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Your Dog is Ugly

Posted on: September 27th, 2012 by Pete Agur

 

Evaluating Performance Management

You don’t know what you don’t know

Who’s to say that the aviation department is operating to the desired standards? And who defines and makes possible those standards? When things are going along smoothly, why question the basics? The fact is, the people most directly involved in the aviation department, including the executive to whom the department reports, may have a myopic view of what constitutes acceptable performance. It may be time to step back and re-evaluate how you’ve been grading yourself.

 

My name is John Hansen. I’m chairman and CEO of a successful Fortune 500 company. I thought I had a solid understanding of and a clear vision for all of the key operations of the company, including the aviation department. I recently learned that I was wrong. This is my story:

I was sitting in one of the comfortable leather chairs in my office suite chatting with Bill Williams, an old friend and member of my board of directors. He is a true southern gentleman and one of most caring people I know, but what he said stunned me. “John, let me tell you why I asked for some private time with you. I hate to tell you this, but your dog is ugly.”

I was taken totally off guard, for two reasons. First, I have never before heard Bill make a rude or unkind statement such as the one he has just uttered. Second, he knows I do not own a dog.

“Bill, what are you saying?”

“I know how proud you are of your airplane and crew. You routinely brag on how great they are. You’ve even been kind enough to send them to pick me up for numerous board meetings.  I have to tell you, they may not be nearly as good as you think.”

“How so?” I cautiously asked.

“John, we just spent two days with the board addressing your company’s competitive and operational strategies. One of the key points we all agreed upon was that your company will aggressively embrace Best Practices because they create great bang for the buck. We also agreed World-Class Practices are typically too expensive for their marginal gain in results, and Standard Practices are the hallmark of third-tier organizations that are typically cost driven.”

“That is all true,” I said, “but, what does that have to do with my aviation department?”

“Do you have the same performance expectations for them?” Bill asked.

“Of course,” I said. “Are you telling me they’re not as good as I think?”

“John, their performance is nowhere near Best Practices. Don’t get me wrong, though. I don’t believe it is a matter of their abilities. It has more to do with, ‘Y’all don’t know what y’all don’t know.’ ”

I began to wonder where this conversation was headed. “Please, go on,” I said warily.

“John, when you told me I would be picked up by your plane for this week’s meetings, I asked your EA, Marianne, if I could bring along a guest.  You may remember she confirmed with you it would be okay. That guest is a very good friend of mine. He is my retired director of aviation, Lee Smith. I asked Lee to come along to observe the trip and tell me if my gut feeling about your aviation department is off base. He’s sitting outside now. I’d like to bring him in to tell you what he saw.”

“Bill, this must be pretty serious if you’ve gone to all this trouble. Please, have Lee join us.”

Bill arose from his chair, went to the door, and returned with a tall, silver-haired gentleman by his side.

“John, I’d like to introduce Lee Smith. I flew in the back of his airplanes for a bunch of years. We’ve been through a lot together. To put it gently, I trust his judgment completely.”

I extended my hand in greeting and said, “Lee, I’m glad to meet you—I think. That’s high praise coming from Bill.”

“Thank you, Sir. And it is a pleasure to meet you, despite the awkward circumstances.”

 

GRADING PERFORMANCE

“Well, gentlemen,” I said, “let’s get past ‘awkward’ by clearing this up. What have you seen that makes you believe my aviation department needs to improve?”

Bill caught my attention with a wave of his hand. “John, pardon my interruption. I’d like to lay a little foundation for what Lee is about to say. Over the past two days you and the board agreed upon the basic definitions by which you would grade your company’s performance. Remember, we said the following:

“World Class provides guaranteed results through extraordinary investments in assets and effort. We all agreed that this level of performance was inefficient and inappropriate for your business and culture.

“Best Practices assures defined outcomes by being proactive. This level of performance routinely gives a high quality of result for a modest additional cost above Standard Practices.

“Standard Practices is the baseline that is defined by regulation, manufacturers, and the market. This level of performance is designed to prevent failure, and tends to be reactive in response to common variances.

“Substandard Practices constitutes the assumption of modest risk of significant variance or failure based on the desire to achieve a given result with inadequate resources or constrained efforts.

“Finally, Unacceptable Practices are those in which significant risks are deliberately taken even though the downside potential is very high or even fatal. We jokingly labeled these behaviors as those of Rampant Rhinos.

“That having been said, John, to what standard do you expect your aviation department to perform?”

I replied immediately, “To Best Practices levels or better, of course. Lee, are you going to tell me that’s not what I’m getting?”

“Yes, sir, I am,” Lee said. “But I don’t think it’s because your pilots don’t want to do better. In fact, I think you have good people doing the best they know how with what they’ve got. The problem with your department actually is common within much of business aviation. Historically, there were no effective definitions of performance levels. That prohibited the development of appropriate uniform goals and objectives, much less the definition of good measurements for gauging their achievement.”

“But my chief pilot tells me we are the best operation at the airport. Is he wrong?” I asked.

 

THE PRAIRIE DOG EFFECT: WHY PERFORMANCE MANAGEMENT IS LACKING

“Maybe not,” Lee observed. “But he may be influenced by what I call the Prairie Dog Effect. He is standing at the entrance to his own home looking as far as he can see. But that view is limited to his own village. If his house is the same as or a little better than his neighbors’, he has little reason to make further improvements. I’ve seen this happen all over the country. Until someone proves otherwise, everyone in the village can mistakenly think they are doing just fine.”

“Why hasn’t a uniform set of standards been established?” I pressed.

Lee again. “In some ways it has, but in others it has not. There is little argument that the hierarchy of performance has Safety on top, followed by Service and then Efficiency. But the degree or gradation of that performance has taken a long time coming. What contributes to the confusion is no two aviation departments have the same mission, operating environment, or corporate culture. That makes it harder to establish a single set of standards. So, aviation department managers and members tend to look around at their neighbors and give themselves ratings that, to them, appear to be reasonable. The fact is, however, they are grading on a curve. Theirs grades are based on a relative standard rather than a more appropriate absolute standard.”

“I think I understand your point,” I responded. “But, can you give me some examples?”

“Sure. I saw several things during our trip up that can make my point very well. When your crew arrived to pick us up they did a lot of things very well. But they also did a few things that indicated they don’t have a consistent philosophy of risk management.

“After they parked the aircraft a number of things had to be accomplished before departure—get the aircraft refueled, check weather for the return leg, make bathroom stops, pay for the fuel, conduct a preflight examination of the aircraft, and load us and our bags onboard. There had been a bit of delay in the trip down, so time was precious. They chose to take some shortcuts in an effort to keep ground time to a minimum.

“For instance, after they parked the aircraft the pilot and copilot both came inside to take care of things. That shortened their workflow process, but it left the aircraft open with no crewmember to monitor the running auxiliary power unit or the lad who was refueling the aircraft. Best Practice is to have a crewmember with the aircraft at all times while the APU is on, or whenever refueling is in progress. In addition, in today’s world it is also a Best Practice to close up and lock the aircraft whenever the crew must leave.”

“I think I’m getting the picture,” I said. “What else did you see?”

 

RAISING THE RISK LEVEL

“Bill asked me to sit where I could watch how the trip went. I sat in the same seat in which you usually sit—on the right side facing forward. The flight was technically acceptable. The crew didn’t mishandle the aircraft. However, they are doing a lot of things that can lead to mistakes, or raise the risk level or potential for errors or incidents.

“Some are basic. They don’t assure that one of the pilots is always looking outside during operations below 10,000 feet; they don’t double-check each other for proper settings when changing altitudes; and they aren’t using the same procedures and callouts when they swap duties. The issue isn’t that they are doing anything deliberately dangerous. They simply are operating to a set of standards we used years ago. Those old standards continue to be used by many lower-tier operators today.”

Bill leaned forward to get my attention. “John, to put it another way, it’s like you walked into a manufacturing plant before Six Sigma and all of the other quality management and organizational performance improvements that are typically applied in modern operations today. Your guys are doing the best they can based on what’s been successful for them in the past. But, they don’t know what they don’t know. Standard Practices, or preventing failure, isn’t good enough. Assuring more effective outcomes through the use of Best Practices, or better, is the norm today for high-performance operations. Of course, I’m making the assumption that is what you want.”

“You bet it is!” I declared. “Why would we want our aviation department to run on a lower standard than our business? If anything, I want them to be striving for an even higher standard. After all, flying is one of the few things we do that can actually hurt our people. If we make mistakes in our business it costs us money. But if we make mistakes in our flying, the costs are a lot more severe than money.”

Bill continued. “John, your reaction is logical. But, are you willing to pay for the difference between what you get right now and what you’ll get from a Best Practices aviation operation? Many of the benefits will be intangible or even invisible, but the increased costs will be very real.”

“I know in our business we have done a number of studies that confirmed the customer good will and profit benefits of higher quality. Is aviation different?” I asked.

 

FULLTIME TECH

Lee weighed in with his perspective. “In most ways, no. But let’s take an example. The Best Practice for the operation of a mid-sized jet like yours is to have a technician as a fulltime staff member.”

“My chief pilot has asked for one on numerous occasions,” I noted, “but the manufacturer’s service center is right here on the airport and they can do everything we need. I know it would be more convenient to have our own mechanic, but I can’t justify paying to have someone sitting around all day while the airplane is out flying. Our business is very headcount sensitive, and I don’t want to send the wrong messages. Besides, I already catch flack over the cost of our aircraft operation.”

Again, John leaned forward and lowered his voice. “Bill, hear me well, because this is critical. You need to go back to basics. Do you want an airplane?”

The question stopped me cold because it seemed absurd. I reflected on what had been said thus far, and collected my thoughts before responding. “You know we can’t run our business using only the airlines. There isn’t a local charter company with the quality and capacity we need, and the fractional option is too expensive for our profile. So, the answer is obvious. Yes.”

Bill leaned back in his chair. “If having an aviation department is essential for your business, then I take it you want to do it right. Am I correct?”

I nodded my head emphatically.

“I thought so,” Bill said, and continued. “Then let’s talk about the costs. Do Six Sigma and ISO have costs? Sure they do, as does every other quality program and system that constitutes Best Practices.

“Do those programs have a payback? You bet. But most of that payback is in savings and assurances of required customer outcomes for quality. They are a cost of doing business to the standard you and your customers expect. It is part of the price you and they are willing to pay. The same goes with business aviation Best Practices. Right now you are underinvested in your aviation department. The cost must go up because you and I don’t want to live with the risks and consequences of a lower standard, do we?”

I could feel my blood pressure rising as I replied, “Of course not. The obvious question I have for you two is, Where do we go from here? I mean, I’ve placed a lot of faith in our chief pilot and you’re telling me he hasn’t done the job.”

 

EXPECT COMMITMENT

Bill countered. “This is not necessarily all his fault. Think back to when you implemented ISO. You didn’t fire a bunch of managers because they hadn’t already implemented the ISO program. But you did tell every one of them this is where you and they were headed and you expected their full commitment. Some managers made good on that commitment and others chose to leave. The same goes for the changes you are about to make in your aviation department.

“In the past, you set the tone and your chief pilot lived with it. Now, you will point out a new set of expectations. You start the process with your personal commitment to what it takes—you match your mouth with movement. Tell your chief pilot to get an assessment of where the operations are versus Best Practices. Have him come back to you with a laundry list of what it will take to get there: capital and operating budgets, staffing levels, changes in policies and procedures, training, and anything else it will take to make it happen. Then you keep your side of the bargain by approving those recommendations. Your chief pilot should also develop ways to measure current and future performance, just like the ISO or Six Sigma programs.”

Now Lee leaned forward to get my attention. “I do need to warn you about some of the consequences of taking your aviation department to Best Practices levels,” he began. “You may be told ‘No, we can’t go’ more often because of runway lengths or fatigue countermeasures. And, as we said earlier, your costs will go up because previously you underinvested in assuring the levels of operational performance you intended.

“On the other hand, those costs may be somewhat offset by the benefits of having improved availability and a higher resale value for your aircraft,” he explained. “After all, you will now have a dedicated technician who will be taking ownership pride in its operating and cosmetic condition. But most importantly, you will sleep better each night knowing your aviation services are performing to Best Practices standards.”

I rose and offered my hand. “Gentlemen, I know this was not an easy meeting for you. I want to thank you both for having the courage of your convictions and letting me know what I didn’t know. It will make all the difference in taking the ugly out of the dog.”

So there you have it—my story. Better yet, it’s the end of the beginning of my story.

 


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