Navigating the turbulence of change – lessons from post-coronavirus travel chaos
12 Aug 2024
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As we watch scenes of chaos unfold at airports worldwide this summer, where a 90-minute queue through security is now commonplace – even before CrowdStrike's global IT outage – it's clear that the aviation industry is grappling with more than logistical challenges.
The surge in passenger numbers, surpassing even pre-coronavirus levels, has exposed deep-seated issues in planning and operational agility. These scenes are a powerful reminder of the perils of inadequate planning and the difficulties organizations face when scaling up operations after a prolonged downturn.
The implications extend far beyond the travel and tourism industry. Business leaders across all sectors can draw valuable lessons from this situation, particularly how they approach investment in people and capacity to deliver demand and the expected levels of customer service.
The current airport challenges didn't emerge overnight. It results from a perfect storm: pent-up travel demand colliding with reduced capacity and staffing shortages across the aviation industry. Airlines and airports, having downsized during the pandemic, now find themselves scrambling to ramp up operations.
We're observing a classic example of a "lag strategy" – an approach where organizations only invest behind the demand curve. This reactive mindset is all too common in business, where the pressure to minimize risk often leads to a cautious approach to growth and change. Yet, in today's volatile environment, such caution can be more dangerous than bold action.
The illusion of a quick fix
The aviation industry's struggles highlight a crucial point: growth and change impact entire ecosystems, not just individual organizations. The entire air travel value chain – from security screening to baggage handling to immigration control – must work together. When one link in this chain falters, the whole system feels the strain.
This scenario plays out in businesses across industries. Companies often need to consider the broader ecosystem in which they operate to focus on their immediate operations. When growth or change occurs, bottlenecks emerge in unexpected places, causing ripple effects throughout the value chain.
In the face of mounting pressure, it's tempting for leaders to reach for quick fixes. We've seen airports hastily redesigning terminals or airlines slashing ticket prices to manage demand. However, these reactive measures often fall short of addressing the root causes of the problem.
This gap between promise and execution is a common pitfall for businesses undergoing change. Leaders may announce ambitious growth targets or transformation initiatives without fully considering the operational implications or the time required to build necessary capabilities.
In our work with organizations across various sectors, we've observed a recurring pattern: companies often say they want to lead, but their actions reveal a reluctance to take the necessary risks. They may have strategies that aim for bold change, but their actual plans and resource allocations don't align with these ambitions. This disconnect between strategy and execution can lead to disappointed stakeholders, damaged reputations, and missed opportunities.
Building resilience through Integrated Business Planning
The key lies in implementing a robust business planning process to avoid these pitfalls and navigate change more effectively. IBP goes beyond traditional planning approaches, offering a comprehensive framework for aligning strategy, operations, and financial performance across a 24 to 36-month horizon.
- Embrace scenario planning: Organizations should develop multiple scenarios that account for different potential futures rather than relying on a single forecast. Central to IBP, this approach helps build flexibility into plans and allows quicker pivots when circumstances change. It also enables early identification of gaps in the business plan and strategy deployment, creating time to close them.
- Foster cross-functional collaboration: IBP breaks down silos by ensuring all parts of the organization – including sales, operations, finance, and key external partners – are aligned around common goals and plans. This integrated view helps identify potential bottlenecks and interdependencies before they become critical issues, creating transparency and clear accountability across the business.
- Invest in capabilities ahead of demand: Building skills and capacity takes time. IBP provides visibility into planned product changes, future demand, and supply chain performance, allowing organizations to invest proactively in people, technology, and infrastructure. This forward-looking approach may require a shift in mindset from short-term cost control to long-term value creation.
- Develop a culture of adaptability: IBP encourages employees at all levels to anticipate change, question assumptions, and propose innovative solutions. Integrating strategy deployment with operational plans creates a framework for continuous re-optimization as circumstances change, helping organizations become more responsive and resilient in the face of disruption.
- Maintain visibility across the value chain: IBP leverages data and analytics to gain real-time insights into operations, customer behavior, and market trends. This "single source of truth" allows for more proactive decision-making and faster course corrections when needed, ultimately driving improved customer service, reduced costs, and optimal inventory levels.
By adopting an IBP approach, organizations can move beyond the traditional supply and demand balancing process to a more holistic, strategy-driven planning framework. This enhances their ability to navigate change, drives growth, improves financial performance, and increases employee engagement. In today's volatile business environment, IBP provides the structure and flexibility to thrive amidst uncertainty.
Leading through uncertainty
For business leaders, navigating change requires a delicate balance between vision and pragmatism, bold action, and careful planning. It's about creating an organization that can withstand shocks and thrive amid uncertainty.
We often challenge our clients to consider their approach to change and growth. Are they adopting a "lag strategy," where they'll try to catch up only when disruption occurs? Are they willing to invest faith and resources to build capacity for future growth? Or are they simply trying to keep pace with the market, potentially falling behind more proactive competitors?
These are crucial questions that every leadership team must grapple with as they chart a course through turbulent times. The answers will vary by industry and organization, but the principles remain constant: plan holistically, execute with agility, and always keep an eye on the horizon.
As we reflect on the scenes of airport chaos unfolding this summer, we urge business leaders to view them as an inconvenience for travelers and a wake-up call. Ultimately, the organizations that will thrive in the coming years won't be those that react to change – they'll be the ones that anticipate it, prepare for it, and turn it into opportunity.
Takeaway questions for business leaders:
- How well-equipped is your organization to anticipate and prepare for multiple future scenarios? Are you relying too heavily on reactive strategies in an increasingly fast-changing world?
- To what extent do your strategic plans consider the broader implications for your business ecosystem, including key partners and suppliers?
- How closely aligned are your ambitious strategies with your operational realities? Have you realistically assessed your organization's current capabilities and the time required to build new ones?
- Are you willing to invest ahead of demand to gain a competitive edge, even if it means accepting short-term costs or risks?
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