Welcome to the Extreme Change Clinic

SAS CASE

In 2014, SAS was in a tight spot. Again. This was not exactly a new situation for the more than 100-year-old airline company. Several restructuring programmes had already sailed through, but the development in the industry didn’t quite match the expectations. Revenues continued to drop, and SAS was still struggling to become profitable. The next 12 months were to be crucial for the future of the airline. The Extreme Change Clinic was established.
According to the CEO of SAS, Rickard Gustafson, his management team realised already during the implementation of the 4Excellence strategy towards 2015 that the defined measures would not be enough. Thus, SAS had to do something they hadn’t tried before.

SAS established a new transformation division, which was charged with one task, and one task only: to find savings of 2 billion Swedish kroner and to do it fast. Joakim Landholm became the Chief Transformation Officer of SAS, and his division was given almost full authority, with the executive team dedicating a good portion of their time to support it. They called it an Extreme Change Clinic and the underlying idea was to separate and segregate healthy business areas from those in need of change.

Joakim Landholm Bio

In 2012, Joakim Landholm was appointed Head of Commercial at SAS. He has a broad leadership background from both strategic and analytical functions at GE Money Bank, Accenture, Swedbank and RSA Group. Aged 46, he holds a Master of Science in Business and Economics from the Stockholm School of Economics. As the Transformation Division closes down, Joakim has chosen to leave SAS by the end of August 2015.

No room to test and fail

A number of projects and themes were defined across widely different areas such as IT, cargo and crew. The one common denominator for all areas was that the goal was not to do more of the same or fine-tune. These were areas where a radical, one-step change approach would be likely to produce results.

Joakim set his team – with as few people as possible, all hand-picked for the task – they were chosen for their specific skills and proven track record. The result was a team constellation displaying great variance in both skills and personalities with experience from both inside and outside SAS.

Part of the transformation team worked with well-defined projects, but also organisational units in their entirety were checked in at the Change Clinic. Joakim himself was heavily involved in the pilot negotiations, which were concluded in May 2015, resulting in a complete reestablishment of the collective agreements with the pilots – it was a shift from a very complex union agreement with four different unions, to much simpler national agreements with the pilot unions. SAS had embarked on a journey to improve collaboration and trust between itself and the unions.

SAS is Scandinavia’s leading airline. In 2013/2014, it transported a total of 28.4 million passengers to destinations in Europe, the US and Asia.

You’re never really done with anything

In the summer of 2015, the Change Clinique is closing down, having achieved what it set out to do. Experience shows that if you need to achieve rapid, radical change, this works – if you have the right people, the right leaders, and the right conditions. A crystal clear mandate, a high level of trust in the leadership group and clear “check out” criteria are essential prerequisites to drive change at this pace. However, the nature of running a company is that you’re never really done with anything. Extreme change programmes need to be time-limited and have fixed targets. Once you’re healthy, you need to return to your normal life.

Despite its successful outcome, Joakim would not necessarily recommend SAS’ approach to other executives, because radical change creates tension in the organisation, it drains energy, and it comes with great risk. Executives should strive to avoid having to deploy such measures, but SAS had to make decisions quickly in order to move forward.

For companies that do consider applying a similar approach, the one most important consideration according to Joakim is to set the right team – the hand-picked members with complementary expertise turned out to be a winning concept. All ideas have changed and evolved along the way, and this is the essential nature of driving both large- and small-scale change.