Sharp Resources Virtual Aviation Team

Solving the Critical Communication Problem

2010-07-23T11:45:00.000-07:00

Sharp Resources has teamed up with Board Advisory Services to solve the communication problem (or the lack of communication) that is causing great ideas, innovations or reports of problems not to get the desired responsible people.

The history of this project goes back to 2007. The catalyst for change was the growing legislation, worldwide, that holds executive officers and some board members personally liable for things they "should have known" but didn't. Sharp Resources, which is led by senior industry executives who have held both line and board positions in major industry organizations, began to look into the issue and found that it is true for both the good and the bad.

A senior executive is responsible to the shareholders for both profitability and governance. We found that senior executives lament they cannot hear all the good ideas from employees, just as much as they are concerned that bad acitivites do not come to light until a crisis.

Clearly executives cannot be expected to process hundreds of ideas or individual reports - we still need to digest the information and summarize it in a way they can act upon it. We needed a way to test the veracity of issues - and perhaps most importantly a way to continue dialog with the originator, even if it meant their identity had to remain anonymous throughout the process. Few, if any current systems and processes in place allow for this. It would need an anonymous conversation vehicle coupled with an artifical intelligence engine to produce viable reports, all integrated into workflow so that the right reports go to the right people.

How many of us remember the GE "Workout" process where a senior executive sat in a room of employees and over the course of 30 - 45 minutes had 60 seconds to decide yes or no to employee ideas. It was very effective, but why did it get to this in the first place? We all know how organizational issues restrict the flow of ideas and information - it is a by-product of everyone being busy in a complex organization. It's nothing sinister, but we need to get beyond it.

One CEO recently commented - "I wish I could find out what they really want to tell me when I visit the cafeteria".

We're developing a solution for just that and we need your help. Please post ideas to the blog, attend our free webinars or comment on the Aviation Integrity group on LinkedIn.

Project Effectiveness

2010-04-07T10:23:00.001-07:00

We've been undertaking a study of project risk in airlines and airport projects. Not unusual you might say, however we're not looking at the specific risks of given projects - rather the nature of identifying systemic risks and how to identify them while you're in the project.

One of our findings is that the reporting chain from project members up to the project sponsor is a key cause of information not getting up to the sponsor. A process inhibiting exactly what it was designed to do! You're not shocked? No, we've all been there haven't we.

When looking at the phenomenon more closely, we found it has very little to do with wrong doing - intentionally hiding critical information. Most often, it's the summary reports and project reviews themselves that limit the effectiveness of risk assessment.

In one very clear case, we found a project review included twelve groups - and this was a very well-managed project. Each group understood their tasks, deliverable and due dates, dependencies of work among participants and the overall plan. However if one group was behind their own schedule, they didn't report it because they 'knew' another group in the chain would be hitting a delay and they'd have more time. What happened in this project was that when the final deliverable was going to be over 6 months late, a project audit found out that over 180 items was behind schedule and each of the 12 groups had significant delays.

We're working to develop a method to get objective reports from the entire project staff and help reduce this phenomenon substantially. We would be interested in any of your views?

Southwest - Frontier! What an Opportunity!

2009-08-06T19:32:00.001-07:00

It is amusing to read the financial analysts take on the proposed buyout of Frontier Airlines by Southwest Airlines Co.. Even the pundits in the industry are hampered by the same lack of vision that the traditional carriers hold.

When I heard the news, my reaction was 'about time'. Partly selfishly of course with Southwest being my preferred US carrier and Frontier being a key link from my home to Denver. But there's more to this than meets the eye.

Southwest has never bought airlines to gain market share - they create their own market and always have. The closest to a me-too was the Morris Air acquisition. And would Southwest like to topple United? I'm not sure they care, so long as there is growth in their business model. They certainly won't want to fly Denver Tokyo, and quite frankly may eliminate Frontiers few international routes in favor of a Mexican low-cost carrier with whom they could partner (like the Westjet model in Canada).

You can look at this financially of course - the cost to access key gates at major airports that Frontier has is probably more than the entire cost of buying Frontier. They will get good prices for the A319 and A318s in Frontier's fleet. I would not be surprised if established carriers at current Frontier cities might be concerned - Atlanta perhaps?

When Frontier restarted a few years back, they were great. I became a top flier quickly and enjoyed their can do attitude. In the last four years they've gone so far downhill that I avoid them - even flying to Denver on United.

Overall, great business strategy for Southwest, great for travellers in and out of Denver. It just means that a few more of my trips will now operate on time.

Just Culture

2009-07-30T03:37:00.000-07:00

It appears that the FAA is moving towards Just Culture at least as far as ATC is concerned. Hopefully this shift in Safety Culture will apply to all segments of the industry. However, it seems there is confusion about Just Culture non-blame and non-punitive aspects.
It does not mean if I report it I can get away with it. It was never meant to relieve people from their personal responsibility. It is meant to encourage people to report problems which are related to the organisation and the management system without fearing retribution, and it actually works.
There are several reasons why procedurers may not work, the most common is it was not communicated to everyone properly (training issue) or it could just be a bad procedure (wrong information, not effective, badly written etc..).

Just Culture will require extensive training at all levels for the cultural shift to happen. Mandating SMS (of which Just Culture is a part) will definitely help.

This will throw some light on the subject http://www.flightsafety.org/gain/just_culture.pdf

Transition from a Technical to a Management Position

2009-07-19T05:46:00.000-07:00

This is a tough transition for all, I think the most important step one has to take is to move from micro managing a technical issue to macro managing the same issue. One needs to look at the big picture. One needs to restrain oneself from jumping in and fixing a problem for the team. How do you do that, listen to your team and to your peers, communicate what you want and need clearly and most importantly don't feel shy, it is your job. Most of all the team looks up to you to provide leadership and focus, to translate the company vision into a reality for them.

Having read a lot of management books since 1985, an individual's management style is the byproduct of his experiences both successes and failures alike (failures mainly, always look for the lesson learnt, and remember it). One has to find his own management legs so to speake.

Just be sensible, listen and communicate and enjoy the ride, you are in for the time of your life.

Auditing Suppliers

2009-07-15T20:40:00.000-07:00

There are several types of suppliers in aviation (Service Providers, Parts Suppliers and Suppliers). The requirement to audit them is mandated by regulation. Basically, they should be an extension of one’s quality, safety and security requiements and processes.

In general all maintenance organisations are more or less certified and approved to the same standards. An operator's job is to make sure that they comply with the regulations and quality standards and where there are deficiencies bridge the gap.

As for aircraft parts suppliers and with the problem of Suspected Unapproved Parts (SUP), the main thing is “Know Your Suppliers” if the trust is there the job is much easier. SUP by definition may be a problem of lack of the correct paperwork or an actual replica. Proper certification paperwork is essential.

On the whole aviation maybe the easier sector when it comes to auditing because of the amount of regulations governing all its aspects

Safety and Production

2009-07-11T06:50:00.000-07:00

Safety is a cultural issue and is an intuitive action in our personal life (crossing streets, driving, working at home etc...) which we tend to totally suppress when it comes to the workplace because we are busy doing something else (production). And of course it does not help much when senior management is more interested in production than its commitment to Safety (quality and trainning rank in the same category). Well as the saying goes if you think Safety is expensive, try the cost of an accident. Safety and Production are not necessarily at odds, and safety can be translated into production (less accidents, incidents, work stoppages etc..).
Safety Management System (SMS) is mandated across the aviation sectors in most countries whith remaining following within a few years. This is a traditionally "Safety" oriented industry but SMS formalises functions like risk assesments and mitigation and safety objectives, requiring a culture adjustment within the organisation. It will be very interesting to follow the implemetation of SMS and the organisational culture changes.

Going GREEN again

2009-07-06T19:57:00.000-07:00

Discussion question on the Group Green on LinkedIn, "Is Man-Made Global Warming Real? - The Number of Skeptics is Swelling - Many Scientists Beg to Differ..." posted 3 days ago generated 90 responses. These responses ranged from

Calling Man made Global Warming a religion
This is a cycle and man has no or very little contribution (Mother Nature just being bitchy)
Almost totally our fault
Spending money and imposing taxes under the Energy Bill will undermine the US economy and freedoms among other things
Others who say, well maybe it is not totally our fault but we did abuse the planet and we need to help fix it.

and on and on.

They all quoted science and media sources (of course accusations of bias were all over the place)

Well, certainly a very emotive issue and from the looks of it both sides are pretty much not budging from their respective positions (nothing new here).

Well, I am no climate change expert, all I know is we abused Mother Nature a lot in the last few decades and it is about time we do something to repair the damage and if this helps with global warming so much the better.

What amazes me that all the so called conservatives who believe we had nothing to do with global warming focus on the cost issue of the equation and refuse to acknowledge the long term effect of incentivising the current GREEN industrial base to transform it into a major segment of the economy thus expanding the opportunities for creativity and innovation and yes my dear friends making money (that can not be too bad). I suppose you have to spend money to make money, or do we all want to repeat history (steel, auto, and others) of those who failed to invest and are/were in dire straits.

Employee Sabotage

2009-07-05T07:47:00.001-07:00

In the following link is an interesting discussion on why employees sabotage their companies. Any solution to the reduction in wrongdoing is only partially addressed by systems that allow the reporting of wrongdoing - the entire approach must take a look at very large institutionalised, and personal issues.

To what extent do you feel these issues are directly addressable in preserving integrity in aviation?

http://www.sharp-resources.com/userdown/Sabotage-Workplace.pdf

The work is from: Why might some employees sabotage their companies?
Published: July 01, 2009 in Knowledge@SMU.

Compliance Culture

2009-07-02T20:27:00.000-07:00

In principle, in any organisation when you ask about the rules, the regulations or the procedures invariably you will get the correct answer, a true lip service. When that organisation walks the talk and only then a Compliance Culture exists.
It is when compliance becomes a way of thinking and a way of working, no second thoughts. As any corporate culture it is hard work, it requires training and hard work. The rules and regulations have to be explained, their value stressed (sometimes it is hard when the rule itself is not well written or defined) and most importantly the consequences of non compliance have to be explained, in terms of how it affects the person and the organisation.
A Compliance Culture does not kill creativity or innovation, considering all our actions should comply with existing rules, but rather fosters these attributes by allowing people to come out with better ways to operate and even push the envelop of compliance.

Going Green

2009-07-01T20:12:00.000-07:00

For the last few days all I heard and read was how the Energy Bill is going to hurt the consumer and how it is going to cripple the US economy and the global economy by extension.
I am no environmentalist, but if we don't believe we are living on a distressed palnet and that global warming is a reality, we must be delusional. The palnet needs fixing and it needs it now.
It is not going to be cheap, and the longer we wait the harder and more expensive it becomes. Well of course cap and trade will hurt the consumer, not the legislation but how businesses will implement it, just pass the cost to the consumer. Airlines will just do that, the same way the fuel surcharge has been added the carbon tax (and I hate the term) will be added.
Yes, let us all take the easy way and pass the cost along. This legislation should be the dawn of a Green revolution (over dramatising a little, but what the heck) the start of a cycle of innovation and creativity and transformation of the way we do things and may be the way we live. All I hear is how bio fuels are more efficient for aircraft use, but what incentive does anyone have to make bio fuels the norm and not the exception, so they are produced intelligently without starving the planet and efficiently, that their cost is lower so the consumer and the environment can benefit.
This should help us redesign things and look again at what is considered conventional wisdom in business and life, we need a different kind of wisdom a GREENER and more begnin one.
It is a whole new ball game, a new clean slate waiting for millions of innovative ideas and creative solutions that will produce a whole new industry that will provide jobs, sustainable and stable jobs.

So please stop whining on how it will hurt the consumer and think how much more it will hurt all of us if we don't do anything about it.

Aviation Integrity

2009-06-30T23:48:00.000-07:00

We've started a new LinkedIn discussion group "Aviation Integrity" and you are welcome and encouraged to join. Recent economic events threaten many people's jobs - in our industry and others. We're very focused on safety, but there are many other forms of wrongdoing - stealing, fraud, vandalism, discrimination, design shortcuts, manufacturing errors, environmental abuse, occupational hazards and the list goes on. One correspondent explained their staff were so scared of losing their jobs right now, other employees could steal in front of them and they would not say a word. This does not bode well in an industry where integrity is everything. We performed a global survey in June to determine what methods (if any) there were in place to capture information on wrongdoing anonymously, to obtain information across organizations, to find the value of such systems. The results of the survey have been published. You can read the report at http://www.sharp-resources.com/userdown/integrity.pdf

Working Harder

2009-06-26T06:16:00.000-07:00

I think we actually got into the recession in the first place because wwe tried and worked harder at all the wrong things without any regards to checks and balances whether internal or external.

The problem does not lie in the "harder" equation but more in HARDER at what. The innovation and creativity comes into play ensuring that the fundamentals of the economy and the way we approach it are sound. As in all human activities the pendlum swings to the other side with a vengance and we will put checks and balances that will invariably go way beyond what is required. Once we have defined what is it that we need to fix it then yes, by all means let us all work and try harder.

Air travel is a vital component of the global economy

2009-06-20T17:05:00.000-07:00

Air travel is a vital component of the global economy. However, to say that the airlines are being or had been subsidised by governments in various ways is only partly true
1. Government ownership does not necessarily translate into subsidy
2. Subsidy to Manufacturers is not necessarily dirctely passed to airlines
3. Export credits are not a subsidy but a financing tool
Airlines seem to be weathering this recession better than most, thanks to an oil price spike that forced the airlines to review their fleets and introduce efficiencies and of course the oil crises weeded out the weaker airlines. Governments did not bother to bail out the airlines then and I do not see why now. 2009 Q1 results have been affected but they are not worse than during the oil crisis, one might say that for some they are actually better, but then we have to see Q2 and Q3 results to see the effect of a deepening recession. The industry is very resilient and reacts quicker to changing environments. than most other sectors maybe because of the sensivity of air travel to current conditions being political (wars and conflicts), health (SARS, Avian Flu and H1N1), and economic conditions (recessions and oil prices). All these conditions affect travel demand and in certain conditions airline have no direct influence to change the conditions.
Demand is less in most areas and we are seeing deep discounting and I am sure in time we will see airlines going out of business and certain government airlines getting huge subsidies.
However, the area where governments may have to intervene is Aircraft Financing. The credit crunch is curtailing the ability of airlines to borrow to get aircraft that they may need to expand or improve their efficiencies.Governments have can offer more export credits and maybe loan guarantees. No matter what the form of subsidy it will not be more than a fraction that other sectors have recieved”

Airports and Emotions

2009-06-19T19:53:00.000-07:00

Airports for me present mixed emotions.Traveling back to see my family fills me with joy and anticipation, going back after being with my family I am filled with a tinge of saddness. Going on business thereis always that excitement of what to come, how would it go, what kind of adventure awaits me. I enjoy observing people and wondering what is behind the smile or the tears, transiting an airport gives that sense of detachment of being alone randomly observing people sometime not more for a few seconds but always in awe of the human capacity for joy, love, saddness, loneliness and many other emotions that pass by so fast. And when I am bored I watch how well or bad services are provided to customers by motivated and disinterested staff. I watch the ability of people to totally ignore their customers who are a few feet about them. Airports are learning experiences mostly about me then the multi national multitudes

Strategic Planning in a changing world

2009-06-18T20:20:00.000-07:00

Strategic planning hinges on the VISION provided by the top. Once this VISION is communicated and understood throughout the organisation, the rest is somewhat easier. Crafting the strategy of how to fulfil the VISION becomes a more manageable task.
The biggest pitfall is when organisations require strategic planners to provide the VISION. Planners are multi tasking, innovative and some of them visionary. However their task is to map out actions and processes that will get us to that vision. Constant review of the environment(s) around us will allow timely changes to the strategy and as a result the way we conduct business.

"US airlines need to get smaller to get profitable" US Airways CEO

2009-06-11T20:39:00.000-07:00

US Airways chief says airline industry needs to get smaller to get profitable, improve service http://bit.ly/KtQD6 .
This is something I agree totally with, the industry needs to get smaller in order to grow and definitely improve service to match those in Europe, the Far East and MENA.
The Majors have slowly moved towards LCC practices to improve their cash flow with ancillary charges such as baggage, Wi-Fi and others in addition to stopping beverage and food services on shorter sectors in order to keep their tickets as low and competitive as possible.
What I disagree with is the means the industry should become smaller. He advocates consolidation and mergers and acquisitions as means to improve efficiencies. Definitely, a good merger will improve efficiencies but not necessarily services and definitely will not make the industry smaller. Consolidation and Chapter 11 were used in the last decades as means to improve the industry but unfortunately without any success, the industry has failed to reinvent itself or transform its markets in spite of several opportunities such as 9/11, SARS, Avian Flu, 150 USD barrel of oil, the worst recession since the 1930s and now H1N1.
As the recession deepens and traffic figure take a nose dive, measures put in place last year during the oil price crisis are losing steam. The recession and the rising oil prices (70 USD a barrel) will start a new spiral of ailing and failing airlines. No Chapter 11 please, allow them to fail, this is the only means of removing capacity from the market. The effect of a failing Major Airline will not be as catastrophic as we all think.
Unemployment is the primary concern, however we are starting to hear about impending layoffs. The net effect on unemployment will be minimal as carriers pick up capacity in the affected hubs in order to capitalise on available traffic. The other issue would be aircraft availability and prices, as traffic nosedived, carriers as usual brought in their older, less efficient, less green but smaller aircraft in order to reduce capacity to match demand. The plans to retire these older aircraft get shelved every time traffic slows down. It is about time MD80s and older B737s get retired, and newer and more efficient greener aircraft come into service. That will bolster sagging aircraft lease rates and reduce carbon dioxide footprints and hopefully the Emission Trading System (ETS) charges that will be added to our tickets in the near future.
It has been said often, that we should not waste a good crisis, so far we have wasted every crisis, let us not waste this one to reinvent the industry.

Ethical Questions related to On Board Broad band

2009-06-08T23:07:00.000-07:00

Connectivity in the sky is coming whether we like it or not and it is going to be at a very affordable price and in all classes of travel. This will raise questions some ethical like connecting to questionable sites like porn or extremist organisations which could be viewed by someone sitting close by to the use of audio and voice.

Audio does not pause much of a problem since most people use audio devices like MP3 and iPods in flight. That brings up the issue of voice, currently airlines have a handset at every seat for making satcom calls and the only reason no one uses the service is cost. As costs are rduced and fees become lower wheteher one uses the handset provided by the airline or their own mobile unit becomes irrelevant. Voice was and is an issue that has been with us for years but no one had to address it because it was not used extensively if at all.

Airlines should start thinking seriously of a solution to a problem that has been dormant for years. Maybe the solution in providing every passenger with a top of the range noise cancelling head set.

Affordable connectivity will pause problems, however how big of a problem, no one knows until these services are extensively used.

Will We Ever Get Back to Normal?

2009-04-30T23:15:00.000-07:00

The economy is treacherous and the outlook for the near future is not so bright. The aviation industry has bright spots but there are few celebrations. News reports flood in with rare signs of improvement. It’s tempting to wonder – will we ever get back to normal? In a recent survey by Sharp Resources, Inc, 83% of respondents in aviation indicated that this recession will fundamentally change the way we design organizations. Only 8% believed there would be no change with the rest believing some change will occur. Why such a dramatic result? Economic historians point out that after severe recessions, a fundamental change in the structure of how we organize ourselves occurs. Consider the change from farm to factory. Prior to the industrial revolution most people were independently employed – growing food, hunting or caring for their families. The industrial revolution attracted people to the new cities in droves with the promise of better jobs and the ability to buy what they used to grow or make. As time progressed through economic ups and downs, companies became pseudo-families in their own right – providing lifetime employment, benefits and a solid retirement. Perhaps the biggest thrust toward that model followed the 1929 crash and depression. In recent years, companies have been divesting employees of benefits. The trend started in earnest in the 1980’s and has since been accelerated by off-shoring and outsourcing. Lifetime employment is very rare and most jobs last an average of only five years. Additionally, the recession following September 11th, 2001, had a ‘jobless’ recovery where the economy recovered but employment did not come close. Economists predict the 2010 recovery will be substantially jobless again. The official US unemployment rate hovers around 8%, but when the best estimates of under-employment and people no longer bothering to seek jobs are included, that number is 15.5%. So, will we ever get back to normal? I suggest the answer is an emphatic “no” and it’s a good thing too. The implication for people in the work place is immediate. We need to develop ourselves as Me, Inc. This is not a new concept – career coaches have been espousing it for over twenty years. What has changed is that we no longer confine marketing ourselves to within a company – we all plan, from the day we leave school, to be self-employed at some point, and to be ready and able to move between freelance and corporate jobs as the market dictates. Aviation will, or should move this way too. Our choice of career will modify the extent to which this is true. If our chosen career is a pilot, then there is only one type of job. However we may move among employers and contract buyers throughout our career. This will become the more stable type of role. It is a core activity. For those in non-core activities, careers from now on will be individual, moving from employer to freelance and back. So we are moving back to the pre industrial revolution model of freelancers (although we only need move back to the country for lifestyle reasons). Thanks to modern technologies we can do our work from almost anywhere – and here is the enabler, as big a change to industry as the introduction of the aeroplane itself. If we do not go back to ‘normal’, then how will people cope with the new work marketplace? Social networks become more critical than ever. There are internet-based solutions developing that will allow anything from building a business network (eg LinkedIn.com) to complete marketplaces where freelancers and project buyers make a match (eg ki-work.com). The age of the virtual freelancer and virtual freelance teams is finally here. These teams contain some of the most talented individuals in the industry and they work for the very companies that used to employ them. No wonder that 83% of the survey respondents believe the current recession will make dramatic changes in the way we organize work.

Closure of the Pogo Air Taxi Idea

2009-04-19T23:26:00.000-07:00

I'm always amazed by the clarity of vision of my old boss, Robert Crandall. The following news item appeared in Aviation Week, April 16 written by William Garvey. Note that Bob Crandall lists two issues above all - an airplane that couldn't; financing that dried up. There were many other issues but note the clarity of purpose in his remarks. Now - there is some very encouraging news in his comments. We are going to see a lot of alternative models emerge in aviation.

What I find interesting is that for the past thirty years, there has not been much change. Technology has marched on - the A380 is a sea change from the 707/VC10 era. However, the only fundamental change in the airline model in this timeframe is Southwest (and Ryan, easyJet, GOL etc). Business aviation remains the same, private aviation has seen little change. So how can Crandall claim there will be a lot of alternative models?

I believe the answer lies in two areas. (1) flights scheduled by travel companies that aggregate demand in realtime and 'charter' aircraft fit for the specific need and (2) clubs that blend the private jet industry with flexible demand to offer prices closer to the budgets of the middle class. Both of these offer real change (and many model options). Both of these are in the embryo stage and are being tried.

Item (2) was discussed in another aviation blog recently: http://www.linkedin.com/groupAnswers?viewQuestionAndAnswers=&gid=1571937&sik=1239883736371&discussionID=2566051&readyToAnswer=readyToAnswer&trk=ug_qa_usrcomm&goback=%2Eana_1571937_1239883736371_3_1

One thing I have learned well, whether you agree with Bob Crandall on a specific issue or not - never, ever discount his thoughts and predictions.

================

The News Item:

After devoting several years to market analysis, equipment evaluation, pricing structures, service areas and operational planning, Robert Crandall has decided to ground Pogo, his start up very light jet charter operation, before it ever left the ground. He says he's returning what remains of the operation's seed money to investors.

"I feel badly about it," he said April 15 of the decision. "It's just one of those ideas that didn't work out."

Although Pogo was usually described as an "air taxi," Crandall dismissed that label, saying, "I don't know what that means." Rather, he described the intended service as a typical FAR135 charter operation using small jets with trips confined to the northeastern United States. The group had considered several jets, but seemed finally to settle on the Eclipse 500, primarily for its low acquisition and operating costs. However, Eclipse declared bankruptcy earlier this year after delivering fewer than 300 aircraft.

"Two things did us in," Crandall said. "First, the airplane never got built, and in fact the company went bankrupt. The aircraft still can't operate in icing conditions. So the airplane failed. And while we could conceivably use alternate airplanes, that wouldn't have provided as great a price advantage versus existing alternatives. And secondly, you can't finance anything new these days, especially in aviation."

He estimated a need for $80 million for Pogo to begin operations and said he was in New York pursuing financing the day Bear Stearns failed - "Nice timing," he noted.

Even though he is exiting the market, the former American Airlines chief predicted, "You're going to see a lot of alternative models emerge in aviation" because with the continuing contraction of airline service, "it's getting harder and harder to go from Point A to B in the United States."

"There is a market out there for alterative models that will save people time," he said, but added he's unlikely to be the provider. "My guess is it's going to take quite a long time for the market to recover. If it takes ten years, I'll be 83. So maybe I'd try again, but that's beginning to push the envelope."

Interesting Rebuttal to US Airways CEO Comments

2009-04-13T07:01:00.000-07:00

I found this rebuttal entertaining. The customer is the enemy! Perhaps airlines would be far better off without them?

Credit: This rebuttal was published in Aviation Daily, Friday April 10th, 2009.

I was amazed by many of Doug Parker’s media day comments. (March 25) He began with standard industry observations on the past and the need for change. But by paragraph seven (“I know what you are thinking—I am nuts.”) I began to believe that his assertion might be true. Arguing that for many years market domination, rather than sustainable profit, was a driving force, he then promotes consolidation, premised on the idea that larger—and hence more dominant—carriers are a panacea. Help me if I am misreading, but that sounds like a position that equates success with market share. Furthermore, like almost all legacy managers, he ignored the fact that there is minimally, one U.S. carrier that has for years operated quite well in a fragmented market.

He then tackled labor relations—an area of first-hand experience given that years following the merger “completion” his company still has outstanding labor issues. I agree that the ingrained boom and bust mentality clearly is untenable. But the idea that management has unilateral power to change the situation strikes as patronizing and the playing field far from level. While management is quick to “adjust” employment and wages, it has been far less willing to curb its own compensation and perks in a similar way. And there is no hint as to just how management might resist demands for better terms in good times. Unfortunately, as long as these groups perceive each other as antagonists, there will be little progress. Both factions need to relearn that everyone at every airline is tied to its long-term success, and should share equally in profit and loss.

The real meat however, comes in the discussion of service and frequent flyer programs. The service aspect is especially intriguing since U.S. legacy carriers have been regularly pilloried for indifferent, and even rude, service. Social media sites reveal that passengers are generally most upset by employees unable or unprepared to deal with everyday problems. If many reviewers cite surliness, or some variation thereof as the predominant problem, the fix is pretty evident; see that staff are better trained and friendlier. There is scant evidence that that is happening. Southwest and JetBlue have not won customer satisfaction surveys because of their lavish meals but by consistently meeting the expectations of their customers. Attitude is a differentiator that resonates with the consumer.

And then miles. Unless US Airways differs markedly from its peers, it sells miles as well as seats—and quite profitably. At times some carriers have reported that this was the most profitable aspect of their operation so it’s pretty clear that airlines have done well by this strategy. To assert that any carrier’s sole benefit is a bunch of freeloaders is fantasy. Is US Airways ready to relinquish that revenue source? If so, I wish him well in his singular attempt to abolish the practice, at least more success than the airline’s failed attempt to charge for water and coffee.

Finally, while I would agree that the politics surrounding airlines can be complicated, the carriers themselves regularly play the system to their advantage. Witness the continuing hulabaloo surrounding Virgin America’s ownership. Apparently, arcane rules are only deemed absurd when one’s own ox is being gored.

Few would disagree with the idea that aviation both in the U.S. and globally badly needs new ideas and insights. As an industry vital to global commerce, it still is often treated as a local fiefdom, and regulated with disregard of the bigger picture. Until the world’s airlines and their regulators take a broader view, no company, irrespective of size, will achieve its full potential. Mr. Parker’s suggestions provide little to advance that goal.

Ron Kuhlmann is an aviation analyst and former editor of the Unisys Scorecard. http://web.me.com/ronkuhlmann/Site/Welcome.html

Time to Think Differently

2009-04-03T17:43:00.000-07:00

"This is the moment for business to think different and think big. The great dying off of quintessential 20th century business presents vast opportunity for entrepreneurs. And so as some of the huge, dominant, old-growth trees of our economic forest fall, the seedlings and saplings - that is, the people burning to produce and sell new kinds of transportation and media in new, economic ways - will have a clearer field in which to grow." Time, April 6th, 2009, Vol 173, No 13, "The End of Excess."

"...management, at its best, is an intelligent response to outside forces, often disruptive ones. Times of severe economic duress, management experts say, can serve to sharply accelerate trends already under way." New York Times, March 20, 2009, "How Crisis Shapes the Corporate Model."

At a time when stories of gloom, failure and despair seem to dominate the landscape, there are an increasing number of voices that see this challenge as a seminal moment in which longstanding and outmoded business models and practices will be either radically reformed or completely replaced. To paraphrase an old adage, nothing focuses an organization more than its possible demise. And in the present environment, there can be little doubt that such an outcome is a real possibility for corporations and organizations across the full spectrum of human endeavor.

Globally, the focus of late has been on cost reduction. No one would discount the idea that cost containment remains a vital component of corporate success. Unfortunately, the drive to reduce cost has all too often also involved the removal of employees with the expertise necessary to sustain a culture of excellence. We have all encountered the customer service representative who is clearly reading from a script, with limited product knowledge and even less authority to deal with difficult situations.

But simple longevity at an organization does not ensure quality. That is supplied by employees who are passionate in their expertise, who bring a level of competence and experience that can be neither scripted or taught. Such persons also supply perspectives that cannot be imparted by recent hires who often have little investment in the corporate ethos.

Given those realities, organizations are increasingly seeking assistance and guidance from external entities. Consultancy has exploded as ever-more tasks are ceded to third parties. However, too often the reality has failed to reflect the promise and both time and money are invested in ways that provide scant return - and very often fail to solve the initial problem. As indicated by the opening quotes, the time for disruptive change is at hand. It is time to find new ways of accessing those pools of expertise in a targeted and cost-effective way.

As with much else in our current environment, the Internet and its extraordinary ability to link the world, will play a vital role. Virtual teams, comprised of members with specific and vital skills can be assembled in a flexible and cost-efficient way that supercedes and improves on the classic consultancies that have fixed locations and employee resources. The billings of virtual teams are devoid of overhead and fixed costs that are inherent in the traditional model and the teams are chosen, not from a limited cadre of employees, but from a broad-based pool of experts that can be specifically configured to meet the needs and challenges of each assignment.

This is an idea whose time has come with the potential to provide targeted, cost-efficient assistance and solutions across a full spectrum of demand.

Commencement Speech

2009-02-20T15:12:00.000-08:00

Welcome!

This blog is intended for independent aviation consultants to join forces to win bigger deals and to share ideas or questions with others in the business.

The aerospace and aviation industry is a primary driver of economic development. Finding ways to help people travel as cheaply and safely as possible will pay dividends in many ways. It will open up new markets, provide new opportunities where there were none before and - perhaps most importantly - people of different cultures will meet and learn that we're all basically the same. The commensurate reduction in cultural tension will make the world a safer place.

This blog is linked to the online global marketplace for independent consultants and freelancers - ki-work.com. Join the blog, join ki-work, join both. Let's go out and build virtual teams capable of delivering the bigger, longer term projects that provide a better return on our efforts.