Strategic Planning in the Airport Industry (2009) / Chapter Skim
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The Strategic Planning Sequence P A R T 2
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For those organizations that do not have a regularized process, the need to develop a strategic plan may result from leadership change; major internal changes (e.g., a change of governing structure or dramatic staff turnover) or external changes (e.g., airline bankruptcy or consolidation triggering a decrease in aircraft operations and revenues)
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To define these potential benefits, the organization's leaders should agree upon the overall direction of the strategic plan and conduct a rapid assessment of the organization's current capabilities. This information will provide the basis for making a benefits case to support detailed strategic planning and, at the same time, educate department leaders about the strategic planning process and its potential outcomes.
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This plan should be presented in a manner that shows how the plan will answer the need for the strategic plan identified under Section 3.1 of this Guidebook and how this plan will differ from the status quo. 3.2.3 Step 3: Defend the Benefits The strategic planning team should defend the benefits of the process and show how those benefits relate specifically to the needs identified under Section 3.1.
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When people are involved in the planning process, the product of the process (i.e., the strategic plan) becomes their plan rather than your plan."9 Consequently, it is essential that the strategic planning team defend the benefits of the process and achieve buy-in from the organization's internal and external stakeholders.
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In addition, the scope of the process should be defined by determining whether communication at all levels of the organization is sufficiently open and clear to make effective use of the planning process. Finally, the scope of the process should be defined by identifying whether other issues might distract the planning team, department leaders, or senior management.
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and facility plans (master plans) that airport organizations typically prepare.
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3.4.2 Establishing a Schedule for Developing the Plan The length of the process required to complete the strategic plan and conduct the analyses depends on the following: • The organization's complexity • Whether or not the organization has completed a strategic plan in the past • Whether or not the organization has a performance measurement system in place • Whether or not the organization is actively monitoring industry trends • The level of detail desired • The number of stakeholders involved in the process • How much time the organization is willing to commit to the process • The continuity of the process (i.e., the departure of key senior leaders may slow or stop the process) • The number and frequency of meetings required, to be determined by the organization Exhibit 3-4 provides a sample of the planning activities and the sequence in which they may be conducted as part of the process.
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These elements are discussed in the following sections, and an abbreviated outline for a typical strategic plan document is provided. 28 Strategic Planning in the Airport Industry Activity Group 2 - Working Session #2 – Scan the Internal Environment Activity Group 3 - Working Session #3 – Scan the External Environment Activity Group 4 - Strategic Planning Awareness Conference Activity Group 5 - Establish Mission, Vision, and Values Activity Group 6 - External Stakeholder Workshop - Internal Stakeholder Workshop Activity Group 7 - Working Session #4 – Integrate Input from Stakeholders and Update Mission and Vision Statements Activity Group 8 - Working Session #5 – Prepare the Plan Activity Group 9 - Working Session #6 – Prepare the Plan - Working Session #7 – Discuss the Plan with Department Leaders Activity Group 10 - Working Session #8 – Revise the Plan Activity Group 11 - Approve the Plan Activity Group 1 - Establish Strategy Team - Meet with Policy Board for Approval of the Process - Working Session #1 – Discuss and Establish the Work Plan Activity Group 12 - Distribute the Plan Exhibit 3-4.
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) addresses the main method or activity through which the airport organization tries to fulfill its purpose.
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Often, objectives are more qualitative and thus more difficult to measure in the areas of employee relations and customer service. Objectives such as conducting user surveys to measure customers' wants and needs are simply measured by whether or not they are completed.
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As further discussed in Chapter 9, detailed action plans, performance measurement criteria, the monitoring and evaluation plan, and the communications plan are generally included in appendices to the strategic plan. 3.5.2 Format The format of a strategic plan can usually be determined by reviewing the size and scope of an airport's operations.
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The planning team should be responsible for developing the airport's mission, vision, and values statements; adopting generic and grand strategies and long- and short-term objectives; and communicating the plan to department leaders and staff members. The size of the strategic planning team will vary according to the size and complexity of the organization.
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in their functional strategies. Creating a Process Plan and Road Map 33 Strategic Planning Activities Recommended Participants Participate in Strategic Planning Awareness Session All Staff and Board Members/Governing Body Evaluate and Understand the Organization Core Planning Team Articulate Values, Mission, and Vision Core Planning Team and Board Members/Governing Body, with input from all staff Scan the Environment and Predict Developments Core Planning Team Analyze Critical Gaps and Reassess Vision All Staff and Board Members/Governing Body Define Generic and Grand Strategies Core Planning Team and Board Members/Governing Body Select Key Strategies Core Planning Team and Board Members/Governing Body Define and Prioritize Specific Objectives Core Planning Team and Board Members/Governing Body Select Key Performance Indicators Core Planning Team and Department Leaders Write, Communicate, and Execute the Plan Core Planning Team and Department Leaders Monitor, Evaluate, and Modify the Plan Core Planning Team and Department Leaders Table 3-1.
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Facilitating the meetings or recruiting a strategic planning facilitator 34 Strategic Planning in the Airport Industry Strategic Planning Team Established To pDo w n Ap pr oa ch Bottom -Up Approach Planning Launched Working Sessions with Internal and External Stakeholders Priorities Emerge Individual Departments Develop Plans to Address Each Priority and Define Objectives and Action Plans Stakeholders Recommend Airportwide Plans to Address Each Priority Plan Distributed to Internal and External Stakeholders Plan Out for Review Strategic Planning Team Identifies Priorities Strategic Planning Team Develops/Drafts Airport Strategic Plan Plan Adopted by the Airport Policy Board Exhibit 3-6. Top-down and bottom-up approaches.
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Reporting progress to board members/policymakers For airports with limited staff, a core planning team is not needed. Rather, the airport manager and key staff members would act as the unified team that oversees development of the strategic plan in addition to participating in developing and implementing the strategic plan.
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Deciding who should be involved in the strategic planning process, how, and when is a key strategic choice. In general, people should be involved if they have information that cannot be gained otherwise or if their participation is necessary to ensure the successful implementation of initiatives built on the analyses.11 As it may be difficult for the strategic planning team to define what is too much or too little participation in the early stages of the process, the selection of stakeholders can be approached as a sequence of choices, in which the process is initiated by an individual or small group and then others are added later as the advisability of doing so becomes apparent.12 Stakeholder groups include both internal and external stakeholders.
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The expectations of passengers and employees can also be empirically verified by surveys, focus groups, or other methods. To map stakeholder expectations, the strategic planning team should answer the following questions: • What is the stakeholder's interest in our organization?
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Unlike some airport organizations that conduct the entire strategic planning process internally, the NOAB hired two outside consultants to conduct the process. The audit and strategic planning process was executed in five phases.
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. Stakeholders will be part of the strategic planning team so that their advice and recommendations can, to the extent possible, be incorporated into the organization's strategic plan.
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The aim in developing a communications strategy is to show how the planning team will involve stakeholders so that they can contribute to and shape the organization's strategic plan. Stakeholder Information Needs.
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• Facilitators provide fair assessments of organizations. • The core planning team is freed up to get involved in the process without worrying about process issues.
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This scope should define the role of the facilitator and map out the tasks that the core planning team expects the facilitator to accomplish. This scope should include the number of meetings to be led by the facilitator and the tasks to be accomplished.
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Creating a Process Plan and Road Map 43 CASE STUDY Selecting a Strategic Planning Facilitator -- Chicago Executive Airport (Wheeling, Illinois) Chicago Executive Airport (the Airport)
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Scanning the Environment and Predicting Developments (Chapter 6) Identifying Strategic Issues, Strategies, and Long-Term Objectives (Chapter 7)
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– Enplaned passengers per departure – Enplaned passengers per gate – U.S. Customs and Border Protection arrival clearances • Financial sample statistics include, but are not limited to, the following: – Cash flow from operating activities – Operating revenue/operating expense ratio – Operating margin – Total operating revenue per enplaned passenger If relatively few individuals on the planning team have worked at the organization for an extensive length of time, consider inviting long-term/tenured staff or former employees (former airport managers, and so forth)
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revenue, government grants, and so forth (reviewing government grant statistics is particularly important for general aviation airports as they are typically dependent on government grants to fund most of their capital improvements) – Operating cost per square foot of terminal space • Market share/market presence sample statistics include, but are not limited to, the following: – Airline market shares based on enplaned passengers – Airline market shares based on cargo weight – FBO market share – Number of nonstop cities served by airlines and service frequencies on key routes – Number of outbound airline seats available (international and domestic)
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• YTD Market Share [listed by FBO] for AvGas and Jet Fuel Combined: 59.2% for Denver Jet Center; 22.9% for TAC Air; 15.8% for Signature; 1.9% for Xjet Club; and 0.1% for the Heliplex.
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48 Strategic Planning in the Airport Industry 4.3 Identifying Factors Critical to Achieving or Not Achieving Previously Set Goals By identifying the factors critical to achieving (or not achieving) goals previously identified for the organization, the planning team will be able to leverage past successes and avoid future failures as the strategic planning process progresses.
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As part of completing optional Worksheet 4.04, "Examining How the Existing Governance Structure Has Evolved," the planning team will first describe the existing governance structure of the organization, including any future changes to the structure that are currently planned and the reasons for selecting the existing governance structure. The planning team will then assess if the current governing structure has been successful in addressing the objectives for which it was created.
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4.4.2 Benefits and Drawbacks of Various Governance Structures Once the planning team has examined the existing governance structure of the organization, the team should examine the benefits and drawbacks associated with the organization's existing governance structure and any previous governance structures for the airports in the organization. The following are some commonly cited benefits and drawbacks associated with the main entities that operate and manage airports (city/county government, airport authority/ board, and private entity)
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• There is a potential for a lack of investment in facility maintenance or improvement to maintain operating profits. Once the planning team has completed its examination of the benefits and drawbacks associated with the organization's existing governance structure and any previous governance structures for the airports in the organization, the team should perform the most critical step of Worksheet 4.04: assessing the effects of the information collected in the first two steps of the worksheet regarding selection of the organization's future strategic objectives.
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• Communicate each of these statements in clear, simple, and precise language and develop buyin and support at all levels of the organization The results of the online survey strongly support the development of mission, vision, and values statements during the strategic planning process. Of the survey respondents, 84 percent indicated that vision and mission statements belong in a strategic plan and 76 percent indicated that a definition of organizational values should be included.
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Available online at www.bradleyairport.com/Management/ (accessed May 28, 2009)
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The Port of Houston Authority mission statement is a unique hybrid example that may be instructive to airport organizations, blending community economic development objectives with internal financial considerations. 54 Strategic Planning in the Airport Industry 20 GTAA Corporate Strategic Plan Summary: 2006–2007 Edition.
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, provides to the citizens of San Antonio and the traveling public safe and secure, cost-efficient, first-class facilities while providing a catalyst for economic development, fostering an environment for business growth, and ensuring an exceptional customer experience. After two sessions totaling one half-day, a new, shorter mission statement was developed: To deliver airport services that reflect the community's values, and exceed customer expectations.
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. 28 Tampa International Airport, "Vision Statement." Available online at www.tampaairport.com/about/admin istration/mission_vision.asp.
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Available online at www.sfmta.com/cms/rstrategic/documents/SFMTAStrategicPlan.pdf.
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A recent study of the corporate sector shows that almost 90 percent of companies have a written corporate values statement.35 Research on customer-driven strategic planning also shows that "best in class" organizations rely heavily on their core values to shape their actions.36 These guiding principles transcend time, market conditions, executive personalities, and planning assumptions. Therefore, both stakeholders and employees can more easily identify an airport organization's values if they are contained in a separate statement.
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, 3. Available online at www.boozallen.com/media/file/145534.pdf (accessed May 28, 2009)
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41 Lockheed Martin Corporation, "Our Values Statement." Available online at www.lockheedmartin.com/aboutus/ethics/ index.html. 42 JetBlue Airways, "Our People." Available online at www.jetblue.com/about/ourcompany/annualreport/2002/ourpeople.html
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Defining and Articulating the Organization's Mission, Vision, and Values 61 To create a values statement for an organization, complete Worksheet 5.03, "Drafting a Values Statement for Your Organization." 43 National Aeronautics and Space Administration (NASA) "NASA Core Values." Available online at http://employeeorientation.
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Section 6.1, "Internal Assessment" will help the planning team identify the internal strengths and weaknesses of their organization. Section 6.2, "External Environment Scan," focuses on the opportunities and threats presented by changes in the external environment (e.g., macroeconomic factors)
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This chapter is intended to assist the planning team with the following strategic planning elements: • Assessing the organization's internal strengths and weaknesses • Identifying the organization's external opportunities and threats • Defining competitor and peer airports • Conducting a benchmarking analysis of other airports • Developing a scenario analysis • Determining the degree to which the organization's vision is realistic • Developing strategic initiatives that account for a range of, or the most-likely, scenarios 6.1 Internal Assessment The first component of the situational analysis is the internal assessment. The internal structure, processes, and operations of the organization are assessed to identify its strengths and weaknesses.
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– Do the organization's CEO, department leaders, and managers have a clear appreciation of community interests and concerns? – Do the organization's purpose and activities meet community needs?
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Through passenger surveys and interviews, the planning team can inquire about terminal cleanliness, queue lengths, wait times, comfort, level of satisfaction with concessions, congestion, airport staff behavior, and so forth. Similarly, airport operators can gauge their employees' To assess the performance of an organization and identify its key strengths and weaknesses, complete Worksheet 6.01, "Internal Assessment." 45 Robert E
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. cBurbank-Glendale-Pasadena Airport Authority, Bob Hope Airport -- Customer Satisfaction Assessment Report, prepared by Unison Maximus Consulting Solutions in association with UCG Associates, Inc.
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Scanning the Environment and Predicting Developments 67
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Benchmarking allows the planning team to assess the organization's position relative to its peers regarding a specific factor. Later in the process, however, benchmarking can be used as a tool to set the organization's key performance indicators and targets.
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Benchmarking allows the identification of trends in the industry that the organization may decide to respond to, take advantage of, or adopt. • Define peer airports that are similar in terms of characteristics such as number of enplaned passengers, types of passengers (i.e., international versus domestic and leisure versus business)
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, service quality and customer satisfaction, retail concessions, and finance and rates and charges. These areas and sub-areas within them are listed below: • Aircraft/passenger activity – Numbers of enplaned passengers and aircraft operations – Cargo volume (handled and processed)
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– Satisfaction with processing times – Satisfaction with retail concessions (concession diversity and variety and value for money for food and beverage concessions) – Satisfaction with facilities (cleanliness, number of restrooms, availability and cost of airport parking, and complaints per enplaned passenger)
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Each airport operator should decide upon a few key measures that are critical to its benchmarking assessment. Potential focus areas that can be used to categorize benchmarking metrics include, but are not limited to, the following: • Airport operations and safety • Facilities • Productivity and efficiency • Service quality and customer satisfaction • Retail concessions • Finance and rates and charges Other comprehensive, non-airport specific, frameworks for measuring organizational performance include the Malcolm Baldrige criteria and the Kaplan and Norton criteria.
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Scanning the Environment and Predicting Developments 73 Exhibit 6-2. Baldrige National Quality Program -- criteria for performance excellence.
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Applicants for the Malcolm Baldrige National Quality Award must answer, among other questions, how the organization selects, collects, aligns, and integrates data and information for tracking daily operations and overall performance and how the organization keeps the performance measurement system current with business needs and direction. • Workforce Focus: This category is used to examine how the organization enables its workforce to develop its full potential and how the workforce is aligned with the organization's overall mission, strategy, and action plan.
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As indicated in Worksheet 6.02, "Competitor Benchmarking Analysis," criteria to be considered when deciding which airports to benchmark will depend on the area/measure being benchmarked and the different set of airports that may be associated with each area/measure to be benchmarked. Typical criteria that airport organizations account for when deciding which airports to benchmark include the following: • Location • Numbers of enplaned passengers Scanning the Environment and Predicting Developments 75 48 Baldrige National Quality Program, 2009–2010 Criteria for Performance Excellence (also referred to as the "Business/ Nonprofit Criteria")
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A large majority of airport operators will find data relative to the performances they want to benchmark in these studies. To assess which study would be the most appropriate for a particular benchmarking analysis, complete Worksheet 6.02, "Competitor Benchmarking Analysis." Two related Airport Cooperative Research Program projects, ACRP Project 01-06 "Guidebook for Developing an Airport Performance-Measurement System," and ACRP Project 01-09 "Airport Performance Indicators," are also focused on providing detailed information about available sources of airport benchmarking data.
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Studies focused on aircraft operations and safety include the following: • FAA Runway Safety Report:54 The FAA Runway Safety Report presents data related to runway safety in the United States. The report is updated every four fiscal years and highlights runway safety initiatives intended to reduce the severity, number, and rate of runway incursions.
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• International Facility Management Association, Benchmarks V:61 This survey, which includes data from airports, is designed to collect facility data that will easily allow comparison of costs and practices across various types of facilities. A study focused on productivity and efficiency is the Air Transportation Research Society's Airport Benchmarking Report: Global Standards for Airport Excellence:62 The annual global Airport Benchmarking Report is an unbiased and comprehensive assessment of airport performance that includes three volumes of productivity, efficiency, and unit cost competitiveness data.
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reporting airport revenues, expenses, and other financial information. • ACI Airport Economics Survey:68 The ACI Airport Economics Survey provides an overview of airport business activity and an analysis of economic performance based on data collected from a sample of airports representing global passenger traffic.
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. 6.2.2 Assessing External Opportunities and Threats External opportunities and threats should be analyzed as part of the external environment scan.
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This category includes the macro-level economic factors that are likely to affect airport growth. The following global economic and commodities indicators should be considered when assessing the external environment: – Inflation – Consumer confidence index – Consumer spending and income – Employment – Housing and construction markets – Manufacturing and industrial markets – Commodities data, including data on oil demand and supply trends Scanning the Environment and Predicting Developments 81 CASE STUDY Assessing Opportunities and Threats -- Houston Airport System This case study provides a tangible example of external assessment findings for an airport organization.
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When conducting a review of the environment in which they operate, airport operators should identify any anticipated public support for or opposition to the airport. • Catastrophic events.
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As previously noted, the analysis of strengths, weaknesses, opportunities, and threats faced or to be faced by the organization will help define or create the organization's competitive advantage. Examples of strengths, weaknesses, opportunities, and threats that airport organizations may identify while scanning the external environment include the following: • Strengths – The airport is well positioned to accommodate further air cargo traffic.
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, Competitor Benchmarking Analysis (Worksheet 6.02) , and External Opportunities and Threat Identification (Worksheet 6.03)
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engaged in a scenario planning exercise as part of the process of developing the most recent strategic plan for the Airport, which was completed in late 2007.a Scenario planning was conducted as part of a SWOT analysis in which the executive management team looked at competing North American airports and the potential impact of airline consolidation on operations at the Airport. An air service consultant provided the Airport's executive management team with three potential airline consolidation scenarios.
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-specific implications."75 6.3.1.2 Benefits The benefits of scenario planning are as follows: • Assessing the vulnerabilities of a given strategy and recognizing the need for clear alternative strategies • Enabling the planning team to quickly alter course in response to changes in the business environment • Providing an opportunity to rehearse potential changes in advance of the scenario occurring, thereby enabling the organization to react quickly if the scenario occurs • Changing the mental map of senior executives • Helping to align views and create a common language within a team • Helping to foster "out-of-the-box" thinking • Facilitating an ongoing strategic conversation 86 Strategic Planning in the Airport Industry Worksheet 6.05, "Scenario Planning," will help the planning team identify types of driving forces that could affect the organization's future, define potential effects on the organization, and summarize potential conditions for the organization under each scenario. 75 "Future Scenario Planning: A Powerful Top Management Tool for Strategizing," Business HR: People Practices at Work, Issue 11 (December 2004)
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Because war-gaming can be a valuable process to support planning and decision-making in the airport industry, the concept of business war-gaming and the ways that war games may help a planning team deal with future uncertainties are discussed in this section. 6.3.3.1 The Process The war game process forces a rigorous examination of a situation from several different perspectives, not just the perspective of the organization sponsoring the war game.
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6.3.3.2 Benefits and Drawbacks As noted in the Journal of the Association for Business Simulation and Experiential Learning, the benefits and drawbacks associated with war-gaming include the following:78 • Benefits – The game allows sufficient control so as to ensure internal validity while at the same time being sufficiently realistic so as to have some external validity. – The simulated environment removes the sensitivity associated with the problem area.
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. Scanning the Environment and Predicting Developments 89 Highly Probable Less Probable Probable Improbable Low Medium High Disastrous Risk Impact Risk Probability R2 R2 R1 R3 Source: Booz Allen Hamilton, Inc., May 2008.
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The concept of "generic strategies," developed by Harvard Business School Professor Michael Porter, suggests that cost leadership, differentiation, and focus (cost focus and differentiation focus) are the primary sources of an organization's competitive advantage.81 • Determine the grand strategy or strategies that the organization should adopt.
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According to Porter, these strategies -- cost leadership, differentiation, and focus (for airports this translates into both cost focus and differentiation focus) -- are the primary sources of competitive advantage.84 Exhibit 7-1 illustrates Porter's sources of competitive advantage and the resulting generic strategies.
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Southwest Airlines uses this strategy in the airline industry. Memphis International Airport is an example of an airport where a broad cost leadership strategy is practiced.
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For example, in the airline industry, Allegiant Air uses a cost focus strategy by providing nonstop service to leisure travelers in smaller markets while maintaining low operating costs. OpenSkies, a British Airways affiliate, uses a differentiation focus strategy by offering a high level of service, including an all-business class (84 seats)
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The Williams Gateway Airport Authority is also pursuing the same strategy for air cargo, as the City of Phoenix does not intend to build additional cargo facilities at Phoenix Sky Harbor International Airport. An example of an airport where a differentiation focus strategy has been adopted is Fort Worth Alliance Airport.
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The low-cost, no-frills South Terminal at Austin-Bergstrom International Airport is an example of a product development strategy. • Concentric Diversification.
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A joint venture or alliance strategy provides for some of the benefits of collaboration without the transfer of ownership or operational control. An example of this strategy is Vancouver Airport Services, the consulting practice of the Vancouver International Airport Authority, which manages an expanding network of 18 airports on three continents and provides specialized consulting services to clients worldwide.
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According to the results of the online survey, most airport strategic plans currently include four or five long-term objectives. Members of the planning team should jointly complete Worksheet 7.04, "Setting Long-Term Objectives," for each long-term objective selected.
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98 Strategic Planning in the Airport Industry • Specify and explain the strategic issues that the long-term objective will address • Describe the long-term objective, how the long-term objective addresses the strategic issues, and the challenges that might arise in implementing the long-term objective (as well as strategies for overcoming those challenges) • Critique the long-term objective against the qualities of a successful long-term objective Set an organization's long-term objectives by completing Worksheet 7.04, "Setting Long-term Objectives."
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help implement strategies in at least three ways: • Short-term objectives often "operationalize" long-term objectives. For example, if an airport's stated long-term objective is a 15-percent increase in enplaned passengers over 3 to 5 years, a specific target or objective for increasing numbers of enplaned passengers during the current and upcoming years should be set to indicate that sufficient progress is being made toward achieving the long-term objective.
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Available online at www.bradleyairport.com/Management/ (accessed May 28, 2009)
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When developing the action plan, the planning team should involve the people responsible for ensuring the accomplishment of each action in determining the resources required to accomplish the action. According to the online survey data, only about half of the respondents currently involve department leaders or their staff in assessing the resources required to accomplish each action.
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In completing Step 3 of the worksheet, the planning team will do the following: • Describe the short-term objective to which the action plan applies and • Formulate the action plan by filling out a chart that contains the contents of the action plan. Formulate an action plan by completing Step 3 of Worksheet 8.01, "Formulating Short-Term Objectives and Creating Action Plans." 95 Ibid.
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As suggested by the responses to the online survey, strategic plans vary in content and design, but the written document generally provides a summary of the analyses and includes a description of the organization's strategies and objectives. The planning team should note that the main C H A P T E R 9 Writing, Communicating, and Executing the Plan Creating a Process Plan and Road Map (Chapter 3)
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Internally, a strategic plan can be used to communicate the organization's vision, strategies, and objectives to staff and assert the importance of their contribution to the organization's overall performance. The goal is to unite staff and department leaders with a set of common goals on which they can act every day.
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To Be Included in: Internal Stakeholders Element The Body of the Plan Appendices Frontline Employees Department Leaders Policy Board Senior Management Team (CEO or Equivalent) External Stakeholders CEO's Foreword/Letter/Introduction X X X X X X Operating Environment and Organizational Description X X X X X X State of the Aviation/Airport Industry and Future Trends X X X X X X Mission Statement X X X X X X Vision Statement X X X X X X Values Statement X X X X X X Mandates X X X X X X Environmental Scan/Strategic Analysis Data X X X Strategic Issues X X X X X X Grand and Generic Strategies X X X X X X Long-term Objectives X X X X X X Short-term Objectives X X X X X X Action and Resources Allocation Plan X X X X Key Performance Indicators and Targets X X X Monitoring and Evaluation Plan X X X Communication Plan X X Source: Online Survey, Focus Groups, Ricondo & Associates, Inc., May 2008.
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If not, progress toward attaining a desired future will stall. DEFINE INTERNAL STAKEHOLDERS ROLES AND RESPONSIBILITIES SELECT KEY PERFORMANCE INDICATORS AND TARGETS IMPLEMENT REWARDS/INCENTIVES PROGRAMS AND DEFINE/DEVELOP A TRAINING AND DEVELOPMENT PROGRAM DESIRED RESULTS THAT WILL LEAD TO REALIZATION OF THE ORGANIZATION'S VISION Exhibit 9-1.
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To ensure proper implementation of the plan, a training and development program may have to be developed. Respondents to the online survey indicated that execution of the tasks and goals set forth in the strategic plan can be ensured by the following: • Measuring key performance indicators and targets (41 percent)
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9.4.2 Pairing Short-Term Objectives with Key Performance Indicators and Targets Airport management should monitor its progress toward achieving specific short-term objectives by pairing them with appropriate key performance indicators. These performance indicators can include both quantitative and qualitative measures.
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Other basic techniques used to collect internal performance data include existing records and reports, observation of individual and group performance, focus groups, and interviews with individuals. Attract New Airlines Reduce Operating Costs Maintain Competitive Airline Rates and Charges Labor and Contractual Expenses Number of Employees per Enplaned Passenger Workers' Compensation Expenses Airline Cost per Enplaned Passenger Non-aeronautical Revenue as a Percentage of Operating Revenue Objectives Key Performance Indicators Strategy Exhibit 9-3.
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and strategic targets with regard to performance measurements. As indicated before, performance management techniques available to airport organizations are further discussed in ACRP Project 01-06, "Guidebook for Developing an Airport PerformanceMeasurement System." 9.4.3.1 Survey Surveys are a simple but effective way to measure performance.
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"Originally developed as a framework to measure private industry nonfinancial performance, Balanced Scorecard systems are equally applicable to public sector organizations, but only after changes are made to account for the government mission and mandates, not profitability, that are unique to almost all public sector entities."100 Within each of the Balanced Scorecard financial, customer, internal processes, and learning and growth perspectives, the organization must define the following: • Strategic Objectives (what the strategy is to achieve in each perspective) • Measures (how progress for that particular objective will be measured)
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Examples of internal processes measures include the following: • Progress in strengthening partnerships • Percentage of invoices paid within 30 days of receipt of invoice • Information technology expenses per employee Finally, the learning and growth perspective addresses the question of how the organization and its employees must learn, improve, and innovate in order to meet the objectives set forth in the strategic plan. Examples of learning and growth metrics include the following: • Number of training hours per employee • Percentage of perfect attendance • Turnover rate • Length of employment • Cost per hire • Percentage of employees who are satisfied with the learning and growth opportunities in the organization • Percentage of employees who report training opportunities among the top three reasons they accepted the job Examples of the Balanced Scorecard are provided in Exhibits 9-5 and 9-6.
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Monetary Incentives. Monetary incentive programs include the following: • Special Act/Service Awards.
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Source: Infrastructure Management Group, National Airport Performance Measurement and Benchmarking Workshop, September 2007. Key Focus Areas "SMART" Objectives Target JAN FEB MAR Customer Service Response Time to Comment Card Complaints 10 Business Days 82.58% 92.57% 97.00% Reduce Aircraft Delays 3 Closures 2 4 2 Monthly Cash Flow for Facilities Projects $ 97,584,000 $ 1,989,000 $ 2,928,000 $ 3,393,000 Monthly Cash Flow for Capital Projects $ 363,013,000 $ 16,778,000 $ 14,617,000 $ 23,042,000 Number of Facilities Projects Awarded per Quarter 3, 9, 5, 10 3 Number of Capital Projects Awarded per Quarter 14, 11, 3, 5 14 Measurement of Passenger Transit Time from Roadway to Gate 37.50 minutes 52.22 min.
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• Performance targets for individuals and groups must be linked to outcomes they can affect. CASE STUDY Airport Customer Excellence Employee Incentive Program -- Philadelphia International Airport (Philadelphia, Pennsylvania)
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The organization can use nonmonetary incentives and rewards to motivate and reward employees. Nonmonetary incentives are used to increase awareness and recognition.
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Perfect Attendance is awarded with a congratulatory card form the President of the Executive Committee, along with $25 in YVR Bucks that may be spent at any of the Airport's vendors. Four wellness programs are available to employees: the Wellness Program; Employee Family and Assistance Program; Green Commuter Rebate Program; and Smoking Cessation Program.
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Scanning the Environment and Predicting Developments (Chapter 6) Identifying Strategic Issues, Strategies, and Long-Term Objectives (Chapter 7)
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10.2 Reviewing Strategic Plan Implementation and Modifying the Strategic Plan The environment in which airports operate will eventually trigger the need for revisions to the strategic plan.104 Valid reasons for modifying the strategic plan typically include changes to the organization's external environment or changes in the availability of time or resources necessary to implement the plan. Valid changes often relate to the extent of achievement of particular objectives rather than changes to the objectives themselves.
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. To understand how the organization's internal and external environment has changed, the planning team should first re-conduct the SWOT analysis using the techniques described in Chapter 6.
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Key Terms
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