For an industry whose key purpose is to transport passengers across the globe, the airline business has been slow to grasp the advantages of harnessing the fresh input brought by non-nationals. 'Airlines are behind other industries in accepting non-nationals as managers. Airlines may be the most international of businesses but the most nationalistic in terms of ownership,' declares Prof Rigas Doganis, head of air transport at Cranfield University and former chairman of Olympic Airways.
Management mobility is, however, finally taking hold of the airline industry. While airlines previously turned to consultants for fresh ideas and a strategic development plan, sometimes later making them permanent employees, more are now hiring people outright from different parts of the world to stimulate that new thinking.
While there is a general global movement towards the hiring of non-nationals, more recently the trend has been most marked in Europe where airlines such as Lufthansa, Swissair and Virgin Express have hired US nationals for their deregulation experience. 'The management mobility trend has been driven by the need for European airlines to embrace the free market - they look to those who have done it before,' says Frank Wade of consultants SH&E.
While the hiring of non-national managers may bring much needed expertise to an airline, short-term difficulties are likely as the executive adapts. UK citizen Michael Harrington, president of Saab Aircraft International, a former general manager of Italian startup Alpi Eagles and an ex-Alitalia manager, warns that 'you can't transport US ideas into Europe wholesale - you have to adapt that to a multinational environment'.
Adapting to any new job is tough but when you have to grapple with a different language and culture, the task is considerably more daunting. While the economics of an airline are the same worldwide, the political, social, trade union and cultural environments are very different, points out Doganis. Non-nationals face a potential minefield of linguistic, social and cultural faux pas as they come to terms with different working priorities, values and ethics.
Dutch-born Walter van West, vice president finance at Gulf Air, says a major pitfall is not understanding and respecting local behaviour, people and the way they think. 'To succeed here you have to recognise differences and accommodate these as much as possible'.
Van West's experience provides a clear example of the challenges faced by newcomers working in a completely different environment. Even accommodating differing time factors remains a major challenge. 'Everything's much slower here; a contradiction to this is that major decisions can also be taken quite suddenly and unexpectedly,' says van West.
As well as different approaches to business, one of the non-national manager's key priorities is how to handle and develop personal relationships. Whereas in Europe business people may meet with an agenda with a view to reaching a conclusion, van West finds that in the Gulf 'three quarters of the time can be spent talking to each other on a personal level'. Moreover, while constructive critiques may be part of modern management in the western world, in the Gulf states they can be seen as personal attacks, says van West.
Managers also run the risk of provoking resentment and alienating the existing management team if they fail to implement changes in a diplomatic manner. 'Old managers can resist changes because it implies that the way they have been doing something for 15 years is wrong,' says Harrington.
It is clear that personality, diplomacy and respect of another nation's differences are decisive factors to being a successful manager abroad. Managers should take heed as the industry becomes more global, liberalisation takes hold and airlines increasingly require the lateral-thinking expertise of non-nationals. 'We've only seen the tip of the iceberg in terms of management moves. Management mobility hasn't become really prolific yet,' predicts Harrington.
Nationality: US
Current position: Chief executive officer of Virgin Express.
Previous position: President/CEO of Continental Express.
What has Ornstein brought over from the US? Aggressiveness, drive, technology knowhow, and 'a certain level of very valuable experience I've gained by default from the US deregulation process'.
Anthing else?
Oh, and dry cleaning expertise. 'When they deep clean plane interiors in the US, they scrub them. Here, they just dust them and charge three times as much.'
So what's the big deal?
It shows how in Brussels they 'accept sub-standard service levels' and delays due to the 'far less competitive environment' there compared to the US. 'If you buy a car here the salesman tells you there's a six month delivery period. In the US they'd sell you the one in the showroom.'
Why is Ornstein a frustrated man?
Because of the resistance put forward and the time taken to implement change in Europe.
Any small-scale examples?
'Whenever I got a phone-call, my secretary would put the caller on hold and wander around the office for 10 minutes looking for me. When I proposed a paging system, though, people were aghast and I met with incredible resistance.'
What is the biggest challenge he faces as a US national in the European airline industry?
Lack of access to slots. 'You can shoot a cannon down the runway most of the time at Brussels airport. It's empty yet they say there's slot restrictions.'
Is Ornstein agitated by Europe being less advanced in the deregulation process than the US?
Although Ornstein can find it very frustrating, he also sees it as a great opportunity. 'Damn it - otherwise, I wouldn't be needed!'
Will European deregulation replicate the US experience?
No. Deregulation in Europe will take place at a much slower speed due to the lack of airport access, says Ornstein. 'In Europe, we'll just chip away at the dam which will then crack. In the US, the floodgates opened'.
Major pitfalls to avoid as a US national running a European airline?
'You can't assume that you can do everything as in the US. But you can't let people convince you that you can't. You have to keep pushing in the right direction. You have to press the process.'
What burgeoning potential does Ornstein identify in Belgium?
'There are very good people here who just need pointing in the right direction'. However, Ornstein sees Belgium's heavy tax system as 'sucking the initiative out of people' and pushing a large part of the economy underground.
Resentment from locals at a USnational taking a top management position?
He's 'shocked the troops into good relations' by getting employees involved at grass-roots level and putting line people in at management positions.
So it's a case of knocking down hierarchical walls?
Yes, literally. Ornstein knocked down the walls at the Virgin Express headquarters as part of his US open-style approach. 'They said people will be talking; I said that's the idea'.
Problems due to the language barrier?
Ornstein admits to communication confusion, saying Richard Branson was shocked when a fed up Ornstein once told him he was 'really bummed'. But Ornstein is 'very impressed' how everybody speaks English in Brussels.
Surely that's not taking advantage of Belgium's rich linguistic heritage?
No need. In Ornstein's books Belgium's dual French and Flemish languages are 'paralysing the whole country, making communication more difficult and an example of why there isn't a United States of Europe.' Having to advertise and communicate in different languages makes the whole process slower.
What's the best thing about living in Europe?
Ornstein enjoys being able to 'meet and work with a wide variety of people' and is starting to appreciate the vast cultural and ethical differences between different European countries.
What are Ornstein's favourite three little words?
Just do it.
Nationality: US
Current position:
Chief executive at Swissair.
Former position:
President of Sabre Travel Information Network and former American Airlines passenger sales manager.
What does Katz view as the main differences between the US and Europe?
'There's less of a sense of competition and the feeling that a business is here to be profitable is not as well entrenched. It's simply not as fast moving; there's more of a sense of negotiating and a regulated kind of philosophy.'
Anything else?
In the US, Katz sees shareholder value as 'the mantra, the religion', whereas in Switzerland 'it's a very small cult at best'.
What about management ethics?
Katz views European airlines as lagging behind US carriers: 'Much of US business heavily ties incentives to work procedures and there's a lean management ethic in a large number of US companies.'
Fast-moving US practice and the stability of Swizerland seem poles apart. Isn't an American an unlikely candidate to run a Swiss airline?
No. Katz brings fresh vigour and much-needed experience to a business that has been protected for years. 'If you're looking for experience in a highly competitive, harsh environment and a free marketplace, the US is the obvious place to look.'
So is Europe totally alien to US influences?
Apparently not. Katz says that a great deal of US influences are already at work in Europe, such as yield management, scheduling tools and frequent flyer programmes.
Then is Europe set to follow the same postderegulation path laid by the US?
Not on two essential counts. Katz expects labour rules in Europe to be slow to follow those in the US. The form of competition will also be somewhat different - 'there won't be the bargain prices as in the US'.
Is Katz fed up with Swiss mountain scenery and ready for some US skyscrapers?
Doesn't sound like it. 'The quality of life here is premium. I'm living in a postcard in Switzerland - the place is safe, the trains run on time and the environment is protected like the crown jewels'.
Must be a bit of an easy ride working in Switzerland, then, after the turmoil of the US?
Well, no. 'Switzerland is a high cost environment with much less flexibility than the US marketplace. The US has lots of frequency, lots of airport space and longer length of haul. As these don't exist in Europe the economies don't work the same.'
What about cultural difficulties?
Katz sees Switzerland as heavily rule-orientated. 'If something is not illegal here, it's forbidden.'
How is he adapting to his new environment?
Katz is brushing up his German language skills. Even in English, though, linguistic faux pas pervade. Katz has had to educate the Swissair team into having a 'killer airline'. 'If something in the US is especially good, common slang is to call it "a killer", whereas in Switzerland they take the word literally.'
Aside from language abilities, Katz identifies 'diplomacy' as a key element for Swiss social success. Then there's the problem of adapting to all those holidays. 'It's August and they take an awful lot of vacation here - it's a productivity issue.It may not be a first priority but it's a real issue.'
Nationality: Greek
Current position:
Chief executive of Olympic Airways.
Previous position: Consultant at New York firm Proudfoot.
Karatzas was born in Greece but worked in the US for 25 years prior to joining Olympic. Does this all add up to one confused man?
No. Although he may sometimes feel frustrated at not belonging to one culture, Karatzas feels that his mixed background has made him more able to adapt to circumstances and provided valuable experience for such a transnational business. He considers himself 'a Greek who has learnt to work in an American fashion'.
So does Karatzas feel ultimately Greek or American? Maybe it's best summarised by the way he speaks. Karatzas talks 'in Greek using English mannerisms'. Karatzas, with his Greek upbringing and American working style, claims to have the ability to think and act across nations.
What advantages can Karatzas' transnational approach bring to Olympic?
Karatzas feels that he has been exposed to all aspects of the airline business via his background as an airline executive and a consultant. This is particularly valuable as Greek airline executives can 'have a single dimensional business approach' due to their sole exposure to Olympic. They are not used to 'the cross-fertilisation of ideas and knowhow as in the US, where airline executives move from one carrier to the next.'
What major challenges does Karatzas face?
'To harness individuals' inherent ability and point it in the right direction.' The US boasts more continuous personnel improvement and management grooming processes, he says.
So are there fundamental differences between Greek and US carriers? Undoubtedly, says Karatzas. Most noticeable are the lack of systems and automation, the lack of management information, and the lack of infrastructure - from terminal buildings to air traffic control systems.
But the people are similar? Well no, actually. The US is in favour of 'employee empowerment - training employees to take decisions and be on the front-line' whereas at Olympic, employees are 'empowered by default' and forced into making last-minute decisions for the company to survive. More decisions are taken at a lower level in the US, he adds.
This must mean that, as CEO of Greek's flag carrier, Karatzas holds a lot of decision-making power in his hands?
Not when it comes to his own job. A year-old Greek employment law means that the management positions of all state-owned companies now have to be advertised for tender. Karatzas could be out of a job in September when a new CEO is selected, though he remains confident of re-election.
What does Karatzas like best about living and working in Greece?
The personal dimension of the workplace. Karatzas feels that the lack of formal corporate structure in Greece results in more personal development. He also appreciates the social aspect of Greek life. 'The Greeks are hard-working but are also committed to enjoying themselves.'
How is USderegulation changing European management?
Companies have to switch from a bureaucratic, hierarchical management style to more entrepreneurial, decision-making processes.
Nationality: Mauritian
Current position: Director general of Air Afrique.
Former position: Chairman and managing director of Air Mauritius.
Differences between the two working environments? Air Afrique's French-style work culture is 'more bureaucratic and less commercial' than that at Air Mauritius, where Anglo-Saxon work practices prevail.
Astriking difference lies in the independence of Air Mauritius from outside control. This contrasts with government-controlled Air Afrique, which is used to 11 heads of state influencing its management. Sir Harry claims that Air Afrique has been run 'as if it were a government department with civil servants in it'.
What is he going to do about this?
Sir Harry's aim is to try and make the company 'lean, viable and commercial' in order to return it to profitability ready for privatisation by 2002.
How?
By cutting back on employee numbers and hierarchical levels - currently Air Afrique has one executive to roughly 10 employees. Tirvengadum also wants to place a greater emphasis on training to help motivate employees. More modern technology, including IT accounting and revenue systems, will reduce the amount of paperwork.
What are the toughest tasks as a non-national at Air Afrique?
According to Sassy N'Diaye, Iata's African regional director, the major problems are cultural and not management ones. 'Sir Harry has nothing more to prove as regards running an airline'. Sir Harry previously had a free hand to run Air Mauritius and is not used to serving 11 masters, he adds.
Will Air Afrique's owner governments resist change?
According to N'Diaye they have no choice but to follow Sir Harry and implement recommended changes. He adds a note of caution, however, that 'the pace of change could be too little, too late' and warns that 'there will always be some degree of government tendency to interfere'.
So is Sir Harry the right man for the job?
Yes. His big personality is a great advantage for the airline, according to N'Diaye. 'He's not the kind of guy you can pussyfoot with.'
Why?
'He means business and he's down to earth - he's a decision-maker', says N'Diaye. His management style and philosophy are different but 'the employees will buy it'.
So is he keeping tight control of the reins?
No, actually. One of the changes he's introduced has been to involve staff fully at every level. Each employee is given individual responsibilities to carry out. 'He's simply the leader and they will follow him,' says N'Diaye.
Nationality: British
Current position: Chief executive officer at Kenya Airways.
Previous position: Consultant at British Airways' Speedwing Consulting and group technical director at the former Air Europe in the UK.
In what ways does Davies feel that Kenya differs from the UK in its business approach?
The approach to business is much more formal and hierarchical in Kenya - more characteristic of business structures that were in place in the UK 15 years ago. Debates between individuals can be seen as conflicts. Davies says he has been used to arguing with other people to reach a decision while wearing shirt sleeves and calling each other by Christian names.
What about differences on a personal level?
There's more of an emphasis on family values in Kenya. This extends to tribal values as well.
So does tribal loyalty create social barriers or bonding?
The greater obligation towards fellow members of the same tribe can make it more difficult to discipline tribal members. There's the language issue as well.
But English is the business language in Kenya?
That may be, but Kenyans speak Swahili to each other and there are also 40 different tribal languages to contend with.
But otherwise communication isn't a problem?
Well, different techniques are needed to communicate with the workforce. 'You need to spend more time convincing employees that you have no agenda other than running an airline successfully.'
Has Davies encountered resentment as a non-national running an airline?
Yes and no. While the feeling that 'surely a local could have done what I did' always prevails, Davies is immune to the social, political and peer pressures that can prohibit a Kenyan from implementing changes. 'If someone is found to be underperforming then a Kenyan would find it difficult to remove that person due to their upbringing. Kenyans are inherently gentle and tolerant people and conflict is not something that comes easily to them.' This means that it can sometimes be difficult to convey that you don't hold personal grudges, as Kenyans 'have a tendency to personalise things'.
Can Kenyans be a bit of a 'pushover' when it comes to doing business?
No. 'They only act gentlemanly until they reach breaking point,' says Davies. And it's not unusual to find a law suit on your desk as they tend to adopt a 'US style tendency to litigate when things go wrong'.
So it's unsafe to take social differences for granted?
Very much so. Amajor pitfall is to assume that people around you 'understand your mannerisms, behaviour and body language when, in reality, they don't'. Davies warns that while a British sense of humour may be generally understood, British banter can be misconstrued as rude in a business environment.
So how does Davies surmount language and social barriers?
By infiltrating inbuilt social hierarchies and establishing a rapport with employees of all ranks. Davies feels that he can 'relate to employees at all levels of an organisation after being involved in the industry at grassroots level and working his way up'.
What does he like best about his position at Kenya Airways?
The satisfaction of being involved in something of such importance to Kenya. 'I like being a big fish in a small pond; it makes your achievements very noticeable.'
Nationality: English
Current position: Vice president marketing at Air Canada.
Previous position: Vice president of Mercer Management Consulting.
Has he found differences in previous and current working practices?
No. Duchesne sees more similarities than differences in working attitudes between Europe and North America. 'Ten years ago, there were quite significant differences - but not now. There's very much a global view and basic business approaches are quite similar.'
So what similarities prevail then across the airline business?
'An almost ruthless emphasis on the creation of shareholder value and profitability wherever you are in the global industry.'
What about the differences?
While the core business values may be the same, the way they are communicated is different. 'In North America people can be far more blunt and direct. The drawback may be a 'loss of colour and complexity in language and possibly less of a close relationship with people.' Duchesne also notes the need to understand the differences in the political landscape.
What are these?
Basically the differences between the federal and provincial systems. In Canada, employment practices and law vary greatly between provinces, while they remain the same across the UK.
What about the purported slower pace of business life in Europe compared with North America?
Duchesne declares this to be a deeply ingrained misconception. 'There's an international perception that things move a lot slower in Europe. In my experience, that's not the case.' Regulatory matters often change faster in Europe, he points out.
What has been Duchesne's main disappointment at Air Canada?
Duchesne bemoans the 'intrusive role of national government' in an airline's development. He sees the Canadian government as being 'much more restrictive and less pro-open skies' than many European and the US governments.
What appeals to him about work and life in Canada? Duchesne appreciates Canadian people's 'egalitarian approach' and the fact that 'Canada is a kinder place to do business in than the US'. He also sees inherent Canadian qualities as approproriate values for a service business. 'Canadian values of customer focus, honesty and politeness are very strong things to build an airline brand around'.
Does Canada's dual language system present problems?
Duchesne had a bilingual upbringing so languages are not a problem for him. He is very aware of Air Canada's need as a federal airline to reflect Canada's dual culture and language.
Does Duchesne feel that management mobility is a developing trend? Absolutely. 'To compete well in a global business like the airline industry, you need to understand fundamentally local markets and avoid national myopia.'
Source: Airline Business
