"When we make plans, we expect
that most things will respond in a linear way, that more input will get us more
output. If we want more passengers, we add more flights, fly to more airports
(even if over-congested), squeeze more seats into the plane, pack more people
in. We also want to be bigger and stronger than our competitors. The bigger we
become, the more we are inclined to ignore the critical resource limitations
and issues of quality.
In real life, however, most
things don’t respond in a linear way (quality and cost in particular). This is
why we fail to notice the critical point beyond which the quality of outcome
turns downwards. From that point on, adding more flights or having more
passengers only make things worse. This happens whenever the traditional way of
thinking and doing makes us ignorant to what is happening now, when we are
unable to understand early signals of this decline and are deluded by the
occasional rise in profit. In this way, we unknowingly increase complexity and
are later surprised by unexplainable losses, unforeseen disruptions, and loss of
reputation.
The chart below shows
dependences between growth, quality of outcome, money, and time. These
relationships are essential for understanding the current state of business and
its future prospects.
Why is it so easy to pass the turning
point without noticing it? On the surface, it is about quality and
connectedness of data and information which come from multiple sources with
different measuring and reporting criteria. By the time they reach decision
makers, these data are aggregated, then apportioned, freely interpreted, and
compared so that in the end, their value is reduced to the level that decision
become risky but with unknown consequences.
At a deeper level, however, the
problem with quality of data is related to fragmented organisation, top-down
management where decisions don’t follow the natural flow of work, and measures
of system performance that are detached from operational reality. It is also
about legacy mindset, which sees the system as stable, boxed structure, that
only trusts the official information that comes from the same sources year
after year, packed in standardised reporting formats, no matter the quality.
Analysing these data with unknown origins further distorts information,
allowing for free interpretations.
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."
This time the chances are that we may be forced to go back, closer to turning point to avoid self-destruction. This may be painful in the beginning, but then it will be up to us to decide whether we want to know or not when things start to go downwards and do something about it.
This time the chances are that we may be forced to go back, closer to turning point to avoid self-destruction. This may be painful in the beginning, but then it will be up to us to decide whether we want to know or not when things start to go downwards and do something about it.
