If we are to point to the most critical
problem airlines are facing today, it would be capability to align strategy
with operational reality. This topic regularly comes up in conversations with
airline leaders. More concretely, it is about the growing gap in communication
between leaders responsible for creating strategy, and people responsible for
its implementation. Without a shared understanding of the complexities that
arise from interactions between data, people, and processes across the
organisation, leaders cannot reach the crucial stage of connected
decision-making.
Over time, I have realised that explaining the problems this complexity creates, and ways to tackle it, is best done through experiential real-life examples, scenarios that airlines of all kinds commonly face and find easy to understand.
So in this article let’s first deconstruct the complexity of cross-functional interactions behind a disruption event. We will start with a seemingly simple real-life event, where the cause of disruption was reported as a scheduling error and dig deeper.
Learning from disruption events
A fast-growing airline was
experiencing a high and growing number of operational disruptions. Senior
executives were keen to do whatever it took to reduce the number of operational
changes, which were seen as contributing to already significant losses. The
management team decided to carry out a pilot project, to thoroughly examine
three days of disruptions caused by a single reported cause.
They wanted to know how much
this event cost the airline, how many passengers were affected, and the
underlying causes of problems hidden behind codes published in delay
reports.
The following real-life example
illustrates the scope of the disruption related problems, starting with
identifying the cost and consequences of changes in planned operations and
their impact on passengers. From there, the focus shifts to the underlying
causes up to strategic levels, all as a part of a Systemic Reality Check, the
process that will be described later in more detail.
At the beginning of the winter
schedule, several aircraft were pulled out of service by the maintenance
department due to a scheduling oversight, without notice. The overview of
direct consequences shown here is based on data collected from various sources
inside the airline.
Bringing together the data and information relevant to this event required a good understanding of cost structuring and their sources located in different parts of the organisation: some were duplicated, some didn’t match, some were inaccurate, some stored in local spreadsheets and some in local software. It took quite a time to make sense of these data, but along the way it was a great opportunity to learn about what the disconnect of cost data really means.
Collecting data related to passengers experiencing disruptions was an additional challenge, as was the information about subchartered aircraft. This said, a lot about the quality of cost data used to make decisions at all levels can be questioned, in particular those related to strategic choices. Similar applies to sources of revenue inputs.
The following is a high-level
summary of relevant data collected during the initial phase of disruption
diagnostics.
The question was: what actions could be taken after examining data of this kind to reduce costs and improve passenger experience? All too often, efforts to that end result in individuals defending their decisions and positions, blaming other people or situations. By doing this, whatever our position, we contribute to new complexities and potentially more losses that, on occasion, lead to more pay cuts, more layoffs, and more losses.
To understand what caused most
of the problems we had to dig beyond data to identify patterns that led to
disruption events, things that algorithms alone cannot provide. This was done
by talking to people involved directly or indirectly.
Communication and cultural
issues
-Lack of experienced professionals created gaps in
communication even at management levels. In the case of the example event, a
newly hired scheduling manager was left to make decisions without sufficient
support and supervision.
-Communication links, particularly between the
Scheduling, Operations, and Maintenance departments, proved
ineffective.
-The Operations Department has been granted
authority to make decisions without clear guidelines on commercial priorities.
Responsibilities were not well defined, leading to confusion about who was
responsible for what and how their decisions affected other processes.
-Inexperienced staff often resorted to
trial-and-error approaches when solving ongoing problems.
-A blame culture hindered the resolution of many
issues, as serious problems were not openly discussed with management.
-Management reporting system did not provide
sufficient information related to costly operational issues that needed wider
attention.
Network and fleet planning
Over-optimistic growth and high fleet utilisation
aimed at ensuring high aircraft productivity created lots of operational
problems and consequently poor passenger experience.
Scheduling issues
The event highlighted problems at several airports,
such as short turn times, late arrivals at airports with night curfews, and
inappropriate block times. For example, problems with turnaround times on
inbound flights from a major airport resulted in extremely low punctuality of
46% with cascading effects on other flights, compared with 76% on outbound
sectors.
Operations Control Centre
(OCC)
-Operations managers lacked awareness of commercial and other relevant priorities, which led them to set their own rules for schedule recovery. The recovery list prioritised flight cancellation as an option for delays longer than four hours. Depending on circumstances, it would also justify aircraft rentals. However, because of concerns about the high cost that may be incurred, these policies were not consistently applied. Decisions were made with hesitation, and by the time a problem was resolved, new problems would arise, exacerbating the situation.
-Numerous errors were spotted in various areas of operations and schedule planning. For instance, many crew changes happened due to the input errors and omissions made during frequent schedule changes. Additionally, the accuracy of movement messages was questionable. Much of the information about delay reasons crucial for actionable feedback was missing, more than half of reported reasons were labelled as reactionary.
-A lack of discipline in filling out voyage reports prevented access to useful insights and affected the quality of operational information. In complex operational situations, the Operations Control Centre (OCC) expected instructions from higher-level authorities, while the higher-level authorities expected recommendations from the OCC. These unresolved issues created additional pressure on operations controllers and contributed to unnecessary disruptions.
-Communication within the OCC department was poor, with individuals often using emails for communication even within the same department.
-Discussions aimed at resolving problems collectively were infrequent.
-There were issues related to the exchange of information between
Operations and Ground Services. The Ground Services team
frequently complained about the lack of timely information related to
disruptions from OCC resulting in delayed actions.
Operational information
Delay reports were regularly
distributed to top management, but contained only basic and often distorted
aggregate data, excluding travel disruptions and their true root causes.
Cancelled and diverted flights were not included, nor the number and costs of
hired replacement aircraft. Operational data input was not supervised,
resulting in inaccurate information and consequently poor decisions.
Ground operations
-The quality of service provided
by third parties at outstations was poorly managed, lacking proper supervision and
causing frequent inconvenience to passengers.
-There was a lack of control over third-party
invoicing at outstations, including expenses for hotel accommodation, meals,
and transportation during operational disruptions. These costs were fully
managed by agents without any feedback to the airline. While a refund policy
was defined, there were some implementation issues.
-The procedures outlined in the ASP (Airline
Services Procedures) Manual were not regularly updated, resulting in
inconsistent services. Moreover, the ASP was not aligned with Conditions of
Carriage Manual used by the Call Centre.
-Managers were unaware of the extent of
irregularities occurring at base airports and outstations, as well as their
impact on passengers and costs.
-Commercial priorities were not clearly specified,
leading to confusion and inconsistent decision-making.
-Communication with technical bases provided by third parties was sporadic and lacked sufficient supervision.
Passenger experience
-There was nothing to suggest the length of
passenger journey and their experience following long delays and
cancellations.
-Passenger compensation claims were ignored or
resolved with lengthy delays.
Software issues
- Available software was not used
to its full potential. People were not fully trained which created additional
problems during decision making.
Even though these insights may
look unrelated at first, the more we look at them through the lens of leaders
and specialists, the faster we will be able to grasp the T-shaped knowledge and
skills and understand the system interdependencies crucial for ensuring a
healthy growth.
While this insightful but
infrequently assembled perspective proved helpful in keeping people inspired to
create informal cross-functional channels and improve internal relationships,
the full benefits of the approach can only be realised through integrating it
into daily practice, a topic we’ll examine next.
Systemic Reality Check - a practical guide for
connected decision-making
The integrative approach to
collaborative decision-making best described as a Systemic Reality Check
fosters a transparent work culture of giving and receiving consistent feedback.
It promotes healthy communication among specialists, generalists, and people
who lead them, and encourages collective actions across many boundaries to
achieve a shared purpose. It ensures continuous, actionable feedback between
strategy and operations, no matter the level of complexity.
Systemic Reality Check inspires
a shift in management attention: from looking at sum totals and averages of
disconnected financial and operational data that only surface problem areas, to
understanding the underlying causes of things that don’t work as expected. This
is essential for assessing emerging problems and taking collective and timely
actions to narrow the gap between what we wanted to achieve and what we can
deliver, and so creating a growing community of loyal passengers.
The five-step approach shown below lays the foundation for a more adaptable, resilient organisation, conscious of complexities and its own capabilities to sustain forthcoming challenges. It shifts perception of the purpose of planning and strategy, moving the focus leaning toward emergent, context-related problems. It elevates us above limitations imposed by organisational structures and management practices, engaging collective intelligence when making decisions that require constant adjustments in a continuously changing environment.
This is the space where cross-functional issues and ambiguous information related to loss making disruptions are collectively discussed, coordinated and, whenever possible, resolved. This inspires creative dialogue that interrogates real problems, provokes learning, resolves tough issues, and promotes collaboration. It is the place to begin building a higher level of competence.
Depending
on the context, collaborative decision-making sessions can include executives,
strategic, corporate, network, fleet, schedule, commercial, operations
planners, and technology experts. It can also initiate constructive dialogues
with airports, service suppliers, and regulators. These discussions lay the
foundation for a new way of thinking, seeing problems from new perspectives,
and opening new channels of informal communication that strengthen with time.
This in turn develops the ability to anticipate problems before they happen, to
see what is coming next and get ahead of it. The result is incremental
improvement in areas that truly matter.
Back
to the real-life example described earlier. Running the regular sessions of
Systemic Reality Check would have helped discover weaknesses in communication
at early stages and initiated collective action to improve it. It would also
have helped leaders and strategists to better align their expansion plans with
airline capabilities to deliver what was expected. And if they were to decide
to do what the airline proved unable to deliver, they would have known that
they took a calculated risk against known benefits and could ensure that the
negative impact of such decisions on customers, partners, and employees was
minimal.
Once
the Systemic Reality Check becomes embedded in daily practices it can be used
to run scenarios covering different topics.
This
approach is positive as it focuses on foresights based on relevant collective
experiences that transcends organisational boundaries. It inspires open
dialogues and questions the way forward. This changes the culture from
separation and protection of departmental interests, to encouraging people to
say what they really think. Here, there is no perfection. It is about surfacing
problems before they manifest, doing things better each time, and spotting new
opportunities for improvement and growth.
Successful
outcomes of these events depend on skilled integrators, people with
multidisciplinary knowledge and diverse experiences, who are technology
literate and able to move freely between operations and senior management,
translating the requirements of each into a language and behaviour that is
acceptable to, and understandable by the others. They organise these events,
bringing people together around high impact disruption events caused by
systemic issues.
The
biggest challenge is to make discussions meaningful and avoid functional and
personal biases. What helps with this is that the whole thing is not about who
but what caused the system to underperform. Starting from indisputable facts
and insights is important for avoiding generalisation and shallow judgements.
Each
of these collaborative events results in a call to action presented in
relational action maps where interdependencies between departments and flow of
work become visible and easier to understand and revisit while measuring
progress. This process can be described as an initial phase of transition
towards a new breed of organisations where work flows naturally, and flaws are
easy to notice and act upon at early stages. Running scenarios and looking for
opportunities further amplifies the benefits of this process, paving the way
toward a truly adaptive organisation.
The
process of Systemic Reality Check inspires a culture of togetherness with
clarity of shared purpose that cannot be replicated by competitors. The goal is
to improve passenger experience at a competitive cost. In this way, we elevate
the customer experience to a new level and reduce cost-increasing practices and
so generate more revenue at lower cost. We map the way forward by leveraging
the best of what human relationships and technology can offer.
The
entire process is dependent on the use of the right technology. The innovative
role of technology is to ease the access to information resulting from numerous
interactions by visualising the results. Spotting the pain points in need of
action, and monitoring progress in such a complex context are challenges beyond
the capability of a single human mind. Current perception of the role of
technology focuses on serving individual functions. Here, the technology
company doesn’t just sell the product - the software - but service. To make the
most of technology, experts on both sides need to work together for as long as
necessary to make sure that this new integrative process works
successfully.
It’s time to embrace a fresh approach to decision making and elevate the airline's performance to new levels by cutting through complexity, reducing costs, and making flying a better experience.
Let’s start building a connected airline. It is about pioneering a new era in airline management and decision
making which is all about joint efforts.
