Thursday, 29 November 2018

Some other excerpts from 'Beyond Airline Disruptions: Thinking and Managing Anew'

I would like to share with you some more excerpts from my book ‘Beyond airline disruptions: Thinking and managing anew’ in hope that they will inspire you to start rethinking the way you work, and discover hidden opportunities for improvement.

You won’t find lots of data and statistics in this book. This is because you already have too much of them. You will rather learn how to make sense of numbers aggregated in your company’s reports, understand where do they come from, and how to create a platform that supports decision making in complex and dynamic airline system.

I invite you to embark on this exciting journey and hope that the following excerpts will give you a better idea what this is all about:

We need to recognise that inherited management methods and information systems can no longer serve the purpose. Traditional planning and forecasting are not suitable to keep the pace with what is happening in the real world. We need to find a new way of system management that acknowledges its dynamics and interactions, and constantly balances between profit and quality. The key to managing such a system is understanding of operational changes, especially when they exceed the acceptable level built in the company’s plan and start generating additional cost and decline in service quality with longer term consequences. These changes – that we will refer to as disruptions – are the sweet spots where the results of all systems activities, for better or for worse, become visible, measurable, and their deeper origins trackable. They are the place from where we can start connecting instead of counting dots.

By making decisions based on too many assumptions, we unknowingly create more problems elsewhere and are unable to measure their impact on the system due their complexity. When we compare the planned and actual results published in company reports, we cannot say what is beyond these figures, what really happened and why, and what we need to improve. Regardless of amount of data we collect and analyse, sometimes the impact of our decisions is minor, and sometimes it can have longer-term implications on the system performance that we wouldn’t be aware of. This is because the system we are in is not designed to manage things we are facing in real life.  Complexity arises from interactions between people and processes that are the very nature of airline business, but existing information systems and management do not recognise it. Hence the detachment between strategy and operations, plans and reality.

Getting to know disruptions is the process of discovery, learning, doing and aligning with what really matters to airlines and their customers. It changes the thinking about how the system works, what doesn’t work and why. It is an insightful approach to management that brings more clarity into decision making when faced with complex system issues. It also enhances communication and collaboration between people in different departments and their understanding of dependencies and contribution to achieving the common goal.

We need to change our learned views and introduce new measures related to disruption experience. We need to look at them in a positive way – see them as a guide to reality that tells us what to improve. This is because when you learn how to get to their origins, you will see the whole new world of interconnections between employees, customers and service suppliers. They tell leaders how far the company is from the desired course, help them see people beyond numbers, see costs as a result of movement and interactions, and understand the validity of assumptions made at the top and across the organisation. In addition, getting the insight into the cultural issues will inspire ideas for improvement in the relationship with employees.

Disruptions are a systemic issue resulting from interactions of numerous internal and external influences. Knowing about disruptions is not as important as understanding their relational causes.

Without reflecting on differences between what we had planned and what actually happened and looking more deeply into avoidable causes of problems, we will not know what to improve. Wilful ignorance of disruptions eventually leads to poor service, dissatisfied passengers, higher costs and loss of revenue.

Traditionally, costs derived from financial reports are statistically distributed to business units in order to be calculable at functional levels and easy to control. As soon as the ‘budget schedule’ starts to change (normally months before the start of a new scheduling season), it triggers changes in the cost matrix, making the planned costs even less suitable for decision making. Such practice ignores the fact that costs are more than just numbers – they are non-linear, interrelated and consequently cannot be measured in a conventional way. This is why answers to questions related to true effectiveness of saving measures, route network, aircraft and hub operation, outsourced services or investment in additional resources remain not only the stumbling block for improvement in cost efficiency and operational performance, but a source of additional costs and poor service.

The main objective of a disruption information system is to empower airline managers with the knowledge about the cost of operational changes and their underlying causes and help them to understand the impact of their decisions on the overall performance including passenger experience.

The task of establishing the relationships between strategic plans, operational decisions and airline financial performance may look too complex, especially in big organisations, and may put off many managers from even trying to understand these connections. However, managing an airline effectively without this knowledge is not possible. The system that we are about to introduce is aimed at simplifying this process by enriching operational information with elements of cost and revenue. This is meant to enable airline executives to be continuously informed about the cost- and quality-critical operational issues and their origins.

By becoming more familiar with causes of disruption events, decision makers can learn about organisational, managerial, cultural, interdepartmental and a whole range of other internal issues that they would otherwise not be aware of. These insights can be more important than accurate information about the costs involved in single events.

Complexity increases the number of trivial activities, making it difficult for senior managers to recognise and focus on things that deserve their attention. They can get easily involved in ad hoc operational problems that could be resolved locally, instead of spending their valuable time more effectively by making a small number of powerful interventions that can have a massive positive impact on operational performance.

Complexity itself is not the problem – it is organisational detachment and top-down management that channels work against its natural flow. When we start thinking in a new way, we can realise that the only way to understand the workflow is to start from outside, from operational reality where the results of all activities become evident. It then depends on where we then turn our attention to. In this case, we will be
focusing on causes of hidden strategic, organisational and management issues that are continuously and consistently hindering operational performance. looking at critical variations in service delivered to passengers

EU regulation EC261 on passenger protection has passed the burden of collective negligence and wilful ignorance about the problem onto airlines. They are seen as a culprit in a highly interdependent industry in which airports, politicians and regulators also bear responsibility for the growing decline in quality of passenger services.
While it was obvious that the flawed Regulation could not improve flight punctuality and regularity, nor better protect passengers, it has most certainly incurred additional cost for airlines.

The value of disruption management is that it provides not only tangible information but also the insight into internal relationships between managers and employees, and between employees in the environment where sharing the common goal is not ingrained in the company’s culture. Applying the principles of disruption management can improve these relationships: the method brings together people from different sides of an organisation around the same real-life problems and builds up the understanding of their interconnections and how the results of their individual and collective work affect the end result. The result is improved quality. By improving quality, we reduce costs and increase revenue naturally. This is how we can make a lasting improvement without forcing organisational changes and changes in management.

We should keep reminding ourselves that in this imperfect, hard-to-manage system burdened with lots of historical baggage, it is only people who can hold things together and make it work in difficult, unknown situations. It is the people who create bridges that reach beyond departmental boundaries and beyond what they are trained to handle. This is what people can do when they are driven by a sense of togetherness and belonging and when they are inspired to work towards the same goals – the kind of culture that can be built starting with collaborative gatherings that we talked about in this book. This is how our actions can become value-aligned.