We were very interested in the article 'Planners in control' (Airline Business, April). Our research institute has recognised the inefficiency of financial tools for correcting errors in an airline's processes, and in 1994 we released our Business Economics Assessment Method (Beam) process control method. We believe this is the new generation of management theory.
Your process control article focuses on productivity. While we totally agree that a correct process-oriented approach can and will produce productivity improvements of 20 per cent or more, the question remains how this will translate to the bottom line.
Focusing on productivity alone may have quite nasty side-effects. While applying Beam in a number of cases, we have found that a decrease in productivity sometimes improves the overall profit margin by improving customer perceptions and increasing business.
While increasing productivity alone could create a bottom line benefit, improving the performance of a process with respect to its added value for the company is much better and safer.
When looking at the performance indicators needed to monitor a complete process, it is not uncommon to end up with over 200 different parameters and over 20 interdependencies. One has to question whether this can be overseen by an average manager, let alone the problem of deciding how to make corrections. Worse, interdependencies with other activities outside the control of the decision maker will be unavoidable.
Fortunately, today's computers are powerful enough to handle such complex problems, but stating that this is done by 'adding a few lines of code' seems overoptimistic.
An airline without state of the art information technology can do activity based decision making, albeit with different methods and timings.
We have never encountered any problems with employee motivation when implementing Beam; on the contrary, it has increased motivation. The key is to give employees adequate and timely feedback from the added value their efforts are producing for the company.
Certainly, companies have to avoid giving employees the feeling of being squeezed into ever increasing productivity. This can happen when the focus is on targets which are too narrow or too low-level, such as cost or time reports.
The increased motivation and loyalty of employees within a well implemented activity-based decision system is the first step towards a more complex cultural change where employees do not live inside a process but make the process itself live up to expectation.
Capt E A Van Winckel
The Aviation Development Foundation
Breda
The Netherlands
Source: Airline Business
