Getting rid of the baggage
When Patrick Verwer joined airport ground-handling business Aviance UK as Chief Executive in November 2007, he knew it faced financial difficulties. But he took the job, because he was told that operating performance, health and safety, trade union relations and so on were all very good, giving him a good basis to start from.
“I thought the only thing I had to sort was the financial deficit,” he recalls. “I was new to the aviation business, so maybe I was a bit naive. But I very quickly recruited a new Finance Director, and after speaking to a few people and doing some initial analysis, we quickly established that the deficit was even bigger than I had been led to believe. So the problem was huge, particularly as the aviation industry is so competitive and revenues are heading south.”
But this wasn’t the end of it.
“We rapidly became aware of another problem – the lack of management competence, including in Human Resources,” says Verwer.
So the plan to reverse the losses expanded into a major turnaround programme. The initial target was to save £6 million costs in a year.
“We identified five or six areas to improve on, including labour efficiencies,” recalls Verwer.
Realising that Aviance UK could only survive if it restructured and changed its culture, Verwer brought in a Change Director on an interim basis. By the time Impact Executives interim director Sheelagh Grime joined in May 2008, the head of HR had resigned, so Grime had a clean sheet of paper.
Her remit was four-pronged, explains Verwer.
As an interim you can be tough and you can challenge in a way that is more difficult for a permanent manager
“I wanted her to co-ordinate the restructuring, as well as building the kind of high-calibre HR function that could really support the business and help develop management capabilities. I also needed her to conduct a pay review with the trade unions and renegotiate the different employee relations policies – redundancy, absence and grievance procedures, for example – in order to harmonise the 15 or so different contracts we were running as a legacy of a series of mergers and acquisitions.”
Grime was well qualified to handle the task. A professional interim for ten years, she has a strong industrial relations background and specialises in change assignments where she has to challenge the status quo.
“As an interim you can be tough and you can challenge in a way that is more difficult for a permanent manager,” she says. “Your primary motive is to turn something around, and if you ruffle a few feathers along the way, so be it.”
And Grime quickly showed she meant business. “I sacked someone, and there were then two more significant resignations within HR and Training: the Senior HR Manager and the Training Manager. That made a difference early on. It meant I could restructure the training department to make it more responsive to the needs of the individual stations. We also aligned it to health and safety compliance, where we had real issues. In the past training and health and safety didn’t collaborate, and worked with different and often conflicting priorities.”
This was the first step towards making HR a service department for its internal customers.
“Until I arrived HR was little more than an admin function,” says Grime. “They now have direction, responsibility, authority – and, crucially, the confidence to work with station managers to help improve performance, helped by a new understanding of operational data. Watching some of the HR managers grow in skill and confidence has been particularly rewarding.”
But while Grime was changing perceptions of the HR team about their own role, she also had to change perceptions of managers about what HR could do for them.
“Senior managers were initially a bit hostile to what I was trying to do,” she recalls. “They saw HR as the people who would get them out of trouble when necessary but who had no part in the day-to-day operation. I got around their hostility by asking them what difficulties they faced and how HR could help them run their stations more effectively, building alliances with them to help them solve problems.”
She proved equally adept at holding the unions to account.
“There were a lot of poorly trained managers who were saying ‘we can’t do that because there is a union agreement’. I refused to sign the proposed union agreements. Instead, we agreed to pay an annual increase in exchange for their agreement to renegotiate all the policies centrally. It took ten months to sort it out, but we now have one set of national policies and agreements.”
She turned the unions around through perseverance and an honest, open and consistent approach. But she took no prisoners
The work Grime has done with the trade unions will be key to the turnaround of Aviance, says Verwer. “She was rock solid. She turned them around through perseverance and an honest, open and consistent approach. But she took no prisoners.”
While she has turned the HR department into a much more professional operation, improving management capability across the business takes longer to achieve, particularly during a restructuring, as Verwer acknowledges. What’s more, he adds, Grime was constantly distracted by additional problems.
“She spent a lot of her time firefighting, because every stone she turned over and every cupboard she opened revealed more issues we needed to address. It was like being on a battlefield. However hard we worked, there were always more and more things to be resolved. But we four directors persevered and pulled together to regain control of the business, which is now far better positioned to move forward.”
As a result, the culture is very different now. “In the past people used to play one director off against another,” says Verwer. “They know they can’t do that now, because we all have one consistent message.”
But while Grime has helped Verwer and his fellow directors bring order to chaos – and exceed their £6m cost savings target in the process – the team can’t relax their efforts. “Unfortunately, £6 million is not enough, because revenues have fallen over the year too,” says Verwer.
The number of staff has been cut from around 5,500 to 4,000, but further restructuring is on the cards. After a year in the role, Grime is very conscious of the need to strike a balance between staying so long so that she becomes indispensable, and dealing with ‘unfinished business’.
“Sheelagh has exceeded my expectations of what I thought she would be able to achieve in a year,” concludes Verwer.