Reality May Be Difficult
Business leaders in numerous markets are betting that their market will come back and spend. Many choose to believe that the economic crunch is temporary and things will rebound. Maybe it is time for a reality check and especially for private aviation operators. The world is changing and much of the change could be permanent. Just consider what has happened in the last twelve months to our financial markets.
The real crisis is in the DNA of the industrial economy — and it’s just as lethal as ever. Most businesses are socially useless. They’re about as useful to society (to paraphrase Gloria Steinem) as bicycles are to fish.
Sound controversial? If it does, it only underscores just how out totally of touch with real value we’ve gotten. (Here, for example, are Paul Krugman, Simon Johnson, and Lord Turner all discussing social uselessness.)
What has socially useless business cost just over the last five years? $12 trillion at a minimum. Those are the costs of the various bailout packages for socially useless banks.
Socially useless business is what has created a global economy on life support. Socially useless business is what has created a jobless “recovery” and mass unemployment amongst the young. Socially useless business is why we don’t have a better education, healthcare, finance, energy, transportation, or media industry. Socially useless business is a culture in shock, reeling from assault after assault on the fabric of community and comity. Socially useless business is the status quo — and the status quo says: “You don’t matter. Our bottom line is the only thing that matters.”
So there’s a single, simple, fundamental question every decision-maker should be asking today. How useless is your business?
To answer it, you’ve got to stop thinking in yesterday’s terms. Forget the decades-long obsession with business models for a second. It’s time to think anti-business models. Anti-business models are models companies use to profit without doing anything socially useful.
I’ve put them in terms that a certain generation of beancounters can understand — in the hopes that, before it’s too late, and awesomeness rains down on them like thunder, they change their ways.
Does This Apply To Private Aviation Operators?
The private aviation industry has been hit by a shock wave. Reductions in charter business are down 20,30,40, 50% and more. Why? because the entire economic climate has changed and isn’t likely to return, ever.
Private aviation operators basically have two choices. Continue to believe it will come back to the good old days and you’ll likely die. The other option is to reinvent yourself and your entire industry with innovation that expands your market and plugs you into “social business models based on collaboration, communications and innovation.”
Your legs and seats are empty. Time to downsize your operations and look for ways to go lean and mean while expanding your market opportunity. Frightened? You ought to be. Think this is hype? Well, just wait and see. Your inventory just may be on the auction block and your balance sheet will won’t be worth the paper it is printed on.
What say you?
3 Responses
to “Reality May Be Difficult”
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- Nov 11, 2009: uberVU - social comments
During business school, we were taught that there is a grossly overlooked option/solution to every business problem: shut the business down. Sometimes it really can be the best answer, but probably the most emotionally difficult one to make. Especially when you consider the investment of money, sweat, and passion that you’ve put into your operations. (“Sunk costs,” according to economists, shouldn’t be considered when making future looking decisions, however it is impossible to separate from the psychological experiences they evoke).
In my personal experience, I’ve noticed that people often want to “reinvent” when things go bad. To me, it is a far few who can actually achieve this. These are the folks who have actually been able to previously innovate well beyond the margin and can credibly claim “revolutionizing” whatever industry they were in (generally empty claims by most).
I propose instead of something as amorphous and potentially risky as “reinvent,” we consider “re-configure”. The aviation charter business is extremely fragmented — this is why brokers (an arguably inefficient system) can thrive; it’s the best way for a consumer to reach out to disparate parties in one fell swoop. With relatively low barriers to entry, new charter companies rise up – and die out – practically monthly. And without a large force out there with the funds to educate the general population, the knowledge of the advantages of flying private seems to stay with a relatively small group of people.
Instead of reinventing yourself – which takes time and money, and potentially could require a new staff/set of skills — why not reconfigure and join forces? Merge with another operation? Imagine what could happen if all charter companies were able to join their marketing budgets together? The buying power would be awesome and the education of the public wouldn’t be far behind. What if we were able to seamlessly work together to provide coast-to-coast, regional coverage without diluting profit with broker fees?
Now *that* could truly revolutionize an industry.
Where are my manners? I forgot to add at the top that I found this to be a most interesting and thought provoking post (perhaps obvious by my enthusiastic response). This is one of my favorite industry blogs – thanks for always keeping up the great dialogue!
-Ellen