Possibly the world’s most recognized advocate, if not expert on the value of Business Aviation,... Read More
Distributed Wisdom The reasons for paying heed to the independent-minded crowd Business Aviation captures the essence of Western capitalism by enabling companies of all sizes to act independently and creatively as they pursue market opportunities- reflects Jack Olcott.
In his 2004 book The Wisdom of Crowds- author James Surowiecki argued that a diverse group of independently-minded participants is more likely to make certain types of decisions better than individuals per se- even if the sole decision maker is an expert. In essence- he urges that we look at the behavior of large groups for insight- rather than searching for a guru or some department within the central government for all the answers.
When considering how best to satisfy the travel needs of your companies- the wise choice includes Business Aviation as an integral component of your firm’s transportation policy. Thousands of enterprises throughout the USA are testimony to the wisdom of such a decision.
More than 11-000 U.S. companies employ turbine- powered business aircraft in the daily conduct of activities designed to profit shareholders. Worldwide- the number approaches 20-000. Also- many more firms throughout the globe employ aircraft powered by intermittent-combustion (i.e.- not turbine) engines. The number of users swells even more when helicopters are considered. Crowds of companies have decided to augment their travel needs by employing aircraft not flown by scheduled airline.
The author postulates that four conditions exist for crowd conclusions to be wise:
• Diversity of opinion must be present; • Participants must have arrived at their decision independently; • Thought must be decentralized; • Some means for sensing the aggregate decision must exist.
The companies and entrepreneurs that embrace Business Aviation exhibit these characteristics.
DIVERSITY Business Aviation users are diverse- ranging from sole proprietorships to huge multinational enterprises. Nearly every Standard Industrial Classification (SIC) code is represented in the ranks of firms employing business aircraft. Most member companies of the National Business Aviation Association are classified as small in terms of employees and annual income- yet some of the world’s largest public companies also are members.
Users of Business Aviation own or operate every model of business aircraft ever certified for sale to the public. This breadth of diversity is the result of the inherent nature of aircraft design—one aircraft type is unable to satisfy all requirements. (Longrange- large cabin aircraft need longer runways for their operations than smaller equipment suitable for shorter flights- for example.)
Responding to a broad spectrum of needs- manufacturers of business aircraft offer a variety of products. Companies select the type and design of equipment that does the best overall job satisfying their travel requirements.
INDEPENDENTLY DETERMINED DECISIONS Companies exhibit independence in the aircraft they select and the form of aviation service they employ. Some firms elect to charter business aircraft. Some purchase a fractional share- but a very large number of users either own or lease the equipment they engage for business transportation. The selection of delivery system results from a firm’s independent assessment of its needs. Lesser considerations have no place in establishing Board policy. Business aircraft are business tools- and they are popular because they provide unique attributes.
We have seen business aircraft purchased or leased for the wrong reasons—image- a CEO’s vanity- having a larger aircraft at the Kentucky Derby or Davos than one’s competitor. Decisions made on such shallow premises sooner than later lead to divestiture of the aircraft- if not the ultimate conclusion of bad decision- a change in management.
Like any item of capital equipment- a business aircraft can be abused- which simply means that management is deficient in establishing use policies- not that business aircraft are inherently wrong for a company. Quite to the contrary- the broad-scale use of Business Aviation by thousands of companies is ample evidence that incorporating this form of transportation in the company’s travel policy is a wise choice.
DECENTRALIZED THOUGHT Far from being the result of centralized thinking- Business Aviation is the essence of decentralization and independence. Companies arrive at the decision to use business aircraft after analyzing their needs against other travel and communication options.
A company situated in a metropolitan area with convenient airline that connects employees to key markets differs from the firm located in rural America. Decisions to use Business Aviation are made company-by-company- and each company makes its own selection. The vast number of affirmative selections supporting Business Aviation is additional evidence of the wisdom of such a choice.
SENSING THE AGGREGATE DECISION Governments throughout the world register business aircraft. The reference to thousands of owners and operators—indeed a noticeable crowd—is substantiated by government data. Thus ample evidence exists that Business Aviation is a broadly-used tool of industry. No doubt exists that the number of business jets said to be used by corporations is indeed a realistic number. Also- the population of business aircraft is growing- even in these times of economic difficulty.
Business Aviation is particularly robust in the USA- in part because it is the embodiment of the entrepreneurial spirit and quest for performance that characterizes America’s economic growth. Individual firms- acting independently- leverage the creativity of their personnel to pursue business- and to succeed. Business Aviation is a tool in that impressive development.
The crowd speaks wisely.
Do you have any questions or opinions on the above topic? Get them answered/published in World Aircraft Sales Magazine. Email feedback to: Jack@avbuyer.com