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How effectively is your business aircraft employed in the service of the company? David Wyndham explores how a company transitions its aviation assets from being the boss's special interest to the corporation’s business tool.
Change is inevitable. Either through growth or decay- change happens in nature and in business. The aviation department- if integrated with the business structure of the company- can adapt to change. But if Business Aviation is a side-line endeavor—a special interest outside of the day-to-day running of the company—the flight department may not be able to adapt and serve the interests of shareholders.
We have seen some aviation departments that were formed by the CEO and frequently functioned for his or her express use. That leader typically was a dynamic force for growth- and the aircraft was put to good use. It also enhanced the CEO’s personal life and that of his or her family.
The business aircraft was identified emotionally with that particular individual- and not with the corporation. When that CEO left- the incoming chief executive did not see the value of the business aircraft. The corporation as a whole certainly did not. Depending on the nature of change- the new CEO and staff approached the flight department as a reminder of the former CEO (good or bad). If change needed to occur- the aircraft needed to go.
The corporate flight department is very adept at serving its master. When that means a single individual- it can be complacent in the aircraft’s special status and not be involved with the corporation as a normal business unit. Just as a corporation can have difficulties when its dynamic CEO-Founder leaves without creating the corporate culture and knowledge needed for continuing success- a flight department can disappear if it served an individual rather than the company as a whole.
How does a company make the emotional and administrative transition from ‘boss's special interest’ to ‘business tool’ that serves the whole company? How does it prevent from being eliminated when its principal user moves on?
Even in the case of the company aircraft being a special interest of the CEO- the flight department can be adding significant value to the corporation by allowing that CEO to utilize time effectively. Changing CEOs does not require selling the CEO’s special interest. But it does mean that Directors need to appreciate that a transition may be required when preparing for a leadership change.
What worked in the past when the flight department was small or the aircraft was underutilized may not be best for shareholders going forward. Governing the use of Business Aviation requires attention to how the flight department is organized and managed within the corporate structure.
Step one: The flight department needs to be integrated into the corporate structure like any other business unit. Except under extraordinary circumstances that may exist but are hard to envision- Business Aviation should not be a 'special ops unit' with a secret budget that is outside the normal corporate structure. In addition to tempting abuses- a stealth operation is not in the best interest of the corporation or its shareholders.
The flight department needs reporting and budgeting rules and procedures as do other corporate business units. Its duties and responsibilities must be documented- and metrics for measuring its success are necessary.
The flight department’s mission must be in alignment with the corporate mission. If the corporate mission changes- aviation must be able to adapt to serve the corporation's shareholders. That transition may mean adding additional aircraft or downsizing when times get tough. The mission of the corporation drives the mission of the flight department- which drives the requirements of the aircraft. If this requirement is documented and is transparent to the Board- the question of why the company has an aircraft is self-evident.
Step two: The flight department needs to prepare for the future. Not only is a budget required- but so is a strategic plan. The flight department needs to know what the goals of the corporation are and have a plan to support those goals.
The flight department needs to know that it serves the needs of the corporation- not a special individual. It needs to be monitoring the appropriate performance metrics- which may also involve external benchmarks. The flight department may need support for its incremental improvements aimed at being cost effective and mission effective.
Step three: Those managers within the aviation department need to grow in their managerial skills. As new aircraft come into aviation- it is clear that the pilots and maintenance team must be trained on the equipment. So it is with the aviation management team.
Running a single-aircraft operation dedicated to a single person if vastly different than managing multiple aircraft with expanded corporate responsibilities. Most aviation managers come up the ranks as skilled pilots or maintenance technicians. As the responsibilities of the flight department change and grow- these managers may need additional education and support.
When Directors are evaluating how best to utilize aviation assets- they must assure that those assets are managed with the same professionalism and measures of success as other business units. Effectively employed in service to the corporation- the business aircraft is a special tool adding measurably to the future success of the corporation.