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.
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.
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.
-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.
-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.
- 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 your 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.