The story of British Airways and the success of Lord John King in using KPI's to turn the company around is now business folklore. In 1981 at the request of Margaret Thatcher, Lord King took the helms of British Airways. At the time British Airways initials were said to stand for "Bloody Awful" and according to Sir John Egan chairman of Jaguar, British Airways attitude was the customer was an irritating part of the process.

The company was losing money at the rate of 200 pounds per minute and as the government backed the company there was no urgency for change from within.

Upon his appointment, Lord King called upon a group of consultants to provide advice as to what was required to turn around the company. He was told all he needed to focus on was the timely arrival and departure of planes. I imagine he would have responded, "Really, are you sure, that's all?" To his credit he took the advice and acted upon it.

Lord King instituted a system that ensured he was advised immediately whenever a plane was more than two hours late arriving or departing. Managers then received a personal phone call from Lord King if a plane deviated from the acceptable parameters. I imagine no manager would have enjoyed the 'please explain' phone call from Lord King.

By focusing on the right Critical Success Factor and implementing the right KPI, British Airways was able to change its culture and fix a whole range of issues within the company. Issues such as customer satisfaction, staff motivation, promoting open decision making, positive brand recognition, a bias for action, innovation as a daily activity, increased repeat business from key customers, attracting quality staff to the organisation, increasing adaptability and flexibility of staff, increasing empowerment, etc.

If you're interested in learning what your Critical Success Factors are and implementing the right KPI's in your business then please call Overells to discuss.  For further reading, see:

http://www.nytimes.com/1981/08/08/business/british-airways-lost-254-million-for-year.html 

http://www.nytimes.com/1992/07/13/business/british-airways-chairman-is-seen-quitting.html 

http://cdn.davidparmenter.com/files/2010/10/the-new-thinking-on-key-performance-indicators.pdf