16SEP05/CE
My working life after SAS DATA…
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Introduction and reflections
The appointment to become the IT head of Scandinavian Airlines (SAS) – VP & GM SAS DATA – was in fact a surprising challenge to me. Everybody was aware of the national ‘out of balance’ in the SAS senior management team (too many Swedes) and the head-hunter assigned to find the successor of Toralv Korsvold had the ‘marching order’ to find a Dane or a Norwegian. To cut a long story short, thanks to a ‘coup d’etat’ by the entire management population of SAS DATA, I was asked to come back to the SAS DATA I had left only a few months earlier, to head the organisation temporarily while the external search was going on.
Things obviously worked out very well – in January 1982 Jan Carlzon asked if I was willing to accept the position permanently, which I gladly did.
Six very challenging years as the commander of the IT organisation! A period of many changes – the prime one probably being the increased IT awareness in the society, leading to significant user – or ‘customer’ as we had started to call them – demands for more independency from the centralised IT organisation.
Although SAS DATA was a separate business unit in the SAS Group – we did not have our own balance sheet and the P&L was in essence only a ‘funny money’ reflection. No real business challenges – although at that time I was surely believing so.
After 5-6 years in this position, I started to feel ‘time to move on’ and when AMADEUS was formed and I was offered the CEO position, this was an opportunity I couldn’t turn down.
My wife Birgitta and our youngest daughter Maria moved to Madrid in August 1987, the two older children were already in university.
AMADEUS
SAS had been invited to join AMADEUS as a founding airline very late. Air France, Iberia and Lufthansa had already been talking for a long time. The European airlines were divided into two groups and SAS had not yet decided which one would suit best. We had ‘secret’ meetings with both sides – AMADEUS and Galileo.
SAS had already a revised IT strategy approved by Board which included a gradual migration of the Unisys main frame applications to an IBM platform. Therefore Air France, Iberia and Lufthansa – the all-Unisys airlines that had formed AMADEUS – were not the ideal partners to SAS seen from an IT point of view. Commercially however, the AMADEUS airlines were more similar to SAS, with strong home markets and a reasonable good control over the travel agency market – SAS was then the 100% owner of Nyman&Schulz in Sweden and Bennett in Norway, as two examples. So, we adopted the approach that “go with AMADEUS but convince the other founding airlines to adopt an IBM strategy as well”, thereby killing two birds with one stone.
After some resistance, it worked. Lufthansa was the easiest partner to convince and Air France the most difficult since they had just signed a long term extension deal with Unisys. As a compromise, we agreed to stay on a Unisys platform with our Fare Quote system – big in the Unisys world, minor in the IBM world. Everybody was happy!!
I could write a book about how the four airlines tried to ‘win’ by having the AMADEUS offices set up in their respective home countries. SAS advocated for Brussels since this was the time when we were in deep and serious negotiations with Sabena. Loads of politics and loads of promises – and threats… Finally it was decided that the Holding and Marketing companies were to be located to Madrid, the Development company to Sophia Antipolis on the French Riviera and the Operations company to Erding outside Munich.
System One was selected as the applications provider and an extensive customisation project was launched in Miami, with IBM as the System Integrator and System One, Amadeus and the four founding airlines as the project owners and participants. At its peak, the project team had more than 1000 members.
Initially the four airlines seconded approximately 80 persons to AMADEUS as its kernel. Thereafter, the AMADEUS Board gave me the instructions NOT to hire more people from the founders, but rather look for staff in the outside market.
While the huge IT project was struggling in the US, the real commercial ‘rat race’ had began on the other side of the Atlantic Ocean, in Europe, in Asia, in Africa and in South- & Central America The rat race had as its goal to attract more airlines and eventually other travel service providers. For AMADEUS to be seen as neutral vis-à-vis other airlines, The Board demanded that the CEO and his direct reports cut all their strings to the parent airlines and my employment in SAS was therefore terminated during the fall of 1987.
It was a fantastic spirit in the company with an enthusiasm and optimism that could move mountains… We were a UN in miniature with almost 40 different nationalities spread over 4-500 people – moving up to approximately 800 when I left 3.5 years later. Not so many from SAS; Hans Jorgensen, Alan Voss, Jesper Lossow, Bjarne Ströbeck were a few of the SAS-Danes on AMADEUS payroll. We were travelling the world – I did not learn many words of Spanish and I did not see my family that often. We had superb offices in the heart of Madrid – just across the road from the Bernabeu stadium.
If I had not realised earlier that my IT knowledge – with IBM 1401 and 360 as the flagships in my short programmer career – was outdated, I did have to face reality now! But, I also found that the strategy and commercial sides of the airline industry thrilled me more. Having the privilege to head the build up an organisation like AMADEUS was a God’s gift. The build up of the legal and financial structures – of which I had no clue from SAS – the human resources systems & processes, the company culture, the market- and media communication sector and the non airline side of the travel industry, were all areas where I learnt unbelievably much! My future jobs after AMADEUS proved that it had been a very good school.
Spring 1990, the AMADEUS Group structure had been finally set up, we had attracted a number of additional ‘participating carriers’ and we had implemented a few forerunners of the main system. I felt I could not add very much more and when the head-hunting company Russel-Raynolds offered me the job as CEO of Unisys in Sweden, I felt the timing was good and accepted the offer – after having convinced myself that the SAS exodus from Unisys almost 4 years earlier was not blamed on me! (In hindsight we all know that SAS is still a ‘Unisys-airline’).
It was not without sentimentality I left Madrid in November 1990 but I was pleased to be given an opportunity also to learn the ‘supplier side’ of our industry.
Another – not so pleasant – discovery in AMADEUS was that SAS – despite we Scandinavians had been told so from the days we were breast fed. – is NOT as big and well respected airline as we believed. Later on in life, this unpleasant knowledge has been confirmed many times.
UNISYS
When I joined Unisys in November 1990, it was in severe financial difficulties and was very often close to ‘file chapter 11’ in the US. The share price on the NYSE was less than 2 US$. Unisys Sweden had 800 employees and had made a loss 1989 of 10MSEK. These were the days when a small and new but aggressive company by the name of Microsoft appeared and started to compete with the giants IBM and Unisys.
Unisys is an American company – the characteristics of which I had never really been aware of. The chock was not instant, but it came rapidly. By Christmas time 1990 I understood the tough and unforgiving attitude and culture they had, where number crunching was almost more important than making the business itself.
SAS DATA was now all of a sudden one of my main customers – about which I felt somewhat uneasy. After all, I could see that many of the contracts Unisys had with SAS were signed by me! How would I be able to just change sides?? I did however solve this problem in a smooth way when I convinced the European headquarters to transfer the SAS account to Unisys-Denmark (where in fact it was when I was the head of SAS DATA, but Bjorn Boldt-Christmas wanted it transferred to the country where SAS’ Head office was). Per Voss, the Unisys Account Manager to SAS was – although Danish – reluctantly transferred Unisys-Denmark (I did later find out that he was reluctant because he made a lot of ‘per diem money’, being employed by Unisys-Sweden but living and working in Denmark. Hans-Henrik Hedegaard, my Unisys counter part in Denmark, later joined SAS and was the head of SIG (the SAS IT Group) until it was sold to CSC a couple of years ago.
One of the main reasons why I insisted on not having to deal with SAS DATA was that the new Terese project had been launched and the scope was to develop non-TPF code in-house in SAS DATA and – in other words – build a new Inventory and Departure Control System (RES and PALCO would probably be the appropriate SAS terminology) from scratch. Since SAS DATA (Bjorn Boldt-Christmas) did not want to run into any legal problems with Unisys, being accused of copying the Unisys legacy systems – SAS DATA requested a ‘clean sheet of bill’ from Unisys verifying that Terese was not a copy. We (Unisys) responded “OK, no problems – let’s just send a team of our experts to audit the design and the code and we shall happily provide you with what you want – if all is clean”. SAS DATA did not want us to audit the Terese design, just to give the requested ‘green light’ based on trust…! As a final attempt to get ‘off the hook’, it was proposed to audit a sample but give the ‘go ahead’ for everything. Our American lawyers said ‘no way’! I did understand them – the relationship was at this time somewhat sour, to say the least.
I figured out very soon that the Unisys job was nothing but a ‘clean up and turn around’ job. The industry had at that time become so used to the term ‘downsizing’ that it invented the term ‘rightsizing’… it sounded better or at least less dramatic. In our case, it was however a matter of downsizing – not only applying the ‘salami-methodology’ but really taking out big and unprofitable chunks of the organisation. Unisys also had the merge between Sperry and Burroughs as a burden with more or less duplicate product lines. The unsuccessful PC product line was terminated – almost as dramatic as Ericsson gave up its PC Line of Business in the 80’s.
Interesting and educational contrasts – AMADEUS where the name of the game was growth and build up with an enormous enthusiasm and Unisys where the name of the game was ‘take out costs’ and return to profitability – avoid nothing, the future is behind us! AMADEUS had no labour unions to fight with – Unisys was similar to SAS although with fewer and less militant unions. The complex Swedish labour law was tricky and did make redundancies difficult.
I was already in April 1992 – I had just turned 50 – approached by a British head-hunter (Heidrick & Struggles) asking if I wanted to return to the airline industry as the Chief Executive of the British Airways subsidiary Speedwing in London. John Watson – my old mate as a SITA Board member – wanted me to join BA. I remember my wife saying “if it had been Paris (I was an SAS trainee in Paris when we were newly married) the decision would probably have been made in a couple of weeks”. Now it took 18 months!
When I left AMADEUS, I had the intention to become just a ‘normal Swede’ and not living in a suitcase travelling the world. However, when the head-hunter came, I felt like a ‘sailor going ashore’ – the absence of kerosene (jet fuel) smell in my life made me want to return to ‘where I belonged’ – the airline industry.
Although the 3 years with Unisys were very hash and emotionally tough – we reduced the staff size from 800 to 290 and we changed a loss of 10MSEK to a profit of 10MSEK – I learnt a lot! This was real business – no funny money, no excuses. Very well paid with lots of extras and good bonuses, but the American leadership style was almost rude and insulting. The Swedish company did fairly well in its turn around project, so we were treated better than many others – but all the dirty and insulting expressions I unintentionally still use, were learnt from my Unisys days.
In November 1993 we packed again and returned to the ‘gipsy life’ – this time London and Chelsea became our home and this time without children.
Speedwing
Before I left Unisys, I asked a few of the ‘car experts’ for advice on which company car I should request in the UK. The answer was “every little boy has once had the dream of owning a Jaguar – and where else would it be more suitable to own one, than in the UK?” I did get one – green with leather upholstery and very beautiful to look at. It lasted for 2.5 years than I crashed into a brick wall in a London round-about. My secretary – who had heard me saying that a SAAB would have been much better – said “was that not a little too drastic just to get a SAAB instead?’. I never got a SAAB but I did have a Volvo (the first S80 delivered to the UK!!) after a few years with a real horse kick BMW.
Speedwing was a 500 people BA subsidiary with an annual turn over of UK£70M selling and delivering ‘the BA magic dust’ to the non-competing airline world. We were in the Management consultancy and IT businesses and later established an outsourcing arm for ‘business processing’ in Mumbai India.
British Airways was one of the world’s most profitable and successful airlines in the mid-90’s. It had left a painful merge between BEA and BOAC behind as well as a successful privatisation – and was now ‘the world’s favourite airline’.
Speedwing had approximately 140 active customers – most of them airlines but also a few airports and passenger- or cargo handling agents. There were few customers in Europe but players like British Midland, Ryan Air and Maersk used our hosting services for reservations and departure control (check in and load control).
One product line we had was ‘Executive lease’, i.e. we supplied high level managers for the clients – often using BA senior staff. Unlike Scanavia – the SAS management spin off – our consultants were still in their active age and very attractive in the market. As an example, when the Greek Government wanted to privatise its airline (Olympic Airways), it wanted to increase the value of the airline and asked us to manage it for them. We supplied CEO, CFO, Heads of Flt Ops, Engineering, Marketing and Catering for 2 years. We had similar arrangements in Indonesia, India, Gambia and Kenya.
The build up of the Indian outsourcing organisation was a great experience. BA wanted to benefit from the low labour costs, good infrastructure (in the urban areas) and good language skills to help achieving some of their cost reductions targets. For a number of reasons, BA did not want to brand the organisation as BA and it did not want to run the business itself. The choice was to call it World Network Services (WNS) and to ask Speedwing to run the business. We handled most of BA’s routine work from there and we sold similar services to a number of international airlines. SAS has today outsourced its passenger revenue accounting to WNS. We also diversified the business into other industries, such as insurance companies and petrol companies.
The growth was enormous and the profit was good – we were operating around the clock and we had almost 800 employees only a few years after we started.
When the business was established, a clear ‘exit strategy’ was defined as well – that was one of the reasons not to use British Airways branding. WNS was – as planned – sold a few years ago – after I’d left Speedwing – giving BA a very good return for the outfit that had grown to approximately 1500 people.
Much of our IT portfolio was based on the BA systems. When BA – and Qantas – decided to outsource its RES and DCS systems to AMADEUS in year 2000, I felt it was time to leave. IT was approximately 60% of our business and the plan was – now when BA and the airlines again were facing a downturn – also to sell the other Lines of Business. I was 58 and had promised my family to retire at 55 – “3 years over time” as my oldest daughter said.
My almost 7 years in the UK gave me yet another privilege – this time to continue the growth of an already growing business, different from my previous experience. And also to move from an American English environment to a British English. I do prefer the latter! Working in the British Airways Group was stimulating – it was my first job without any Scandinavians or Scandinavian influence. It was a culture with a sound balance between comfort and discomfort – or pressure and pleasure. No panic – no nonsense, but clear, challenging and stretched targets. When returning to Sweden in March 2000, I had already accepted a few non-executive Board positions and a few management consultancy assignments. AMADEUS also asked me to design – and staff – their organisation for the BA/QF undertaking which I did.
Non-operative assignments
Returning to ‘the Vaterland’ with the objective to gradually slow down, I found after a few years that I had failed. Although I wasn’t working 80 hours/week and constantly flying across time zones any longer, I still spent more than I had intended at work. ‘Life style’, is what some people call it – ‘difficult to say no’, is what I call it.
Since I left the BA-Speedwing job in the UK I have had a number of different Boards assignments, including the Chairmanship of two start up airlines (one Thai and one Swedish). I am still the Chairman of a small but very profitable and growing IT company providing web-based applications to ‘Destination promotion’ companies like Wonderful Copenhagen in Denmark, for instance.
Spring 2003, before and after the Iraqi war I was helping Qatar Airways (one of the world’s fastest growing airlines, now bigger than SAS if you exclude SAS domestic and Intra-Scand) to establish an IT strategy. Qatar Airways was one of Speedwing’s customers and I became a very close friend of its dynamic CEO. The last 12 months I have been assisting him in a number of strategic areas – spending 2 weeks/month in Doha and 2 weeks/month in Sweden or Thailand (Bangkok, where we have a home).
To close the loop with Thai – where I spent 4 years as the CIO in the early 70’s – I worked 8 months full time for them from October 2003 to May 2004 assisting the senior management in the areas of ‘Strategy implementation’ and ‘Network Management’ and I also conducted an ‘IT Health Check’ of the department I once was responsible to establish – very interesting.
Interesting also to work with some of the people I once recruited directly from the university – now having moved up the ranks to become senior officers of the airline. The Thai deputy I had 30 years ago had also ‘climbed the ladder’ and retired as the CEO of Thai in 2002.
Summary
AMADEUS is where I learnt to build from nothing to something big – with young and enthusiastic people from all over the world .
Unisys is where I learnt that ‘if you don’t know your numbers you are not in control’ – and how painful it is to have to say goodbye to good people.
Speedwing is where I learnt how to put the experience from my past together and harvest the investment in a life long career, plus that Brits are after all quite nice.
The start up airlines is where I learnt that the main difference between a traditional full service airline and a start up, is culture.
Qatar Airways is where I learnt that not all Muslims are members of Al Qaeda.
Thai Airways International is where I learnt to handle Government bureaucracy plus that Thailand will always remain my second home country, close to my heart.
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