Ryanair’s Management and Creativity

In the book “Management and Creativity” (Bilton, 2007), Wilson and Cummings define strategy as two distinctive approaches; strategy as position and strategy as process. The former, also referred to as strategy as orientation, takes a more top-down approach and is concentrated around a single leader. It attempts to establish a strategic position that will serve as a basis for differentiation, which is commonly seen as original and innovative. However, a successful implementation of the strategy often requires high monitoring and a hierarchal structure.

Thus, the process itself is quite uncreative and there is little room for changes and innovation after the strategy has been established. The leader plays an important role in this strategic approach by setting vision and directing employees, and he or she is often strongly associated with the organization. Ryanair’s CEO Michael O’Leary is a great example of a leader within an orientation strategy organization. The other approach outlined by Wilson and Cummings is strategy as animation.

This adhocracy style is commonly adapted by creative organizations and the strategy is more of an evolving process than a fixed strategic position. It is built upon small, continuous changes that emerge incrementally within the organization. In difference from orientation, adhocracy takes a bottom-up approach and the strategy is developed through a collective activity. The leaders role is not to govern and direct, but to set frames, and recognize and build upon meaningful patterns. Shared goals and values hold the company together and serve as the glue in the organization.

The animation film studio Pixar serves as a great example of the adhocracy approach. Their process-oriented strategy and bottom-up approach has helped to nurture creativity and build a culture where everyone’s ideas matters and all employees are urged to speak their minds. Thus, creativity is seen as something that evolves through systems and networks, and not something that is isolated to a single leader. Posthocracy is a type of non-strategy. The style is often adapted by organizations that are subject to a lot of uncertainty and changes in their environment.

The unpredictability of the future makes it difficult for the organizations to establish a strategy beforehand and decisions are often rationalized after they have been made. This approach is based on ego, emotions and personality. 1. 1 It can be argued that Michael O’Leary follows a strategy as orientation approach. The low-cost strategy has come to define Ryanair and is deeply enrooted in the company. The attempt to reduce prices at all costs set the strategic direction. As in most orientation strategies, the company takes a top-down approach and the creativity is concentrated to the leader; the CEO Michael O’Leary.

His controversial ideas are often seen as both new and revolutionary and he continuously finds the most radical ways to reduce prices. Still, the organization itself is highly monitored and controlled as to successfully keep costs down in every part of the value chain. Furthermore, as commonly seen in these types of strategy tendencies, Michael O’Leary is strongly associated with the company. As described in the article, “O’Leary chose to embody the role of a cheap, no-nonsense, slightly unpleasant Everyman, which he would exploit to sell a cheap, slightly unpleasant flying experience to the Everyman. Arguably, M. O’Leary is Ryanair.

According to current popular theories creativity is concerned with novelty and individualism. For an idea to be considered novel, it should provide something new or a new combination of elements. The individualism concerns the originator of the idea who is seen as a “brain” who needs space and loose control to be able to flourish. The psychological theory modifies this idea by taking away the component of individualism and adding the idea of value and meaning. For an idea to be creative, the innovation also needs to be valuable and give meaning. Merely innovation is not enough.

Both the concept of innovation and the one of value is context dependent; to whom is the idea novel and to whom will it give meaning and value? According to Margaret Boden, novelty can be defined as new to the individual, H-creativity, or new to the world, P-creativity. A novel idea should be able to fit into one of these two. For an idea to give value and meaning it has to be “fit for purpose” and there will be different criterions for different situations. In a business context, a creative idea could be valuable if it improves the return on investment or if it fits with the times.

In another context, a panel of experts might decide if the innovation is valuable or not. An idea might also be defined as valuable if it has a specific intention.  Ryanair has a low-cost strategy with the vision to be “quick, efficient, affordable and safe”. Michael O’Leary is a visionary leader with “nutty” ideas that are considered radical by the rest of the airline industry. O’Leary says that in the airline business, organizations need to have a radical point of view otherwise everything will stay the same.

However, new ideas should be in line with the low cost strategy of the company. Could the Ryanair idea of removing the pockets on the back of the seats be considered creative? It decreased Ryanair’s cleaning time and thereby also the turn-around time at the airport and increased the punctuality. The idea was a new combination of elements and was new to the airline industry. It could therefore be argued to be novel. The idea was valuable for customers as it fulfilled the criterion of fitness to times: customers are more time-sensitive today and therefore values on-time flights.

O’Leary argued that it is also valuable for the customers as they are price-sensitive, they do not want to have a pleasant experience; they just want to be transported from A to B. For Ryanair, the idea is valuable as it decreases costs and improves the company’s return on investment. At Ryanair, the organizational style of change is incremental: the company is continuously improving and developing itself. One distinguishing feature of this style is that change is happening even though the company is not in a maturity state or crisis of their life cycle. This is apparent as the company has presented net profits in 9 out of 10 recent years.

The changes at Ryanair might look as radical to the rest of the airline industry, but it is in line with today’s price-sensitive society. O’Leary is boundary tweaking; he is not thinking entirely outside the box but merely “modifying the edges of the core business”. It can be questioned if Ryanair sometimes make change just for change’s sake. There is an impression that O’Leary might implement changes (or propose them) just to provoke the industry. And is cheaper always more valuable? Do customer’s still value cheap tickets if they have to stand up or pay for the toilet?