Plane drivers

Are the pilots right?

Unions are a pain for any management, but to fire pilots for starting a union sounded extreme. Apparently, it was set off because the relations between management and pilots soured when Jet wanted to cut back on pilot pay.

However, I wasnt too comfortable with the idea of going on a pseudo strike and causing inconvenience to the general public let alone losses to Jet. But I was simply stunned when I learned that pilots make as much as 10L per month. Yes, per month. Some might make less but nothing below 3-5L. I heard Naresh Goyal on TV say that people making that kind of money shouldnt be exploiting rules intended for blue-collared workers. And that sounded logical. (Let me get this out of the way. I did feel pangs of jealousy on hearing the size of the pay packet.)

So the point is, do employees with six-figure salaries really need unions?  Such people have high intellect and specialized skill sets that cannot be easily replaced. That also means they have plenty of employment options. Their thought process is broad enough to consider the possibility of job loss and save for the rainy day (which bluecollared workers may not or even cannot). But airlines is an oligopoly, and one that is not doing too well. As it is, you have no  more than 5-6 airlines in our country with the majority of them losing money. While airlines may not be able to join hands publicly, they can still work behind the scenes to keep salaries down. A couple of years ago, our own IT companies agreed not to poach from one another, and have repeatedly stated that rising employee salaries are a concern.  Whether such moves amount to collusion or cooperation is a matter of debate.

I think the pilots are right in forming a union to maintain the power balance, but in the process have shown that they are no more than simple plane drivers. That is, they are no different from a railway motorman or a crane operator  who will find himself at sea should he be let go. It is not a skillset that can be transferred to a different industry.

Outliers and Hofstede

MBA is a great leveler. The heady excitement of macroeconomics, finance and marketing is tempered by the fatal boredom of HR and OB. And one topic that inevitably gets raised in HR and OB is the Hofstede’s Index.

Geert Hofstede, a Dutchman, profiled the behavior of people in various countries and concluded that cultural differences can be explained on a four-point scale: Power Distance, Individualism vs. Collectivism, Masculinity vs. Femininity and Uncertainty Avoidance. B-schools and academia adore such neat models and, next to Porter’s Five Forces, Hofstede’s Index has to be the most frequently used tool to explain away the failures of MNCs. It makes you sound intelligent and gets you points for class participation. Beyond that, it seemed useless. Until I read Outliers.

Gladwell’s latest book attempts to search beyond the obvious traits of successful people – that is intelligence, hard work and perseverance. They are important, he agrees, but claims there is a little something, called luck, which actually catapults them into a different league. Like his previous books, Outliers makes for interesting reading, but what made me sit up and take notice was his analysis of plane crashes.

Here is a chilling recount of the 1990 Colombian Avianca plane crash in New York. The aircraft is desperately running out of fuel, but has not been given permission to land. The captain asks the first engineer to contact ATC and tell them it’s an emergency. The first officer contacts ATC, and among other things, mentions they are running out of fuel. Planes are expected to be low on fuel as they reach the destination so ATC doesn’t give this much weight. But rather inexplicably, the first engineer doesn’t push.

The situation makes no sense, until one looks at it through Hofstede’s index. Colombia is a country with relatively high power distance, where people are more respectful of authority. Hence, no questions were asked. If the first engineer was an American, Gladwell claims, the conversation would have taken a different course. Reading this sent a chill down my spine, but it seems airlines world over have recognized such manifestations of cultural differences in everyday interactions, and have taken measures to train their pilots and crew.

Jai Hofstede!