Most of us in business aviation do an okay job measuring “activity.” Meaning, we generally track our miles flown, gallons fuelburned, hours flown, etc.
This is a great start. But it’s never a goodidea to drive 80 miles per hour while only looking in the rear-view mirror.
What we should be doing a better job of isspending a lot more time talking to our leadership teams and reporting executives about anticipatory things.Put simply, we need to watch where we’re going or we’re likely to get sideswiped.
After all, reporting on the right metrics will help your aviation organization take charge of its destiny and better shape its future. And that’s what every company wants—a forecast that helps them predict what’s going to happen.
But how do you go about getting started? At Gray Stone, we recommend implementing a 4-step process called Level IV Metrics. Here’s a brief explanation:
Level I Metrics
This is the place at which that many flight departments find themselves. Truth be told, it’s usually a well-intentioned attempt to portray department performance, but often a hasty response to a request from corporate. Any data available is assembled quickly to meet a deadline, stuffed in a manila file folder and expedited to the reporting executive’s office. But when you step back and look at the data in totality, it does not accurately portray your true performance, nor does it anticipate future trends.
So how do you recast this data into meaningful and predictive management information?
Level II Metrics
First and foremost, you must understand what’s needed. What are the goals of the parent company and what’s important to your reporting executive? What is the Mission of your flight department and how will you objectively show that your Mission is being effectively actualized? Answering these questions will help you define and prioritize what data to track.If you have a business analyst in your flight department, he or she can help you run through your numbers and decide how best to track and express them. An equally effective way is to tap into the brain trust of your department. Assemble your leadership team and engage them in the effort. Or draw upon some outside experts to quickly and efficiently help you get started.
Once you have your raw data assembled, you can start to historically report on the important activities such miles flown, fuel consumed, flight hours, number of passengers, departure and arrival times, delays incurred, etc. It’s vitally important to express the data clearly with respect to targets—either internal corporate expectations or external peer group benchmarks. These become activity-based metrics.
Level III Metrics
Knowing where you’ve been is great, but as stated above, you shouldn’t keep your eyes glued to the rear-view mirror. In the third stage, it’s time to focus on the future.
Level III metrics(or predictive metrics) look forward and predict performance at predetermined periods in time, usually monthly and at the end of the fiscal year. Based on “year-to-date” historical performance, you can project future performance with a high degree of accuracy. Doing so drives vastly improved decision making from an operational perspective. It also shows corporate that you’re influencing outcomes and that the flight department is capable of “managing its destiny.”
Level IV Metrics
Last but not least, the fourth level quantifies the value that your flight department is creating for the host organization and its shareholders. Here’s where you can prove that you’re helping to increase company profitability and measurably improving operating results. It requires establishing different relationships with the operating units of the parent company and becoming a true business partner. Based on your unique set of value criteria, your business aviation team can express value in many ways, such as:
- executive time saved;
- deals closed using corporate aircraft; and/or
- customer facing opportunities created by corporate aircraft.
Once you make it to Level IV, you will find a changed relationship with corporate—one based on trust because you’re becoming a true business partner.
Creating Other Business Aviation Thought Leaders
Over the past few years as we’ve helped several Fortune 500 corporate flight departments implement these reporting techniques,it’s been a telling experience. What we find is that once the aviation reporting executive reviews these metrics packages, they have quite a few ‘aha moments.’Knowing the numbers gives them the knowledge necessary to make better operating decisions that impact the entire company.
And in a few cases, these metrics techniques have been disseminated to other support departments such as Employee Health and Safety (EH&S), Security, Corporate Governance, and Compliance. This means that the business aviation department becomes the thought leader and “go to” group when it comes to performance reporting.
That’s pretty darn cool.
So for those looking to dig into the numbers this year, we applaud you. It’s the best way to see if you’re headed in the right direction—and we can’t think of a better way to demonstrate your department’s value at your next operational review.
And, it’s our experience that reporting executives and shareholders think precisely the same way.
Next Step
If you’d like assistance with digging into your data and understanding where to start, we’ll provide a free no-obligation discussion. Just give us a call.