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How To Adapt McKinsey’s COVID Advice To Your Airline KPIs — The Three-Bucket Method.

I was excited when I recently read about a briefing McKinsey did a few days ago. During that briefing, McKinsey's senior executives provided an update on the current situation and provided some valuable advice.

So what did they say? They suggested that companies should focus their crisis management on three pillars — or, as they called it, “buckets.”

The Three-Bucket Method To Navigate Through The Crisis

Bucket 1 – Managing day-to-day business

The first bucket is about managing the day-to-day business. That means all tasks and actions that are necessary to navigate through the day-to-day operations of this crisis. Cost-saving measures, HR optimizations, or cashflow enhancements are just a few generic examples related to that bucket.

Bucket 2 – Preparations for post-COVID time

The second bucket is about necessary preparations for the day when the crisis is over. What is required to restart your business quickly? What plans are required? What are the obstacles? Again, these are just a few questions that arise in that context.

Bucket 3 – Long-term view

The third bucket is about the long-term view and more significant changes. How does the CORONA crisis impact your business in the long run? How does it affect your products, services, clients, and processes? 

Actually, this is simple but compelling advice. According to McKinsey, the scary part is that most companies are only focused on the first bucket. 

Adapting The COVID Advice To Your Airline Operations KPIs And Dashboards

Although this advice is primarily related to company management in general, I genuinely believe that:

  • the advice can and probably must be adapted to airline KPIs and dashboards
  • the scary part, mentioned above, is quite similar when we take a look at airline KPIs
  • applying this advice to airline operations KPI will generate unique competitive advantages

Let’s cut that down and transfer the advice to your airline’s operations KPIs.

When looking at the buckets above and translating them to airlines’ situations and KPIs, the result is the following:

Bucket 1 – Crisis KPIs, or navigating your airline through COVID

The bucket is about managing the current situation. Accordingly, you have to set up related KPIs. These KPIs are different from the KPIs you use in common situations. Get rid of all the quality and efficiency-related operations KPIs. OTP, misconnex, lost bags, etc. All that doesn’t matter for the moment. 

Instead, concentrate on the KPIs that help to manage, monitor, and control the situation. Here are a few examples:

  • Parked Aircraft
  • Restricted Countries
  • Operated Routes
  • Number of Passengers

Of course, the set of KPIs that are relevant to managing the situation differs between airlines. It depends on the impact of COVID, the current status, etc.

However, regardless of the specific KPIs, the idea of bucket number one is to create a comprehensive operational situational awareness of the current situation.

Bucket 2 – Post-COVID Airline KPIs

Similar to McKinsey’s thoughts, I am convinced that airlines have to start right now to initiate a KPI-definement process for the “post-COVID time.”

Just recently, I put out an entire blog post on that topic. Nevertheless, since it perfectly fits in here, I summarize the relevant three punchlines.

  1. In the mid-term only airlines that perfectly managed the crisis AND the restarting process will survive or even grow stronger. But there is no either/or. Like football, the crisis consists of two halves. To win the game you have to play well the entire game.
  2. Similar to the first bucket, airlines have to concentrate on different KPIs in a post-COVID time. Different to the crisis itself but also the time before. Check out this blog post to read more about the KPIs I consider as relevant in a post-COVID time.
  3. There isn’t black and white. What does that mean? There won’t be a specific hard cut defining the crisis’ end. On the contrary, there will be a long period of gray. Concerning your KPIs, that means they have to continuously and dynamically transform from crisis mode to post-crisis mode and finally to normal operations.

Bucket 3 – The long-term view on your KPIs

Although not directly impacting your day-to-day operations, I consider this bucket as super-essential. But bad news first: I don’t have the perfect advice at hand for this bucket. However, I have several questions you should ask yourself in this context:

  • Does the CORONA crisis —sustainably— impact the way you work with operational KPIs and dashboards? 
  • Does this crisis affect the KPIs themselves? 
  • And if yes is your answer to question number one and two, you should ask yourself how exactly that is going to happen?

Additionally, you should ask yourself how changing passenger needs —and I’m sure they will change— will affect your KPIs.

I would answer the questions with yes. Here are just two examples:

Remote work will grow.

The crisis accelerated the trend towards remote work and home office. Even in areas where we —before CORONA— said it isn’t possible. This trend is irreversible. Accordingly, the necessity to have mobile KPI solutions is getting even more critical. Extensive dashboards won’t have the same relevance in the future, but the trend to mobile KPI solutions will grow exponentially. 

And to make sure we’re on the same page: I’m not talking about KPIs that can be accessed with your mobile but about user-friendly, tailored, and mobile-oriented KPI apps.

Dynamic KPIs will gain importance.

Actually, a trend I’m forecasting for several months already, and CORONA proved me correct. Dynamic KPIs describe the ability for airlines to react much quicker to current situations and adjust the shown information and KPIs on their dashboard according to situative needs. Check out this blog post for all the details about dynamic KPIs.

Bucket 3, from my point of view, is the most complex and time-consuming. Therefore, it is even more important to start working on it as soon as possible.

Your Thoughts?

How’s your airline dealing with the three buckets? Let me know your thoughts and ideas! Always happy to receive your feedback and opinions. Just hit me up on Twitter or get in touch on LinkedIn.

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Benjamin Walther

CEO, Frankfurt

Benjamin is Information Design's CEO and a proven content-maniac. Besides running a successful business and developing pioneering ideas, he's dedicated to writing blog posts and creating content.

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