Page 5: De-layering
In common with other major UK companies in the mid 1990s, the AA has set out to create a more responsive organisation, cutting out waste and bureaucracy. This has involved removing layers of surplus management - a process known as “delayering”.
In modern business organisations, the emphasis has increasingly been on empowering front-line employees - i.e. those who deal directly with customers. Employees are encouraged to take the initiative, to solve problems themselves and to be confident in their dealings with customers. Of course, this has involved extensive training programmes to ensure that staff have the competencies and skills required to deliver quality services.
Until very recently, 80% of staff costs at the AA were in the front-line, with a substantial 20% of costs covering management. In order to reduce overhead costs to give members better value for money the AA has been involved in a major delayering programme. As a result, management levels have been reduced from 12 to three levels since 1988. As with all restructuring programmes, this has placed enormous strain on the organisation in seeking to maintain morale.
The way forward has dictated that employees understand the need for change so that they can identify their part in improving customer service excellence. In a highly competitive field, if the AA failed to deliver superior benefits, competitors would certainly do so. To this end, the AA has engaged in a major reconstruction programme, involving re-training for its employees. It has flattened its organisational structure and introduced team working and team briefings. In addition, new IT programmes have been initiated to improve customer service further. In particular, the focus today is on enabling all AA employees to serve customers effectively.