Posted by: Knightbird | January 18, 2016

United Airlines Traditional Management Performance

United Airlines made money last year, despite it’s own poor Executive efforts. But they made money so they will get huge bonuses. And they butchered a merger, but got it done. Completing the merger was probably a performance measure and they will get a big bonus for that. Oftentimes, despite our worst efforts, we find ways to make money in business. We may have a fairly decent share of the market, or may be the only provider in the market or we have a competitive advantage that allows us to be incompetent as an Executive. United Airlines fulfills that role well. In my search for articles, I discovered that they have been in trouble for well over a decade. The merger with

Passengers don’t like UA very much. [LINK HERE]. On time performance, baggage handling and amenities have all suffered. Stories like a handicapped man having to crawl off a plane because the didn’t have an aisle wheelchair and a lost girl in Chicago because no one met an unaccompanied minor are making the rounds. UA chose to merge both merged company IT in one day, and passenger and employees suffered for months while they worked out the kinks.

But in the meantime, they have had 3 CEO’s in one year, discovered corruption and screwed up so much. [LINK HERE] Why were they profitable then? Fuel prices went down. But they even manage so screw that up. The hedged their position, which means they paid more for fuel than they had to. And they still made money.

What do I believe happened?

Most businesses are run poorly when compared to the industry leaders. And then they try to discover what the leader is doing that makes them so successful and copy it. Stephen Speare wrote an outstanding book about this practice: “Chasing the Rabbit.” In it [and the rewrite titled “The High Velocity Edge”] he describes how leading companies use Lean Management derived from the Toyota Production System to achieve “outstanding” results. And apparently Rocket Scientists aren’t capable of avoiding chasing the rabbit, a point Speare makes when he discusses the Space Shuttle disasters.

Pun aside, good management is not rocket science. But it must be learned. There is no quick fix to any business. Here is my prescription. First, Commit to learning everything you can about Lean. Understand who Dr. Deming is. Know that Sakichi Toyoda was a Loom inventor and discovered Jidoka, or autonomation. Know why he implemented the 5 Why’s? Then put in countermeasures to assure the problems you find never happen again. When he asked his son Kiichiro to start Toyota Motor Works, it was with a foundation of scientific thinking. Then bring in Taiichi Ohno and Shigeo Shingo together with a lot of scientific experiments, and you get a high performing company. It’s a management system without peer in the United States today. And United Airlines doesn’t get it.

That’s why I say immerse yourself in Lean management. Participate in Kaizen. Go on Gemba walks. Talk to experienced Sensei and watch how they perform.

Then put it into your strategic plan. Explain it to your board and hire the right consultants to set up performance measures with a solid baseline. I have gone through most of my career as a board member listening to only the good. Make sure your culture understands that there is bad, and look for it. Not to punish employees connected with the bad, but to empower them to ask Why and implement countermeasures. Shades of Sakiichi Toyoda. Your strategic plan should say that you plan to be the leader in your market using the principles of Lean Management. Then require every new hire to commit to learning and using lean in their daily activities. Build the culture into your workplace and commit to making as many mistakes as happen, but with a commitment to allowing your employees the knowledge and resources to fix them.

Is it simple? Absolutely not. I was listening to an extremely knowledgeable football veteran explain how to neutralize a best of a defensive tackle and clear a lane for the quarterback to run for a first down. It was brilliant, and beyond my analytical capacity. We have to make mistakes and learn our skill set over a considerable period of time. Too often, I run into individuals who have slightly more knowledge than others in their organization. They become the expert, despite failing to earn that label through thousands of hours of effort. We are currently experiencing that in a lot of places in Alaska. We have no experienced Sensei’s, and those who claim to be know only the tools. So in my football example, they understand how the ball is hiked and where the linemen are placed. But they don’t know how to figure out how to identify a defective play and develop an effective countermeasure. The do what everyone else does, and run away from the beast of a tackle, instead of neutralizing him. That’s what UA does.

So have a strategic initiative to implement Lean, then learn, learn and learn. And bring in someone who can teach, from a systemic and not a tools perspective. The results will come faster. I have also said this to potential clients, and have written about it as well. You will not pay a single dime for implementing Lean the correct way. You will save so much money without focusing on the bottom line that it will blow your mind (to use a phrase from my youth.) I am still waiting for that creative executive in Alaska to ask me to help them with their implementation.

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