Every decision we make shapes our
future and future of our organisation. We may not be aware of this because the way we manage, and control our business is obscuring our view of reality.
The bigger and more complex the company, the less competent we become, and our
business more vulnerable to even the smallest unforeseen disturbances.
Still, we continue to believe that we are in control of our business by
optimising parts of the system, summing up the results, and applying the
step-by-step approach to resolve complex nonlinear problems. And when we end up
with unexpected losses and growing travel disruptions, there is always someone
or something else to blame.
To test your competence, look at your last month’s management report and try to
answer the following questions:
- What was the impact of increased volume of traffic on airline cost, punctuality, and service quality?
- Which routes were most frequently exposed to costly disruptions and why?
- How efficient were schedule buffers at congested airports? Did they justify investments in spare aircraft capacities?
- What were the reasons behind unexpected rise in fuel and crew costs considering that there were no changes in fuel prices, traffic program, or crew counts?
- What was the impact of frequent unscheduled maintenance on crew productivity and how much they constrain each other?
- How much did external service providers contribute to the rise in disruptions and how did it affect passengers? Would it be worth offering partners more favourable contract terms in return for better care for passengers?
- How many passengers missed their connecting flights, arrived late or didn’t arrive to their destination because their flight was cancelled? What can be done to ensure that this kind situations are handled with maximum care in future.
- How many passenger compensation claims were ignored and what impact did passenger experiences shared on social media had on your company’s reputation?
What will you do about it?
If you are not sure, avoid the following thinking stereotypes for a good reason:
- You may think that a combination of high load factors, high aircraft utilisation, and expansion at congested airports are performance indicators to be proud of, without knowing that they are the causes of hidden disruption losses in cost and revenue and sunk investments that surpass the expected benefits.
- You may think that the crew shortage reported as the reason for frequent and costly delays may increase disruption risk and are considering investing in more crew. This can turn out to be a wrong decision if you didn’t consider that crew shortage could have been caused by more frequent schedule changes due to reduced stock of aircraft spare parts as a result of cost saving measures, or some other reason that haven't been fixed.
- You may think that you will increase competitiveness by reducing fares on routes where you are losing passengers, without knowing that even your most loyal customers will never come back because of the way they were treated during and after their disrupted travel and because of poor services and lack of care when they needed it most.
- You may think that you can recover hundreds of millions in disruption losses caused by ground handling company which damaged your aircraft (unserviceable for the whole week) without being aware that this is not possible because your information system is not designed to provide credible evidence of indirect disruption losses related to this event.
This is why most of the boardroom meetings look something like this:
No existing software nor the gut feeling can help you get these insights. To become a competent decision maker, you must be aware how your business is performing now, not six months or a year ago. You need to keep looking for reasons behind the real-life problems and act on resolving them before they escalate and become impossible to identify. You need to cut through complexity.
It is essential that you constantly interrogate changes and so break through organisational barriers, measure their impact case by case, combine data and insights near real time and get to the true root causes of loss-making events.
Only then you can take action with good chances to succeed. It is important to know that your goal is not perfection as in the fast-changing circumstances with complex interactions it is impossible.
The best you can do is combining data and insights when making decisions in complex context while learning from real life problems. The goal is making better decisions every time. This is how you make progress.
Experiential knowledge about how the system works is the key, together with right tools and technique.
You can find more about the next step in decision making here.
