
leadership has demonstrated neither the capac-
ity nor vision to lead transformation of the
airline to a viable business entity, let alone a
21st century global competitor.
What we ve seen time and again, is an
uncanny failure to focus on the things that will
transform the airline---like competent leadership;
excellent customer service; dedicated, motivated
employees; building better relationships with
acquired Air Jamaica and Jamaica in general;
and yes, doing something about its basement
level reputation with the travelling public.
Sad to say, it will take more than another
infusion of cash---which, I am certain, this
interim board will recommend---to "fix" the
airline. Looking at this primarily as a financial
fix masks the real problems: leadership, "fol-
lowership", motivation, and commitment to a
vision, to name a few. I implore the Government
to look below the financial surface, and not
let this be another finger-in-the-dyke solution.
CAL s problems go far deeper than millions of
dollars can correct.
We ve all heard the statement, "A fish rots
from the head down". Exactly what does that
mean? Sir James Porter (1768) credits the Turks
with the statement, which, when translated
means, "If the servant is disorderly, it is because
the master is so."
In other words, leadership is the root cause
of an institution s failure. But let s step back
for a moment. We all know that every gov-
ernment is within its rights to appoint boards
of their choosing, which more often than not
means politics will come ahead of sensible
business rationale; politics will trump business.
The Prime Minister and the former finance
minister and corporate sole must shoulder the
blame for releasing the board appointed by the
PNM prematurely. That board left CAL with
a tabla rasa---a clean slate---and money in the
bank. Each successive board has been nothing
short of bungling, clueless, and self-serving
with utter disregard for the concept of fiduciary
or moral responsibility. And the responsibility
for the mess that CAL is now in rests in the
Office of the Prime Minister and her political
party. It s time to clean up the mess, Madame
I have grave concerns for the success of any
strategic plan, if something is not done about
CAL s leadership. The old mindset must go.
But how do we accomplish that changing of
That cannot be accomplished with a slash
and burn approach.
CAL needs stability. It has that stability in
Robert Corbie who rose through the ranks to
become acting chief executive officer, and has
been in this position and in limbo for over two
years. But Corbie has been a toothless tiger.
It is my belief that the previous board preyed
on his inability to make firm decisions, since
he, after all, is also a carryover from the previous
It would be inadvisable and strategically very
foolish to replace Corbie at this point. Corbie
can bring that stability. If he has to be replaced,
then start the process for a phased replacement,
with Corbie an integral part of the process of
finding a new CEO who will not be a "slash
and burn" CEO to impress political leadership.
But Corbie will need immediate, strong interim
board support in two key leadership areas:
1. Corbie needs to be supported in weeding
out and replacing those in leadership at CAL
who are not on board with the type of trans-
formation that Vasant Bharath, Minister of
Trade, Industry and Investment, called "trans-
2. Corbie needs to be supported in the prepa-
ration of a robust, future-oriented, successful,
and fiercely competitive business strategy with
three areas of focus: CAL s employees, CAL s
customers, and CAL s shareholders -- in that
These are critical strategic actions that cannot
wait until a new CEO is on board.
Valuing of employees and customers
What always gets lost in leadership missteps
are employees and customers -- the airline s
most critical constituents. A former airline
CEO has said, "You can have the best aircraft
in the world, the best route rights, the newest
technology, and the most advanced systems
and processes, but without the people, you
cannot have an airline."
I sincerely hope that CAL s board does not
recommend the insane practice of cutting
employees as a means of righting itself. The
fish rots from the head; the first focus of trans-
formation at CAL has to be LEADERSHIP, not
Employees need robust, forward-thinking
leadership to motivate them to the future; it
has to start with board leadership which, in
turn, provides leadership to CAL s manage-
Next is customers. CAL still does not get it.
No customers, no revenue; no revenue, no
salaries and benefits. It seems as if people at
CAL have forgotten that it s the passengers
who pay their salaries; or maybe they never
got the e-mail! Wake up CAL; your reservations
employees, customer service employees,tick-
eting agents, flight attendants and baggage
handlers, are all critical customer touch points
for the airline.
The Internet and social media are full of
examples of incompetence along all these critical
touch points. Poor service here directly affects
your revenue stream. And, by the way, CAL,
there is a direct correlation between how you
treat your employees and how your employees
treat your customers. The model is: employee
value leads to customer value which generates
What about Jamaica?
Lost in this melee has been Jamaica. Let s
face it. Air Jamaica has, from its integration,
been a stepchild, and a badly treated one at
In previous articles, I talked about the inte-
gration process being flawed. Historically, in
mergers and acquisitions, the primary focus is
on financials and downsizing/right-sizing.
However, after the ink dries on the legal agree-
ment, there is still the integration of cultures
that gets short-changed. CAL had an excellent
chance during the due diligence process to focus
on culture integration issues, but blew it.
What s even worse, CAL neglected a larger
contextual cultural issue: Jamaicans dislike of
anything Trinidadian. CAL fuelled the fires of
Jamaican discontent when it announced that
it was cutting Air Jamaica s routes; it uncer-
emoniously dismissed Jamaican pilots, and
decided to close Air Jamaica s customer service
centres in Jamaica (Minister Bharath later relent-
ed).In the recent past there have been glaring
indecisions on the part of the Government of
T&T relative to cutting routes and closing service
centres. Why after announcing the decision to
do so was the former vice-chairman heading
to Jamaica to "discuss route cuts with Jamaica?"
This suggests knee-jerk reactions and a clear
absence of a strategy to deal with Air Jamaica.
Air Jamaica continues to be a "problem child"
for Caribbean Airlines. But it does not have to
be.What s troubling about the Air Jamaica deba-
cle is that CAL s leadership knew what it was
getting into, but it seems as though there was
deliberate abandonment of the acquired Air
Jamaica on the part of CAL management --
tantamount to dereliction of duty. When Air
Jamaica was acquired, the government of
Jamaica absorbed Air Jamaica s debt, leaving
CAL with its plum and profitable routes. These
routes were revenue generators for Air Jamaica.
The equation is a simple one: profits = revenue
-- costs. So, if the routes were profitable, and
CAL decided after a while to shut them down,
it only stands to reason that CAL was mis-
managing its operational costs. Let s face it,
"unprofitability" is a direct function of lack of
passenger traffic; this was not the case when
CAL acquired those Air Jamaica routes.
Leaders cannot expect employees to follow
them into the future if trust and confidence
are absent. CAL does not get it. Only when
there is a direct focus on culture integration,
and demonstration to Air Jamaica s employees
and the general Jamaican populace that CAL
genuinely cares for and about "their airline,"
will things begin to change. But that takes time.
CAL should have started that culture integration
process a long time ago. It s not too late, but
it has to begin NOW.
Jamaica owns 16 per cent of CAL, and still
owns the Air Jamaica brand. How much Jamaica
will take before it yanks its Air Jamaica brand
is a good question. If that happens, we can kiss
any ideas of an integrated Caribbean carrier
goodbye. Does anyone at CAL realise how much
there is at stake here?
Can CAL be turned around?
It sure can. But it certainly takes more than
the appointment of a new board and an infusion
of millions of new dollars. It takes resolution
to alter the cultural direction of the airline.
1. The interim board must redefine terms
of reference for CAL s incoming board of direc-
tors, whose members must operate with more
transparency and accountability for the future
of the airline.
2. The new board of directors must create
an environment for forward thinking leadership
at CAL, and that begins with a reinvigorated
CAL management that will:
Create a compelling vision of the future,
with strategies for including both employees
and the unions in Jamaica as partners, not as
Gain employees trust, and get them thinking
like the 21st century competitors they can be,
prepared to successfully defend its turf against
encroaching competition. Competition from
some big fish is already here, and CAL s is not
Involve employees in the decision-making
process, and hold both leaders and employees
accountable for delivering results.
3. Convince the marketplace that the airline
truly cares, and is prepared to demonstrate
that it has transformed itself into a customer-
focused airline. "If you continue to do what
you ve always been doing, then you ll continue
to get what you ve always been getting," is the
old saying. Transformational change, not incre-
mental change, is needed at CAL.
Success is not expecting the Government
to come to CAL s rescue indefinitely. Success
is not an entitlement...it must be earned.
Peter Berkeley, is a national of T&T, an inter-
national management consultant, and Adjunct
Faculty at Indiana Wesleyan University's School
of Business and Leadership. He can be reached
It's time to clean up
the mess, Madame PM
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