No Image Available

Paul Duncan

Interim HR Director

Read more about Paul Duncan

HRD Insight: Paul Duncan on managing change at Swissport

pp_default1

When I joined Swissport International as interim HR director in December 2008, the UK arm of the €1.3bn airport ground services business was in the initial stages of a turnaround.

This activity was being led by chief executive Mark Faulkner, who had arrived two months earlier from another company in the Ferrovial group, which was Swissport’s parent (at the time). Turnarounds are always challenging, but the trickiness of the task was compounded by a steep downturn in demand for the firm’s services as many passengers had simply stopped flying.
 
Because the company was unable to trade its way out of the problem, the only other option was to lower its costs, so an initial task was to implement a centrally-agreed 10% headcount reduction.
 
Swissport’s management culture had historically been highly centralised, with little or no input from the regional managers responsible for service delivery to customers. But that also needed to change. The problem was that the managers did not understand budgets or even the basics of profit and loss accounts, leaving them in no position to challenge head office decisions.
 
As a result, at the same time as the redundancy programme was taking place, we set out to up-skill each and every manager, organising a two-day business simulation workshop in March 2009. Five teams competed to run a business over the course of a two-year period.
 
An unexpected finding that came out of the exercise, however, was that many of the most senior people had never actually met before.
 
It also quickly became apparent that we needed to re-engage employees and build trust. But at all of the major airports, and particularly Gatwick and Stansted, all communication with staff took place via the trades union.
 
Big HR challenges
 
So, in order to improve employee/senior management relations, we introduced a range of communication tools, including forums, newsletters, team briefings and coffee meetings. We also produced three CEO videos, where Mark explained his turnaround plan and the progress that was currently being made.
 
Importantly, managers were likewise coached in how to engage their staff and create an environment that would encourage open dialogue and honest feedback. Mark and I recognised that we too needed to walk-the-talk and spent a lot of time, separately at different airports, simply talking to personnel and trying to win support from local managers.
 
As the year progressed, we faced numerous other challenges. Top among them were building a completely new HR team, which was to focus on learning and development, and reviewing and introducing HR policies and processes, including those relating to succession planning and leadership training.
 
A new Learning Centre was also created at Swissport’s Birmingham Airport headquarters, which had the added spin-off benefit of bringing people together from different airports.
 
But the major HR challenge of 2009 was unforeseen. It arose from a two-stage pay deal that was agreed in August 2008 prior to either Mark’s or my arrival. By April 2009, however, the company’s circumstances had changed markedly and the deal was no longer affordable.
 
The problem was that, while honouring it was commercially unfeasible, not to do so would put us on a collision course with the union. We soon found ourselves facing strike ballots at all airports, but we stood our ground and our rational appeals to employees won the day: industrial action was avoided.
 
By the end of 2009, the business was reinvigorated enough to move to the next stage. Although we made a small loss for the year, both the new management and our masters in Zurich felt confident about the future.
 
Finding a replacement
 
It was now time for me to move on to a new challenge, but first I had to find my permanent replacement, who finally arrived in March 2010. But something totally unexpected occurred when Mark Faulkner resigned – an event that threatened to derail the whole change process that he had to date embodied.
 
Finding his replacement fell to the Group HR function in Zurich, which put three options on the table:
 
  1. The senior team could run the company without a leader for a while. The problem here was that all of the senior managers were fairly new themselves – and, I felt, not ready
  2. Juan-José Andres-Alvez, Mark’s Zurich based boss and executive vice-president for the Europe, the Middle East and Africa region, could visit once a week. But I felt that such a move could have a negative impact on his ability to perform his wider role, which could end up damaging his reputation
  3. HR could accept an offer from one of the existing directors to become interim chief executive until a permanent candidate was appointed.
 
But in my view, the best solution was to hire in a top-level interim chief executive from outside of Swissport – someone who had heavy-weight experience in turning around service-led businesses. Mark agreed, and together we persuaded Juan-José to go down this route, even though he was initially sceptical, not least on cost grounds.
 
I felt that it was essential to identify someone who could join the business immediately, maintain its trajectory, win the respect/support of other directors and demonstrate strong leadership skills. It was a tall order, compounded by the fact that Mark was a difficult act to follow.
 
But I approached Steve Dengel who leads the Birmingham office of BIE Interim Executive, an agency that specialises in finding senior interim executives, who I knew of old.
 
He sent me six candidates for interview and I presented three of them to Juan-José. I had already identified Robin Dickie as my preferred choice. Without making this fact known to Juan-José beforehand, he went on to arrive independently at the same conclusion.
 
Robin is a turnaround specialist with a background mostly in retailing. He has held senior executive positions with Boots, WH Smith and was also chief executive of private equity-backed regional department store chain TJ Hughes, where he doubled profits and delivered record financial performance.
 
Dispassionate and apolitical
 
Starting at Swissport in the middle of May 2010 for a six-month term, Robin overlapped with Mark for two-and-a-half weeks – not much time, but enough. His remit was to fit in quickly, complete the turnaround and act as leader of the executive team.
 
The aim was to ensure that Swissport was able to maintain the current momentum behind the turnaround and ensure that the business was in a position to move back into growth mode. Lots of efficiency measures had been planned, with a key goal being to become more customer-focused.
 
Towards the end of last year, however, Swissport’s search for a permanent chief executive was still failing to produce suitable candidates, so the company asked Robin to stay on for a second, extended 12-month term. Under the terms of the original deal, this situation could have proved expensive, but BIE agreed a sensible alternative.
 
By mid-2011, the UK business had significantly improved its performance. It exceeded its 2010 financial targets, met or surpassed each one of five key performance indicators and retained every major service contract – some on enhanced terms – while also winning new ones.
 
In my view, a key advantage of employing senior interim executives is that they can coach and mentor in a way that permanent leaders are unable to as they are more dispassionate and apolitical. Robin, in particular, helped everyone to set higher aspirations – and achieve them.
 
While at the start he had signed up to hit ten very clear and detailed performance goals, he pushed his managers to aim higher. This gave them both tremendous focus and the confidence to do better.
 
Although I have now relinquished my UK HR director role, I remain associated with Swissport, having also helped them deal with some issues outside of the UK. But it’s professionally and personally very gratifying to see the UK business continue to succeed.
 
The next challenge that the company faces, however, is to replace Robin Dickie with a suitable successor. But having already replaced one act that was hard to follow with another, I’m confident that the same will happen again.

Paul Duncan is an interim HR director and was a former HRD for Alstom, Jewson, Poundland, Flybe and Transport for London.

One Response

  1. A perfect example

     Paul – an interesting read and a perfect example of how a senior HR interim can make a real difference to a struggling business.

No Image Available
Paul Duncan

Interim HR Director

Read more from Paul Duncan
Newsletter

Get the latest from HRZone

Subscribe to expert insights on how to create a better workplace for both your business and its people.

 

Thank you.

Processing...
Thank you! Your subscription has been confirmed. You'll hear from us soon.
ErrorHere