The Demise of Northwest Airlines
The end of the oldest airliner in America...
For now - October 2009 - you can still fly Northwest Airlines (NWA) - at least until the logos on the all the planes have changed to 'Delta'. NWA, which was acquired by Delta for $2.8 billion on October 29, 2008, transports passengers and cargo to about 240 cities in North America, the Asia/Pacific region, and Europe. Its US network includes locations served by regional carriers operating as Northwest Airlink. NWA's fleet includes about 320 aircraft; regional partners operate another 200 aircraft. The acquisition by Delta created the largest airline in the world by traffic. Once the integration of the two carriers is complete, Delta will operate a fleet of about 775 aircraft and serve more than 375 destinations worldwide.
About strategic alignment and hotel vouchers...
In 2008 I was grounded on more occasions with NWA than with all other airlines I have flown that year combined (and NWA was no more than 10%). In fact, on every multiple leg flight I took with NWA in 2008 something went wrong. On one occasion - on my way to Amsterdam via Minneapolis - I was grounded in Boise, Idaho due to 'mechanical problems'. On that specific occasion it took me nine hours (!) - in spite of my frequent flyer status - to collect a hotel voucher, simply because of the fact that the NWA ground employee wasn't empowered to hand out vouchers; only the NWA supervisor was allowed to do so, but unfortunately he was on leave... By the time I had the voucher the sun was rising, and there was no point in using the voucher anymore.
As a contrast: with my airline of choice for two decades - Lufthansa - my frequent flyer status assures me that I will be in any hotel within twenty minutes after cancelling a flight - no questions asked. In fact, in 20 odd years of frequent traveling (of which 70% with Lufthansa) the German international airline has never caused me any problem... They will get me to my destination whatever it takes, even if it means putting me on board of a flight of their fiercest competitor, which has happened to me on several occasions in the previous years.
Probably the best example of a well aligned organization in the airline industry is Southwest Airlines, where any employee would have taken the initiative to hand out vouchers, simply because they are trained to follow common sense and not just rules. In fact, It wouldn't have surprised me if a Southwest Airlines employee had invited me to stay at their home in a situation similar to that in Boise... Read more about Southwest Airlines here...
Where did it go wrong with NWA...?
NWA is an example of a poorly aligned organization with low staff morale, occupied in a constant struggle against bankruptcy. NWA's brand promise is (was) 'Safety. Reliability. Comfort. Fairness. Courtesy. Honesty', followed by a long sum up of promises of which very few were made true to customers (and in fact, the page with disclaimers to the promises was even longer). Employees didn't seem to be involved in the brand promise, and everyone who has traveled with NWA can account for the personal indifference and the lack of fairness and courtesy many of the staff demonstrated over the last decade. Personally, I have rarely ever spoken to any other frequent flyer who was not at some point disgusted by NWA's lack of service, reliability, fairness, courtesy or honesty.
A recurring issue in NWA's history is its troubled labor relations. In 1998, Northwest walked away from the bargaining table, locked out its pilots (represented by ALPA) and shut down the airline for more than two weeks. The airline sustained heavy losses as a result, and ended 1998 in red figures, after being profitable since 1993. This pattern has been constantly repeated since, costing the company a fortune, and killing the motivation of the NWA employees.
Apparently NWA has never positively involved its employees in shaping the future, one of the great benefits of strategic alignment. Apparently none of the leadership principles like in our 'Six-Pack for Success' guidelines have been used to create the same kind of employee commitment and ownership as Southwest Airlines and - to a somewhat lesser extent - Lufthansa have been able to foster. From interviews with NWA leaders and employees we have put together the picture of a remote and aloof leadership, lacking empowerment (see the voucher incident above), lack of transparency, failing communication and a general atmosphere of people being insignificant numbers.
And even a full year after Delta aqcuired NWA, many of the staff don't exactly know what their future will bring, and what the acquisition means for their daily work. The transition from NWA to Delta seems to be a poorly orchestrated and poorly communicated operation. As of October 2009 you may board a plane with a Delta exterior, a NWA interior, and a staff originating from both companies, insufficiently trained to properly work together. This was clearly demonstrated in October 2009 when on an intercontinetal flight from Amsterdam to Minneapolis a (former) NWA stewardess in the businsss class of a plane with a Delta exterior and NWA interior handed me a NWA complaint form (I had no complaints whatsoever) with the request to complain to the Delta Airlines management about some issues bothering her and her colleages regarding on-board service... What does this tell you about strategic alignment...?
[more to follow soon]