Airlines can achieve this execution through organization redesign, and remove bias
(Image Source: Etsy)
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Octopuses are quirky, playful, and inquisitive. Some species cuddle with one another, while others have been known to bond with humans. They are among the most highly evolved invertebrates and are considered by many biologists to be the most intelligent (National Geographic).
The octopus is a marine mollusk and a member of the class Cephalopoda, more commonly called cephalopods. Cephalopoda means “head foot” in Greek, and in this class of organisms, the head and feet are merged. A ring of eight equally-long arms surround the head (National Wildlife Federation). They use their arms to "walk" on seafloor, among many other riveting functions.
The interesting behavior of an octopus is that it is goofy and resourceful. They use several different strategies to evade predators—they camouflage themselves by quickly changing their skin color, they make colorful displays or eject sticky ink to startle or confuse potential predators, they squeeze into small crevices to escape, and they quickly propel themselves through water.
While they operate alone, their MO and organization is omnipotent and multi-disciplinary. The arms (often called ‘tentacles’ even though they are technically not) function like many teams within airlines. Airline teams are much more agile and immersive around how people communicate, need each other, and solve problems than any organigram could ever show. Even simplified it doesn’t cut it (below).
Since 1962, when A.D. Chandler first coined “Structure follows Strategy”, all big consulting firms have attempted to reinvent the wheel under that concept.
In the airline industry, like many others, this has still not become a practice. Execution largely follows conventional principles. There are three historical reasons for the fact that airlines are still linear (production-style) organizations that struggle to execute servicing in new business models:
Core functions (network, schedule, flight operations, MRO) demand linear, procedural processes anchored in safety, but customers want to engage based on ‘state of mind’ and not ‘stage of the journey’ (see article).
Service-oriented functions are non-linear but use technology that is silo-based.
Business models have evolved but enterprise workflow hasn’t followed suit (e.g. omni-channel selling and servicing), creating organizational conflict.
“Structure follows Strategy” is also a very limited view in today’s context, because airline CEOs are facing five transformations happening at the same time. They are:
Digital transformation - to align people with digital work processes to serve a connected world that is omnidirectional.
Agile transformation - to meet the demands of real-time change and opportunity, requiring teams to transform to networks outside ‘boxes’.
Sustainability transformation - to realign and reinvent execution along ESG goals.
Cultural transformation - to forge common values and standards across multiple colorful generations and heed DE&I.
Stakeholder transformation - to bridge diplomacy and public policy to deal with changing expectations as well as activist investors.
All of these transformations converge and raise the all-encompassing issue of clearly redefining purpose and building modern balanced score cards (BSCs) using BI and AI with composite KPIs (article on this is forthcoming).
Oftentimes, we go blind by staring at boxes on an organigram, and shifts can be based on (political) kingdoms and popular personalities. But in terms of achieving the desired results, airlines can work better with practical and informal relations pertaining to how people really work in every day life (see article).
For example, when airline loyalty people get involved because there is a schedule change and revenue management has to bump and reaccommodate top tier customers. These are informal processes. They do not exist on paper or systems nor are they part of a digital workflow with enterprise goal-centric ‘checks’.
But when organized around end goals defined in customer satisfaction or service goals coupled with sustainable options, these functions can be better executed when they are organized together (below).
The thing is, these insights have to be generated from ingested information. This data can then become input for more sophisticated tools that use decision intelligence (AI) (see article) to drive recommendations based on the goals you give it. That is what companies like Reconfig do.
When you do the diagnosis with real people in a real company, you will find that by organizing people around a future-wise purpose based on how they actually work together to deliver it (across ‘organigram bounderies’), you are likely going to find savings of up to 32% in costs (time/effort/cost) as well. This frees up capital allocation for new enterprise initiatives.
It means: fewer silos, better execution.
Basically, “structure follows execution” once you know how the technologies and people’s skills can deliver the enterprise workflow across their current silos (Hybrid Intelligence, see article). Ultimately, this will also impact the software each department uses in favor of larger-scope commercial and customer organizations.
Below is a real picture of a facilitated organization redesign that also resulted in cost savings. Underneath are all the real and individual names.
There are tremendous benefits in working with companies, like Reconfig, that have the tools to underpin effective airline organization redesign because:
It is based on how people really work together.
It is anonymized and filters out personal bias against any person or identity.
It allows for the option to build in personality-based ‘fit’ assessments.
It helps reduce informal power and empowers CEOs and CHROs to use additional transparency beyond information filters and kingdoms.
What I like personally, is that it is easy to use, and that you can start small. It makes people feel safe and helps people to work together to achieve common goals in a way that is not obstructed by power struggles. It is also a humane way to tackle change and giving employees the opportunity to become more multi-disciplinary.
Becoming more multi-disciplinary is a big requirement for future airline teams, especially because all transformations converge. And specialists tend to resist change. Further, and ultimately, only people can design and execute how results will be delivered, with the help of modern tools, including AI.
Like the Octopus, we need to pump blood in different directions. Not from the head to the arms or the other way around. All around.
In fact, Octopuses have three functioning hearts. Two of the hearts work exclusively to move blood to the gills, while the third pumps blood through the rest of the body. Rather than iron-based blood, their blood is copper-based, which is more efficient at transporting oxygen at low temperatures and makes their blood blue in color.
So, too can airlines change in color. Emerging technologies and the upskilling of staff require organizational change. Start small, use the tools, and bring in applied organizational psychologists to guide you on the softer aspects that can be hard obstacles.
Wishing you all a wonderful day, and greetings from snowy Québec.
Montreal, Tuesday, 6 December 2022
Feel free to contact me for questions, comments, or a chat: ricardo DOT pilon AT millavia DOT com or for startup and VC assistance, ricardo AT pomonaworld DOT com.
[*] Note: A thank you to Tim de Boer at Reconfig and Dr. Alexander Swienty at Aimyca for their collaboration, input, and inspiration.