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Introduction
The star alignment model helps to divide the overall organizational culture into parts to examine them individually, covering as many aspects of the company as possible. In this paper, the star alignment model will be used only on the strategy side, that is, to define the corporate vision and mission that guides the company’s development. Strictly speaking, strategy as a component of the model determines the overall business model, so the analysis should start there. This article examines the example of LAX International Airport as a dynamic business model.
Assessing LAX’s Transformation in 2019
To critically assess the success of an airport’s corporate transformation, the first step is to identify a starting point. The case study reports that Deborah Flint took over as CEO of LAX (LAWA) in the summer of 2015 and left by the end of 2019. Thus, to assess the success of the transformation, we need to focus on the changes that have occurred in those incomplete five years. First of all, we can turn to the metrics already cited in the article: LAX has risen 27 places in the ranking of the best airports in the world, terminal capacity has increased by 20 million people, and flight growth has increased by 9.8 percent (Groysberg, Herman, and Knoop, 2020). In terms of net income, the company’s profits increased by more than 35.4 percent compared to 2015. From one perspective, this kind of performance indicates an apparent success of the company’s transformation to 2019; the increase in financial and operational results speaks to the literacy of management.
However, one cannot expect LAX’s increased capacity and workload to produce the opposite results as well. More specifically, the current state of the airport is due to a complex transportation system, high traffic congestion, and extended cab wait times. From a customer perspective, neither increased profits nor more flights are likely to justify creating traffic chaos that causes additional inconvenience in using the airport. As for any changes being made to LAX, the reason for them must be understood. As noted, the City of Los Angeles development program was launched in March 2013, and the LAX airport was a significant link in this transformation, as it was effectively a gateway to and from the city (Groisberg et al., 2020). A reference to Figure 1 makes it clear that the reform initiated by the city authorities could not have been ignored by the airport management since they are lower in the hierarchy of authority. For this reason, the airport had to be as comfortable as possible and the experience as favorable as possible. Consequently, the priority in strategic change was based on speeding up the airport’s operational processes and improving passenger safety and comfort. As seen in 2015, Flint was tasked with reliably integrating various parts of the airport to take it to the next level. Summarizing these factors, it is worth saying that the effort to transform the airport by 2019 has been a success. Improvements in key business management metrics are a reliable indicator of the productivity of the effort. Flint was able to meet its goal to a greater extent; namely, the consolidation of parts of LAX increased passenger traffic and made the airport the fourth busiest in the world. This is excellent proof of sound operational management. After all, independent agencies would not give LAX good marks if the changes really were not noticeable.
However, it is impossible to make improvements on all fronts at once. By investing in airport development and capacity improvements, Flint is ignoring the passenger convenience aspect. Customer satisfaction is an important part of business success, and as seen in Figure 1, the guest experience prevails in LAX’s organizational structure. Flint has developed its vision for the company to improve the guest experience; in fact, LAX’s mission has been restructured to focus on airport guests as a whole, improving their experience. These facts may indicate that LAX will continue to improve the customer experience at the airport, but by 2019 this was unacceptable.
Hiring a New Executive Director
Deborah Flint was LAX’s savior from 2015 to 2019, but she has left her position as executive director. A board interested in finding a new leader might heed some of the recommendations in this section. First, they should focus on the organizational strategy created by Flint, which has already demonstrated quality results. The board can use the strategic vision LAX created earlier to develop additional improvements at the airport. For example, the new CEO should have excellent organizational experience in improving customer satisfaction, as this is a top priority. Candidates who have already shown in their previous jobs that they can seriously improve customer satisfaction should be considered. In addition, experience in changing the transportation system would also be helpful since, in the case of LAX, improved transportation accessibility and reduced congestion are predictors of increased customer satisfaction.
However, this is not enough to continue to maximize improvements to the airport. The board should look for an executive candidate with excellent leadership skills and a strategic vision. The ability to rally people around him or her and motivate them to work are fundamental criteria for such an executive. In Flint’s example, the new CEO should invest resources in training employees to create a unified corporate culture that easily adapts to change. This should not be a conservative leader whose ideas and views are closed to public changes and opinions because the airline industry is a highly dynamic environment, sensitive to political and economic changes in the world.
Recommendations for the New CEO
It should be understood that the new CEO will come to a company where there is already a serious problem causing discontent among the citizens. Deborah was able to improve the corporate culture, but the problem of the transportation system was never solved. Consequently, the new CEO over the next three years should be focused on solving this problem while maintaining the changes previously made. Improving the transportation system will allow LAX to improve the passenger experience. This is expected to significantly enhance the attractiveness of the airport and the new CEO’s reputation as a director who knows how to solve pressing problems and hear from customers.
In his first hundred days in office, the director must demonstrate his commitment to making a difference. This applies not only to working in the media space but also to taking tangible steps. For example, one needs to initiate a meeting with the municipal road department and begin the process of discussing changes. The first ideas could be widening the roadway, adding highways, and limiting parking times at the airport. To demonstrate their loyalty to customers, members of the public and media will be invited to these meetings to voice their opinions and participate in the discussion. Creating a separate road design commission for airport areas would be a wise strategy in the first hundred days as CEO. Additional working groups may also need to be created to focus on improving customer service.
Considering COVID-19, the new CEO’s job becomes much more difficult because of the restrictions imposed by governments. One of the main recommendations that should be given to the new director is the need to use downtime wisely in order to implement as many changes as possible and organize repairs while airports are closed for international departures (Al Jazeera, 2020). It is necessary to use the allotted time wisely and adapt quickly to the changes; only this will help to survive the COVID-19 experience as painlessly as possible.
References
Al Jazeera. (2020). Coronavirus: Travel restrictions, border shutdowns by country. Al Jazeera. Web.
Groysberg, B. Herman, K. and Knoop, C. (2020). The new LAX: Ready for takeoff [PDF document]. Web.
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