Plane Conversations

When it comes to air travel today, no one enjoys it.

Is There A Better Way?

Watch the video below and give this alternative some thought the next time you think about using a commercial airline. This alternative would have enabled me to go to New York City and back within the same day.  Total travel time would have been roughly five hours instead of 18.  And it would have cost me less!

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Historically strategies were created based on assumptions made about how the markets respond and to what. The aim of a strategy was to create market differential, awareness and value that the market would respond to.

“Clients of an organization, whether they are citizens or customers, now have ready access to these tools. For all the supposed decisiveness of managed organizations, by relying on legal and PR departments to respond, most companies now react more slowly than their customers. In the new world we’ve entered, you can only stonewall things on your side of the wall, yet most media is no longer on that side of the wall.”

Strategy is Now Driven From the Other Side of the Wall

Creating a road map of how your organization will succeed is now a process driven by the conversations from the market. Previously strategy did include an assessment of the market but limited by the perspective and terms of how one defines “the market“. The definition of market has changed in that consumers and business are now engaged in defining the market more than ever before. The definition and sentiment of a market are being framed by real time conversations about anything, everything, anyone and everyone.

Market sentiment used to be contained within the walls of a corporation. Complaints were reviewed as were compliments. Compliments were added to the marketing mix while complaints were buried until results reflected the need for change.

Today both complaints and praises are in real time and out in the open for everyone to see. Anything placed on the web enters the digital library and the more content that references your business the more visible it is the Google. The higher the visibility the easier it is to be found by others.

Before making a purchase or taking a job what do people do? 95% go the web to gather references and intelligence. Said references and intelligence are no longer driven by your media rather they are driven by media created by your market.

If you understand the power of a network then you know that three satisfied customers may tell three friends and those three friend may tell twenty seven then you know the power of the coice of the customer has just been accelerated by the web. The same is true about angry customers. One angry customer can reach 3,000 people at the click of a mouse. Those three thousand can reach over 100,000 given the power of networks.

The web works based on a rate of change and a rate of interest. Which gets you the highest rate? Satisfied or angry customers? Do the math.

Strategy is critical for any business but if you are following old strategic methods then you will fail critically. Today failure is instantaneously spread at the click of a mouse. The markets of conversations spread faster than most organizations can react. Building a strategy from the outside in is vital to your future success. When markets change so must your strategy. Much has to change starting with your thinking. Get it?

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Sometimes we wonder why people don’t understand what we are saying. Lots of time people wonder what are we saying. In these instances there is a gap in understanding who is communicating what and why.

Understanding comes from knowledge. When we talk to people who have specific knowledge about something that we don’t have sometimes it is difficult to put the conversation into context. Most of us try to put new knowledge into context with old knowledge we have. It doesn’t work.

The Mind Frame of Private Aviation

Ever had someone view a problem differently than those who have the problem? When you are not close to a problem sometimes your perspective sees things that those close to it can’t.  The reason is that paradigms, beliefs based on experience, become barriers to seeing things differently and, more importantly, paradigms inhibit innovation.

The news from private aviation and aviation in general is depressing. Airlines losing money, private aviation is upside down and inside out. If you haven’t noticed, many are believing things are as bad as they seem and communicating “bad news” to each other. Bad news begets bad news which reinforces beliefs that just propagate more bad news. On the other hand some ignore “bad news” and choose to believe it is only temporary and that good times will be back soon.  Then the harsh reality hits and the only reaction is “cut cost” so we can survive.  Sound familiar?

A Shrinking Market Doesn’t Expand

Have you seen the latest report from NetJets?  Not good, major cuts and reductions. This seems to be the flavor of the day and subsequently we will see many more doing the same. Why? Because the old market you’ve been serving is indeed shrinking and not likely to come back. So when a market shrinks you have basically two choices. Shrink with it or expand your market.

To expand a market you need two things. Innovation that improves your offering and a market that will consume your offering. Now when it comes to air travel there is an obvious market of consumption that is being fed by commercial airlines. Yet the experience created by that market is at an all time low.   The idea of commercial airline innovation is representative of what Southwest has done. Yet Southwest cannot effectively serve the entire market and the experience is still dreadful.

Improve & Innovate Private Aviation

As I watch and read the events unfolding in private aviation the solution seems obvious to me. Then again, I am outside the industry but that could be a good thing. As a strategist I see several things that must change in order for the private aviation industry to not only survive but thrive. These are:

1. Expand your reach. Most travelers have never experienced and are unaware of the value and benefit of private aviation. This means you must communicate but do so in the terms markets can understand. You must also become relational. In other words - drop the elitist attitudes.
2. Leverage technology. Technology is exploding daily. The technology is social in that it enables you to reach markets like never before. But the technology is only as good as your knowledge of how to use it effectively and efficiently.
3. Collaborate Rather Than Compete: If you all are chasing the same old market and that market is shrinking, then to expand, you must collaborate. Competing for a smaller pie means you all get less. Collaborate and expand your collective market by using knowledge about new models, methods and markets ripe for an alternative to commercial travel. This will require new thinking and that will require new knowledge. Learn together.
4. Innovate or Die:Let’s face it. Your model doesn’t work. Your capital is shrinking and you’re facing a slow but obvious decline. Innovation comes from thinking outside your existing system and working together to create new markets, new models and increased revenue for all. Innovation doesn’t come from silo mentality. It comes from collaboration and ideation. What is that? It comes from “collaborating with crowds.”
5. Don’t Wait For Tomorrow: A sense of urgency is needed and the current market ought to give you enough urgency to do 1 -4 above immediately. Tomorrow isn’t likely to bring you the markets you want, rather, they are waiting for you. The markets are waiting for you to change, move and communicate like never before.

If you are ready, say so. If you are not, well then, stand aside and let those that are change their minds and thus change your industry.

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Private aviation is feeling the effects of the economic downturn with growing job losses and plummeting business confidence. This has translated into cuts in private aircraft usage; so, many in the private charter brand category are looking for ways to reach the business market in a more cost-effective way. In a departure from traditional marketing practices, private aviation brands ought to be  increasingly turning to the web for promoting their proposition as well as seeking out new audiences that would like to find alternative ways to travel. The problem is that although private aviation businesses all have web presences now, many fail to realize the full potential of this new thing called social media.

Since private aviation is considered a luxury, one wonders whether  other luxury brands are using social media. According to the Luxury Institute the trend towards e-commerce is already happening in the US:

• In 2008, 33% of luxury brands had e-commerce sites.
• In 2009, 66% percent had e-commerce sites.
• Luxury consumers are individuals who make $419,000+ per year.
• 48% of them are on Facebook, and 14% of them are on Twitter.

How Does Private Aviation Stack Up?

While all private charter businesses  now have established websites, generally their approach to digital marketing (specifically, search, social & target marketing) is often sub-optimal and fails to unleash the full potential of this channel and the related technology. This is because the aviation industry has failed to educate itself as to the power of this thing called social media.  This is evident by:

• Insufficient senior management buy-in (e.g. formal corporate KPI’s for digital marketing)
• Organizational ‘silos’ causing disconnects between ‘digital initiatives’ and ‘physical initiatives’ – for example the industry continues to use old media channels and chases the same old audience rather than trying to expand the audience.
• Lack of clarity around the objectives (selling vs branding vs engaging) – this then reflects as a lack of an online strategy, leading to confusion and a total lack of knowledge and understanding
• Small marketing budgets, if any, allocated for online activities while still using expensive off-line channels to message a shrinking market of listeners
• Within the online budget, poor use of distribution tools and conversational content. The Aviation Industry needs education on various other channels that would produce much better outcomes (such as search and social).
• A tendency to consider this thing called social media as something buyers of charter service don’t use. Wrong again, the largest adoption of this new technology is from people in the age bracket of 45 – 55 and their average income is in the high six figures.  Does that sound like a market operators should reach?

From my prospective, while the private aviation industry moans about a depressed market, few if any show evidence of innovative ways to expand their market and reach a larger audience.  Many operators take the attitude that their service is too costly for the larger audience.  Really? Then how about leveraging a larger user base, fill your seats and subsequently lower your cost per seat, per leg?   Doing so would enable your market to expand and applying the innovation afforded by social technology would allow you to reach the larger audience efficiently and effectively.

There is an old saying “If you keep doing what you’ve always done you’ll get what you’ve always got but today you’ll get less.” How are those old ways working for you?  Not good huh? Then innovate!

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Private aviation uses the term “legs” to indicate lanes of travel from point A to B. In order to optimize the productivity of an aircraft the destination flight needs to be booked as well as the return flight. However, most return flights from B to A go empty and the originator of the charter has to pay for unused “legs and seats”.

Seems to me that such a scenario represents sub-optimization of the aircraft. Sub-optimization is a waste of an asset and increases the cost of using the asset; thus, limiting the market of users of the asset. Make sense?

Now if we examined new methods aimed at optimizing use of private aviation the answer lies in filing both legs, or expanding legs, and seats with business travelers wanting to go from different points within a “leg” to another point.  The model is exactly how commercial aviation maximizes sales of seats within legs they have determined as “used frequently” by the general public.

Applying New Methods To Private Aviation

Private aviation has a much larger reach in terms of probable destinations for business travelers.  The private aviation industry serves a larger scope of available destinations than does commercial aviation. The problem is that each operator runs their “legs and seats” in a silo of distribution and market awareness. Most operators serve regular customers and wait for the phone to ring to initiate a flight. In other words, operators usually wait until the market comes to them rather than going to a larger market of probable travelers needing to get to and from a destination.

Each private aviation operator runs a sub-optimized system and, given today’s economic climate, they are all feeling the reduction of old utilization models and have assets sitting around waiting to be used. The collective waste of all these sub-optimized systems represents billions of dollars annually and many operators will not survive.

What If?

What if there was a new system aimed at optimization of all available equipment, planes, legs and seats? What if  each operator’s individual system was effectively and efficiently communicated to the general market of business travelers? In other words, if an open source grid of  legs and seats were made available to anyone and everyone, and said grid was effectively communicated to the general public of business travelers, what would happen? The likely results would be the the ability to lower the cost of private aviation, which would expand the market to the general public of business travelers. Subsequently, operators would have the opportunity to optimize legs, seats and related assets. The general business traveler would be given the opportunity  for a much more efficient and accommodating experience than commercial travel and while saving time and money. While the cost may be slightly higher than using fixed routes on commercial aircraft, the time saving and experiential factor would easily justify the increase cost.

Sound crazy? Not really when you consider the power and reach of social technology which could easily communicate available legs and seats to a very large audience.  The technology to create an entire private aviation social grid is readily available and the use of social technology would provide the reach to the general business traveler.

Can you tell I want to go back to using private aviation vs. commercial? I am trying to stir thinking out of the box and collaboration for the benefit of all. Leadership and innovation would be needed to capture market opportunity. Does this make any sense?

What say you?

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I have been blessed and cursed at the same time. As a management consultant the use of my time is the critical elements that fuels my personal economy. Early in my career I decided that having a private plane was a valuable tool in saving me time and allowing me to be more productive.

I started out using a single engine Cessna then quickly moved up to an MU2 for speed and distance. Then I went to a Lear 25 and the last aircraft I had was a Lear 35. Over a period of roughly ten years I became accustomed to the luxury and utility of having my own aircraft to take me where  and when I wanted to go. To say the least the experience spoiled me and after selling my business I could no longer afford or justify having a plane for personal or professional use.

Back To Commercial

After taking some time off from the business world I decided to get back in the game. Being back in the game ultimately means travel is inevitable. They say “once a consultant always a consultant“ and so I find myself back into consulting but focused on helping organizations use  social technology for business purposes.

Over the last five years I have had to travel frequently and unfortunately it has been on commercial airlines. To say that the experience is a big time waste and anti-social is to put it mildly. Commercial air travel is at its lowest point of experience and efficiency.  I am sure everyone can and will relate.  So I ask and desire to go back to private aviation but seek ways to do so without the traditional excessive cost of ownership.

Private Aviation Needs To Change

The private aviation industry, like all industries, gets stuck believing in old business models and subsequently fails to see alternative models. Business models change as markets shift. If you haven’t noticed all markets are shifting not only because of the old economy but because of a new economy.

The new economy is about communication, deep and wide. The new economy is being transformed from the fundamental way we are revolutionizing communications. Communication is the foundation of society, of our culture, of our humanity, of our own individual identity, and of all economic systems.  Communication, and its ally computers, is a special case in economic history. Not because it happens to be the fashionable leading business sector of our day, but because its cultural, technological, and conceptual impacts reverberate at the root of every business including private aviation.

Private aviation is no longer in the business of just flying rather it is in the business of communications using every kind of media available. Think about it. The industry uses terms like “legs, charter, FBO’s” and a host of other nomenclature that most people don’t understand.  Given the current economic pressures on private aviation operations one must ask “how, what, when, where, why and whom are they communicating to?”.  It seems that most are communicating to the same limited and depressed market of existing private aviation users.  How is that working for you? In other words everyone is chasing a smaller piece of an old pie rather than working together to increase the size of a new pie and making it available to more people.  Get it?

Wouldn’t it make sense to expand the market of private aviation users? To do so operators would have to work together to find ways to lower the overall cost of private aviation. What if all those empty legs and available seats were made available to the general public? Could you communicate and fill the planes at a per seat cost rather than a “total plane cost”? If you did would the public opt in for a seat?

You could and the public would respond and quickly become spoiled by the experience. However, to optimize the use of planes you’d have to cooperate with every operator and help each other optimize the entire system. That may be hard to do unless the industry begins to think differently and agrees to collaborate. Who is willing to try? If you don’t you’ll end up fighting for what you currently have which is less.

Somebody please help me get back to private aviation. Got any empty seats?

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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.”

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?

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