Letter to stakeholders

The ability to learn and change faster than your competitors may be the only sustainable competitive advantage.
(Philip Kotler)

It’s spelled “crisis”, it’s pronounced “complexity”

The density of change factors in air transportation over the last 5-10 years has been greater than in the previous 50 years. There is little doubt that over the next 5 years we will be involved in further deep changes. Being immersed in a context marked by change events, often disruptive and increasingly frequent and invasive, is an undeniable shared experience. Less frequent is the managerial awareness about these disruptions requiring a significantly greater effort of interpretation and an ability to respond and adapt than in the recent past.
A crisis is the way reality claims a need for change. Rather than affecting the whole economy, a crisis only involves those sectors countinuously basing their development expectations on a closed and self-referential vision of choices and decisions.

The Values, complexity reducers

In facing such changes, disrupting our old points of reference, we all look for something helping manage this complexity. Otherwise, being rooted in the Values, we avoid to give prepared and ready-made answers and we deploy critical thinking and free choice. These beliefs have led us to the launch of a new Ethical System in 2015.
Not merely updating the previous “Code of Ethics”, The Ethical System launched a new phase where rules of conduct combine with “frameworks of meaning”: the Ethical Vision and the Values.
Our aim is to build up trust between our partners and us and challenge the conformism, opportunism and resignation often sounding as the only and inevitable consequences of crisis.

Ethics enable a dynamic and shared reading of reality

Currently, we have started to disseminate Values throughout the company, but it is important to reflect on the meaning and the role we want to give them, to define them as they are: real managerial and organizational tools.
Two distinct decision-making and behavioural frameworks have taken the place of the Code of Ethics adopted 15 years ago.
On one hand there is a Code of Conduct, drawing the distinction between appropriate and unacceptable behaviours, laying in the field of formal legitimisation of actions. Whatever is covered in the Code of Conduct refers to the distinction between what is correct and what is not, as required by law.
The Code of Conduct just needs to be followed. The source of inspiration of its rules is not the company, but the legislative system. Company acts as a “transmission belt” to employees, thus not suffering the consequences in case of non compliance.
On the other hand, there is the Ethical System, which includes the Values.
Nobody imposed us the nine values of Diamond. They are the result of “internal reading” of our situation and depend on the company desire to create its own future.
Values, in turn, do not impose anything on us (and indeed they do not include disciplinary penalties, unlike the Code of Conduct rules). They suggest a path, an itinerary of cultural evolution.
Failure in following such path exposes us to just one penalty: the risk no to able to share a common language to refer to, resulting in growing fragmentation and fences being raised among different departments, fuelling internal competition in response to the pressure of external complexities.
Finally the risk to be unprepared and divided when facing problems and challenges soon requiring more shared knowledge, synergy, collective talent than put in place so far.

The path makes the result excellent

Choosing to adopt the Values we declare to be aware it is no longer enough to take responsibility for the result: to navigate complex realities we need to take responsibility for the path as well.
That inevitably implies the need to handle more variables than we were used to consider, thus meaning more time, more energies, more focus at decision-making level.
Actually there is no alternative if we want to play a scrupulous and aware role as managers.
A reality where each organization is an issue of a complex and interdependent system, heavily exposed to foreseen and unforeseen effects of its actions and decisions, no longer allows us to explain corporate value destruction by invoking “bad execution”.
Such a sophisticated context means to tip the balance of corporate responsibility in favour of the decision-making stage, that is when we more or less thoroughly analyse the scenario, we assess the interconnections between our actions and any relevant stakeholders reaction and we choose whether or not to engage in a pre-emptive confrontation with those people taking part in our activities in order to find shared solutions.

The Values are business performance “accelerators”

The Values we have adopted are a key management tool for improving decision-making quality and reducing the risk to generate underestimated or unexpected side effects, thus jeopardising the result achievement.
Then, the Values talk to us about the need to acquire a higher rationality than the mere technical-economic one.
This rationality looks to a long-term utility and brings about a transparent company, open to dialogue and confrontation, where strategic choices have a “public” effect and where profit is an indicator of correct and sound management and not a one-dimension parameter of success.

Luciano Carbone
SEA Group Chief Corporate Officer