Magazine article Personnel Journal

Employees Drive Reorganization at Sky Chefs

Magazine article Personnel Journal

Employees Drive Reorganization at Sky Chefs

Article excerpt

Although many industries are facing difficulties today, the airline industry faces more than its share. Consider, for a moment, the following problems: the negative effects of deregulation, price wars waged by failing carriers, brisk competition from foreign carriers, aging fleets and soaring costs of new aircraft.

The effects of these problems aren't limited to just the airlines. When the airlines experience bad times, so do the companies that support them. Remaining competitive and profitable has been and continues to be a difficult venture for many of these companies. Such was the case for Sky Chefs, a $450 million in-flight-services corporation based in Arlington, Texas. As a primary supplier to American Airlines and other major U.S. and international carriers, the company had come under increasing pressure to provide improved services while containing or reducing costs.

The solution, according to corporate leadership, was a major restructuring. Management thought that such a move would enable Sky Chefs to meet the immediate industry challenges that it faced and to excel in the future. Although downsizing made good business sense, the company's executives understood the potential problems that it could create. If Sky Chefs managed the process poorly and didn't anticipate employees' needs and reactions properly, it wouldn't realize the benefits of a downsizing.

Looking back, Joseph Primavera, Sky Chefs' vice president of human resources, says that total quality leadership (TQL) provided the company with the framework it needed to implement the restructuring process successfully. During Sky Chefs' quality initiative, which began in 1990, the company invested thousands of hours and dollars to fund training and total-quality leadership-related improvement processes (see "Quality Program Prepares Employees To Lead," page 149). This investment served the company well during the downsizing. Instead of management dictating what would happen and to whom, its employees--the backbone of the company--were empowered to facilitate the process because of the quality training in which they had participated.

EMPLOYEES TAKE CONTROL OF THE DOWNSIZING PROCESS. Feelings of uncertainty were common among Sky Chefs' employees during the summer and early fall of 1992. "Rumors always have a way of circulating before a restructuring. During the late summer and early fall, rumors were beginning to spread, and we weren't sure of what might be just around the corner," recalls Marjorie Cota, manager of organizational development and strategic staffing at Sky Chefs.

To combat the potentially negative effects of the rumor mill, the company held a meeting in September 1992 that involved all 208 of its corporate headquarters' employees. At this meeting, employees learned for the first time that to remain competitive, Sky Chefs needed to cut between $6 and $7 million from the cost of operating its corporate headquarters payroll. To accomplish this, the company would need to restructure.

Aware of the problems that a downsizing could create, the company reassured employees by announcing that workers would facilitate the process with their own participation and contributions. Because management would take its cues from employee input, the company promised that the restructuring would be implemented fairly, with an emphasis on caring, smooth transitions for those who ultimately would leave the organization.

To help foster employee involvement, Sky Chefs' leadership began by encouraging and addressing employees' questions. "We were frank in answering questions, and we answered them all," says CEO J.J. O'Neill. "Even the very tough questions were answered honestly and in a timely manner."

In addition, before the restructuring process began, the company consulted its employees first. When every position in the company's headquarters organization was scrutinized, employees participated in evaluating all headquarters functions via a Job Action Form polling process. …

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