Case Title: WestJet Airlines: Information Technology Governance and Corporate St
ID: 425269 • Letter: C
Question
Case Title:
WestJet Airlines: Information Technology Governance and Corporate Strategy. Munro, M. C. & Khan, S. (2013). Ivey Publishing.
Case Synopsis:
WestJet Airlines was a "high-value, low-fare airline" that began in 1996 as a regional carrier serving five western Canadian cities from its home base in Calgary, Canada. By 2011, WestJet had over ninety aircraft in the air serving eighty-one destinations in North America, Mexico and the Caribbean. With nine thousand employees, the company had become the second-largest carrier in Canada and the ninth largest in North America. But a 2009 move by IT to the Sabre reservation system "that did not go as smoothly as planned" and a strategic move to implement codesharing and several other strategic IT applications to enhance WestJet's competitiveness prompted the CEO and his executive team to hire an experienced CIO to bring WestJet up to par with other airlines.
Cheryl Smith was an extremely experienced and highly successful IT executive who had held senior positions in a number of large organisations including McKesson, a Fortune 50 company where she served as executive vice-president (EVP) and chief information officer (CIO). Smith was hired by WestJet in April 2011 to assess IT competence and take IT to the next level as part of a corporate drive to gain competitive advantage by delivering innovative guest services. Smith saw IT as the key to WestJet achieving its ambitions and corporate growth. She formulated an ambitious plan to restructure the IT organisation by providing WestJet with a new IT governance model. The transformation included a major reassignment of IT personnel and a reorganization of IT planning and budgeting, which impacted several other related processes. But senior IT staff members, some of whom had been with the company since the beginning and played a major role in developing the existing systems, believed her plan was unworkable. Smith had to convince both senior management and the IT group that implementing her new IT governance model was essential if WestJet hoped to achieve its strategic goals.
Additional Reading
R. Nolan and F. W. McFarlan (2005). Information Technology and the Board of Directors. Harvard Business Review, pp. 95-106
(https://hbr.org/2005/10/information-technology-and-the-board-of-directors)
F. W. McFarlan, J. McKenney and P. Pyburn (1983). The Information Archipelago - Plotting a Course. Harvard Business Review (Jan-Feb). pp. 145-156.
(https://hbr.org/1983/01/the-information-archipelago-plotting-a-course)
Kotter, J. P. (2001). What leaders really do. Harvard Business Review
Kotter, J. P. (2007). Leading Change. Why transformation efforts fail. Harvard Business Review, pp 92-107
Jones, J., Aguirre, D. & Calderone, M. (2004). 10 Principles of Change Management: Tools and techniques to help companies transform quickly. Strategy+Business Magazine
Assignment Questions
Study the case carefully and answer the following questions
A. When Cheryl Smith, the new CIO, arrived at WestJet, she was asked by the CEO to advise on the state of IT at the company. Propose any applicable IS/IT change management issues that you think Cheryl Smith should highlight in her response to the CEOs concerns.
B. In organising her assessment, Cheryl Smith undertook to provide a comprehensive answer to her initial assignment, i.e. to inform the CEO and senior management regarding the overall quality of their IT operations. Critique her assessment of the apparent problems.
C. Hypothesize how Cheryl Smith could use McFarlan's Strategic Impact Grid to help senior management better understand the importance of IT's role in the organisation in terms of its existing operating systems and future systems.
D. Briefly summarize why Smith's solution might engender resistance from both senior managers and the IT group, and discuss the change management strategies that Smith could apply to defuse the resistance of staff to change.
Explanation / Answer
Answer A: The key issues that cna be highlighted are:
- resistance from internal IT personnel ,senior IT staff and lack of cooperation in implementig the new IT governance and oganization
- Retraining and skill enhancement which would imply budget and time for training
-Communication and access to all staff to apprise them of the expected changes and their roles. The message might not get cascaded to the lowest rungs of the organization
-Human elements might be missing due to lack of inputs /active participation from staff
- lackadaisical and casual attitude of senir staff in omplemeting the changes
-Road blockers may tr to sabotage the entire plan
-Employee churn may increase if the staff is not comfortable ith the change or if they don't want to come out of their comfort zones.
Answer B: Smith had considered that only IT will be the way forward to achieve the strategic objective and that the only solution is a sharp and swift change in the IT governance , organization and realignment of the staff rles and responsibilities.However there could be other strategic moves like operations improvement, service quality that could have brought significant gains if adopted along with incremental changes in IT to support those moves. She had considered only the external view without having any idea about the internal operations , inputs from the existing team who were experienced in running the show for a long time. Her plans might be too ambitious to be supported by the existing infrastructure.She shoul go for a phased change rather than a swift and drastic change .During the maturity assessment she should apply KPI driven framework to quantify and qualify her findings and support her decision making so that it finds wider acceptance
Answer C: The framework can be leveraged to identify the impact of strategic IT decisions for the entire organization, department or business units . It can also be used to analyse the dependecie and interelationships of vaious applications. The anaysis can be carried out by plotting the impacts of IT strategy on core operations vs the impact of IT strategy on business strategies for sustainability in future.This would help in determining the direction of change : factory, strategy, turnaround,support.Also it would provide the role of leadership basis the positioning of the organization in the matrix
Answer D:The reasons and possible ways to mitigate them are as follows:
- Trust issues and discontent : She is seen like an outsider and is iven the impresion that she is deemed to be better than any of the experienced IT staff serving n the organization for a long period and who knows the organization in and out. This issue can be resolved with proactive involvement of leadership who cna instil confidence among the senior staff that she is here to help them out rather than take /gulp their job or to make them redundant.
-Communication: Since the solution has to be implemented very swiftly, the core message may not get propagated to the grassroot level of the organization. This may be resolved by addressing the staff persnally in small groups and addressing their issues,queries and apprehensions.She must also take into confidence the senior staff to ensure that any concerns are highlghted to her or addressed properly at their level.
- Staff training: Reassignment of the roles and responisbiites of the staff would mean proper training needs to be imparted to enable them to perform their duties. Budget and suitable training schedule shuld be planned for staff enablement
- Top Executive Buy in: She should get appropriate buy in from the senior IT staff who are well versed with the operations of the company and rather than thrusting her ideas on them she should have workshops, brainstorming session with them to further refine and change her ides if necessary so that veryone s completely aligned and the senior IT staff has sense of ownership.
-Prioritize strategy as per their impact analysis: She should go for incremental changes rather than trying to impose everything in one go. The phased implementation shoud be done basis prioritizing high impact and low effort items first .
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