THE MANAGEMENT INTERVIEW : Rob Fyfe – Blue sky thinking behind the clouds

It’s easy to paint Rob Fyfe as one-man bad news machine. Ever since he took over as Air New Zealand CEO at the end of last year, he’s waved the company axe over pretty much everyone and everything. Engineers, marketing, human resources, finance, cleaners and ground staff. Forty years of service to Singapore gets the chop next month. And the traditional twice weekly summer flights from Christchurch to Los Angeles are now wiped for good.
The engineers won reprieve of sorts earlier this year by agreeing to some cuts in numbers and reduced conditions. Not happy bunch, you’d think. So it’s not surprising that one of them told Fyfe he was brave man to wander alone through their hangars on the eve of their new contract.
Even Fyfe’s wife got bit concerned when his planned one hour walkabout turned into five hour silence at his end of the phone.
It is, he says, incredibly important for people to see he’s prepared to go and talk directly with them and not hide behind the management structure. “I want people to see the belief in my eyes as to why we’re doing this.”
Right from the start, Fyfe has invested solid 60 to 70 percent of his time into signalling the company’s changes. Both the stress-inducing bad stuff that materially affects colleagues’ lives and why all this re-indexing against competitors will, as he puts it, buy the company chance of really positive future.
“Don’t assume,” he tells co-workers, “that what’s happening at the moment is how it will always be while I’m here.”
Fyfe calculates he’ll have finished most of his jumbo-sized interventions by the end of this year. Ongoing tinkering remains fact of the airline business which has an average of just over 30 percent of its costs locked into upwardly mobile fuel prices.
“Put that into context,” he says. “In 2004 our fuel bill was $480 million. This year it will be about $950 million. Last year we made pre-tax profit of $235 million so you can’t just go and overlay another $400 million worth of costs.”
Fuel prices, of course, vary from route to route. Anything from 18 percent on short-haul flight between Auckland to our nation’s capital, to as much as half of the total cost to fly from Auckland to Los Angeles.
It’s in these large international markets that our nation’s carrier feels the strain of its Cessna-like proportions among its king-sized competitors.
For while New Zealanders commonly view Air New Zealand as business biggie, with all the corporate clout that that entails, Fyfe quite rightly points out he’s heading up tiny airline in world terms. Our national carrier ranks 35th. That puts it between Alaska Airlines and South Africa Airlines.
Which means that any chance of out-muscling the big guys is clearly off the agenda. Fyfe reasons that Air New Zealand’s competitive edge hangs on it being faster, smarter and more nimble than the rest. “We’ve got to try new things and if they don’t work, adapt, adjust, withdraw and try something else.”
Part of his rethink focuses on the burgeoning North Asian market. In November Air New Zealand kicks off its first direct flight between Auckland and Shanghai. Longer haul stuff is on hold until 2010 when the company takes delivery of 787-900 which will be capable of reaching that bit further to Beijing.
To Fyfe’s mind, the airline’s rightful role is as the living embodiment of the Kiwi psyche: inspirational and innovative, the small guys in very large world. “It’s what we have to recreate Air New Zealand to be,” he says, “and as that comes to life we’ll create much more enriching environment for people to be part of.
“It’s so much about presenting New Zealand as tiny little country trying to have our voice and our influence on the world stage: it’s quite invigorating.”
Right from the start, Fyfe was attracted by the airline’s blended role as both champion and challenger brand. Back in New Zealand after the lion’s part of decade working in the United Kingdom, Australia and Ireland, he says he wasn’t even in the market for job when former CEO Ralph Norris came knocking on his door.
Still in his early 40s, he’d come back to his native New Zealand to “retire” – taking the kids to school, going to the beach, looking for few businesses in which to invest.
“When Ralph came tapping on my door,” he says, “it was lucky he got to me without my wife getting to him first because she would have said I’m not available.”
Keen to co-opt Fyfe onto his management team, Norris installed Fyfe as his CIO – role that Fyfe had never done before and from which he was seconded after two months into strategic review of the company. The shift into the CEO’s seat came at the end of last year. He still, he says, feels “slightly fraudulent” when described as former CIO.
Fyfe’s CV reads like who’s who of household names: National Australia Bank, Telecom and Bank of New Zealand among them. Yet he looks back at his role in the UK as managing director and chief operating officer at the lesser known market upstart ITV Digital as one of the most “energising, rewarding and fulfilling” times of his career. Much of its attraction lay in its status as challenger to the big boys.
Ditto Air New Zealand, he says, which reawakened his need to test himself at challenger brand. “Could I cut it without the big resources of the large corporate organisations?”
He’s quite serious when he says he’s never planned his career past the next move. “I always leave job rather than get enticed by new one. It’s easy to get cynical in business and I’ve always said that if I find myself getting to that stage, that’s the time to go and do something different.”
Given that none of his roles look like piece of cake, how does he manage the segue from one to the other?
He is, he says, quite comfortable at personal level with taking risk, putting himself into unfamiliar environments and testing his mettle. “I typically get to point where I think I’m losing my edge in particular role: it’s not giving me that stimulation. So it’s time to look at doing something different. I don’t look at new role in comparison to an old one. I think about the next challenge that I want to take on in my life that will help me either grow, have new experience, add value, or enrich the people I’ll be dealing with in that organisation in some way.
“In terms of the segue, I need to find new opportunity that is really inspiring and challenging because I tend to go into really tough assignments and industries I’m not familiar with. I know the first 12 to 18 months is going to be like drinking from the fire hydrant. It’s going to be so full on that it will be total immersion. It will consume me. So I have to be really confident that if I’m going to give so much of myself, it’s going to give me lot back.”
Experience in just one industry, to his mind, can be double-edged sword. For while Air New Zealand is heavily reliant on, and undoubtedly indebted to, the extensive know-how of career specialists, it can also benefit from the occasional whiff of fresh air from others unfettered by years of experience.
“You can take learnings, experience and models from one industry and say ‘I wonder why that doesn’t work here? Or why do we treat our customers this way in an airline when we treated them like this in bank or in telecoms or TV company?’
“Quite often in meeting everyone will be making whole series of assumptions about how to approach problem then someone says ‘Maybe we shouldn’t be trying to answer this from the perspective of an airline’.”
To that end, Fyfe has stocked his top management team with mix of long-timers and relative newcomers. His head of short-haul airline has been in the airline business for 37 years; the chief financial officer with the company for 15; the chief pilot “his whole career”; while the head of engineering is “an airline person through and through”.
On the other “newer” side of the equation now sit the heads of international airline, HR and PR. Plus, of course, Fyfe.
Coaching an organisation of