Fifteen months after joining Bain I was promoted to senior associate consultant. Most people take about 24 months to make the jump from associate to senior associate consultant so I was doing well. I was by no means breaking the speed barrier with regards to my promotion speed but I was definitely on the radar as a consultant to watch. At this time I was really looking forward to do something a little different, an airline turnaround study. I had been on two large aviation projects and some smaller studies. The first large study was a disaster but the second was a huge success. I desperately wanted to be in another sector and closer to home.
Remember this was the era before the Smartphone.
A couple of reasons were driving my hopes for an assignment at home office. For one, baseball season was in full swing and this time I wanted to be there for as many home games as possible. I was tired of missing the games and catching the updates at the airport. Remember this was the era before the Smartphone. Second, my personal life was taking off. I met someone who worked very close to my office, within walking distance, but my excessive travelling was damaging that convenience. So hopefully I could secure something where I could spend more time at home. I was always excited about the work the media and banking teams were doing. There was lots happening in the technology space and while the San Francisco office commanded most of the technology work, my office and region had a lot going for it. I spoke to my mentor and the various partners. Given my recent project success, I had a good and growing reputation which I was hoping to leverage. There was certainly interest to use me on some of the technology work.
Ah. Fate had a different plan for me. Bain had been invited to do an airline turnaround project; this time in Europe. Unfortunately my name came up and I was off. With that went my love life and baseball. However, I did learn about the European love for football (we call it soccer). The project was definitely one of the most exciting I had ever been staffed upon. An Eastern European country was trying to pay down its debts and raise much needed foreign currency. A new president and team of advisors had hit on the idea of selling-off large chunks of the state run economy.
The thinking was that the sale would bring in immediate hard-currency, fix the balance of payments, inject western ideas and management into the economy, raise productivity and hopefully this would all lead to an increase in the standard of living. The state run airline sector, banks, chemicals companies, food companies, textiles, auto companies and so on were all slated to go. However, there was hesitancy that a rushed process could lead to a Russian-style fire-sale where all the prime assets where picked up on the cheap with no real short-term or long-term benefits to the country. Therefore, it was decided that the airline company would be the pilot. It would first be readied for sale and then taken into an initial-public-offering led by a consortium of US investment banks.
***
This turnaround project was again a great opportunity for me. The engagement was overseen by the same partner with whom I had worked with previously so he was aware of my skills and capability. That helped immensely since I was being given important roles which were above my level. They were clear stretch-roles which allowed me to grow significantly during my formative years. I really relished this role. It was exciting and I was happy the firm seriously looked at my interest in seeking a banking or technology project and gave me something as close as they could possibly find.
This was in the days before Chris Zook wrote his hugely successful book “Profit from the Core” but his ideas and thinking were already being tested and developed with clients.
I was working with a consultant to look at hundreds of different businesses within the state-run airline and determine if they should be retained. This was in the days before Chris Zook wrote his hugely successful book “Profit from the Core” but his ideas and thinking were already being tested and developed with clients. So our role was simple. Determine if the 70 or so businesses which belonged to the airline should be kept, and if not, make the case to divest them. Like all state-run businesses without a clear profit mandate, this company had really poor financial controls, reporting, asset registers and so one. It was really painful to construct all these items.
And this was normal since profits were never the target. It was all for the greater good. The government was also very, very paranoid about security and wanted the airline to backward and forward integrate to lock-in both raw materials and routes.
Moreover, strategy did not seem to dictate decisions. The main-office for the airline was in a suburb on the outskirts of the capital city. In the late 1980’s the national government had decided to build a prestigious, and expensive, new technical university very close to the head office. So what did they do; they asked the airline if they would “oversee” the university. “Oversee’ could have meant many things, but it eventually led to the airline funding the university, managing the university and even keeping the university on its own books. And this was normal since profits were never the target. It was all for the greater good. The government was also very, very paranoid about security and wanted the airline to backward and forward integrate to lock-in both raw materials and routes. So the airline owned, funded and managed the following:
• Pilot training school
• 4 different aircraft manufacturing companies
• 2 engine manufacturers
• 2 engineering training academies
• Several maintenance facilities
• Several aviation liquid fuel depots, refineries and distribution companies
• 2 Oilfields
• Several basic catering companies
• Road maintenance companies
• Airports
• Facilities management companies
• Airport management companies
• 6 Travel agencies
• A leasing company
These are just the big-ticket items and the ones I can name without giving away the clients identity. There was one particularly large investment totally outside their main business which I cannot mention. If you add in the smaller investments and their actual airline-critical investments, this list easily grows fourfold.
***
My team worked really closely with the strategy group. They were working out what should be the new business and its retained assets, and our job was to then build the business case and determine the value created from disposing the non-core assets.
The country was going through so much financial and political risks that the risk premium, and discount rate was constantly changing. This dramatically affected the valuation.
Building the valuations for this turnaround project was incredibly hard. The basics of a valuation call for forecasting the future cash-flows, adding in a terminal value and discounting back to get the possible sales price. However, so many things drove the value of these businesses:
• The country was going through so much financial and political risks that the risk premium, and discount rate was constantly changing. This dramatically affected the valuation.
• Many of these non-core businesses were only valuable if they had the airline as a client. If they were cut loose, their value would plummet. So we needed to feed this back to the strategy team since it was their call to determine if the airline should continue using them. Choosing the incorrect or inefficient suppliers would dramatically affect the airline’s cost structure.
• Other Eastern European countries were about to embark on similar exercises. Therefore these assets needed to hit the market very quickly or the explosion of supply in similar assets would dampen prices and lower the asking price. Eastern Europe is highly fragmented. So all the assets were not necessary. Picking assets in a central location would allow the entire region to be served on the European side. Russia and the Asian nations of the Former Soviet Union were however different. We needed to get these assets out cleanly and quickly before the market became saturated.
Collecting all the necessary data to this was tough. Luckily we were already working with the investment bankers who were helping us with the analyses.
So we had to work with the strategy and operations teams as they crafted their solutions. Things changed wildly over this 4 month engagement. As new and critical data was discovered, entire recommendations changed.
I did feel cut out of many typical Bain events and cultural happenings. Bain did not have an office in this country and we were just starting off. I felt isolated.
***
Up until this stage I was still very, very excited about working in an exotic location. That enthusiasm was heavily dampened on this trip. While I really, really enjoyed the engagement, working with new people in an exotic country, it also forced me to rethink some things I took for granted:
• My freedom was heavily crimped. At the time kidnappings where a popular pastime and we were confined to our offices and hotel most of the day and night. We could only go out in groups which affected this night-owl for the entire 4 months.
• Being in a foreign country on vacation versus work is such a bizarre experience. On several gorgeous days we would see people strolling through the streets, sitting at cafes or going to the lake. We would be in the office and watching all of this behind tinted bullet-proof glass. That was depressing.
• Not speaking the local problem is a huge problem. Every interaction requires a translator and there is a lot that is lost in translation.
• Your social life and interaction takes a huge hit. My early days at Bain were also in the early days of the internet. Mobile phones were still taking off. Skype was a dream. Facebook and social networking were not even ideas at this point. AltaVista still ruled the search universe.
• Eastern Europe was struggling at this time. While we saw people having fun we also saw much more signs of poverty. Now it is much better, but then it was tough to watch.
• I did feel cut out of many typical Bain events and cultural happenings. Bain did not have an office in this country and we were just starting off. I felt isolated.
• I hated, hated, and hated being away from an office for so long. I felt I was drifting into some weird world where I was cast out with no link back to the real world. I realized how much I missed being part of something bigger.
***
To Bain and the client, the turnaround project was classified as a success. Over the years that followed as the client implemented the recommendations, they did do well. They won awards for their service and they have a healthy balance sheet. Many of the businesses linked to them were never going to be viable and simply folded. That could not have helped the exploding unemployment situation.
This airline turnaround project showed me the importance of operations and implementation. Like everyone else I was obsessed with being a “strategy consultant”. Over time as I saw the challenges of running a business and implementing ideas, I realized that I needed to understand how to take ideas and make them work. I resolved to get onto a juicy operations project, out of the aviation sector, as soon as possible.
Hallelujah! I managed to get myself onto an Bain operations engagement, but as you probably guessed, I am still stuck in the airline sector. At this point I have resigned myself to accepting that this sector is so important and growing so fast that Bain would recognize my efforts here. I would not be punished for not having more diverse experience. My end of project performance review for the Eastern European airline project went very, very well. I needed to continue maintaining that momentum. Yet, that was proving to be difficult largely due to my own poor planning.
The fatigue was starting to creep up on me and I was getting a bit more tired more often. Heck, I thought I was too young to worry about this. So far my career was going well despite a very wobbly first project.
Some of my Bain colleagues had a rule of taking about 5 days’ vacation after every 2 month or 3 month project. It helped them relax after the project stresses. I had been at the firm for 18 months and I was still not taking any time away. Between projects I was working on knowledge capture work and internal assignments for partners. The fatigue was starting to creep up on me and I was getting a bit more tired more often. Heck, I thought I was too young to worry about this. So far my career was going well despite a very wobbly first project. I needed to push through and build my career while I had the momentum to do so.
***
My next project was going to be different. We were going to Asia to help a leading air carrier split out part of their fleet to create a new low-cost carrier to compete in this lucrative space. Low cost airlines were starting to post consistently large profits and eating into incumbents’ territories. The larger, established carriers needed to respond and one believed creating a separate low-cost carrier could do the trick. Bain had been awarded the strategy assignment which recommended the separation. Now Bain was also going to be tasked with preparing the blueprint for separating the operations and helping the airline with the first stages of the implementation. What made this project so challenging was the way the separation would take place. It was a formula which would form the blueprint for many low-cost carriers around the world.
• The parent company wanted the low-cost carrier to be branded differently and appear to be totally independent to the public.
• However, critical behind-the-scenes operations and functions would be merged to drive economies of scale.
• Other critical operations which needed to be separated like check-in, baggage handling and so on would need to be managed separately.
• The airline would be moving all 4,000 of its current employees who worked on the low-cost side of the business into the new company.
Over the next few years we saw many airlines adopt the same model in creating low-cost alternatives to fight against pure low-cost competitors. A couple of things made this a fairly interesting project:
• This was all happening at a time when the airline and unions were locked in vicious salary and benefits negotiations. The unions were suspicious that the creation of a new low cost airline was a tactic to separate the poor performers into a poorly performing unit which would be allowed to collapse into bankruptcy. You must remember this was before the low-cost airlines started dominating air travel and their economics were not fully proven.
• The airline had already communicated a go live date which was about 9 months away. Since this date was already out in the press, there was no way they could change the date without looking totally unprepared.
• At this same time the parent company was going through some of its own major shifts. It had decided to expand into several adjacent markets and industries like catering and engineering. The airline was also preparing for a major switch to an Airbus fleet. All of these changes were sucking up resources and talent. There was a concern the low-cost fleet would be left with the scraps.
• The low-cost airline was deliberately being pitched as the anti-establishment airline. It was meant to be the cool place to work and the cool airline to fly. This created animosity between employees of the parent and low-cost airline, although they were both technically employed by the same company.
Over the next few years we saw many airlines adopt the same model in creating low-cost alternatives to fight against pure low-cost competitors.
***
I had a very, very interesting role. I had to work with a team who had to create the new organizational structure for the low-cost airline. It was a very exciting role. It was totally new type of work and I was not even sure where to being. Unlike a business-case type of assignment where the next steps were relatively clear, I could not even begin to think this one through. I spent a lot of time talking to Bain organizational design experts to build an approach we could use. It was like being back in university. I needed to go right back to the beginning and learn how to learn a new field. Two of the concepts that were drummed into my head by the senior partner specializing in organizational design were that:
• Structure follows strategy.
• Think of the structure as the element which mops up deficiencies in the strategy.
This turned out to be very useful advice. Using these as the pillars for my thinking, I decided the team would spend the first 2 weeks with the strategy team really understanding and splitting apart the strategy. We needed to perfectly understand what the strategy wanted to achieve and the best way for the organizational design to help achieve this. We also needed to find any possible flaws in the strategy and how the organizational design could mitigate this.
Structure follows strategy.
Differences between strategy, operations and implementation. By the time we had come in, the strategy team was winding up their work. Like all companies going through change, rumors of the recommendations were already sweeping through the corridors. We arrived just at that point in time when the operations needed to start executing the strategy. What you learn in operations and especially in implementation work is that things operate according to an entirely different set of rules from the relatively structured pace of strategy engagements.
Implementation is not about analyses. Sure, you need the correct analyses and it must lead to the correct recommendation. However, the correct analyses will not go very far. I cannot tell you how many hours were spent listening to the concerns and questions of the employees. They saw the analyses, but they did not what it meant or how it would work in the real world. Sometimes, and this was usually the case; they just wanted their concerns to be heard.
For example, during an implementation project, when the CEO miscommunicates or poorly communicates changes, the consulting team feels the brunt of the resistance. For example if the CEO is not clear about the pace of change needed, or is unwilling to create urgency, then the operations staff the consulting team engages is sometimes unwilling to work with us. That is very, very common. Implementation is not about analyses.
Sure, you need the correct analyses and it must lead to the correct recommendation. However, the correct analyses will not go very far. I cannot tell you how many hours were spent listening to the concerns and questions of the employees. They saw the analyses, but they did not what it meant or how it would work in the real world. Sometimes, and this was usually the case; they just wanted their concerns to be heard.
Therefore, most of our time was spent listening to employees and placating their fears. It was a far cry from my previous strategy work when I would spend most of my time analyzing data and developing recommendations. In this project I was spending the majority of my time in meetings and discussions. My objective was to get the employees to start moving forward and building momentum. At the start of the post, I celebrated because I thought I was on an operations project. This was not operations project. This was a mix of operations (analyzing the operations to present a recommendation – organizational design) and a lot of implementation (helping the client achieve the benefits) work. In hind-sight I think that many firms confuse the two. An operations assignment is not implementation work and vice-versa. They are very different.
I found this project to be hugely draining. While we were developing the organizational structure, the rest of the organization was moving head first into meeting the live date target. Therefore we had to provide advice before we had completely verified our findings. This was frustrating and difficult. We needed to ensure that we gave guidance which would allow us to change direction later if needed.
***
On paper the project was designed to be led by strategy who would hand over to the organizational design team who would work with the systems and processes team, and human resources group. The systems and processes could only be designed once the strategy team decided how the two companies would interact and organizational design sketched out the points of interaction. Human resources should not be doing anything until a skills audit was complete and we were sure who would move across, how this would affect their salaries and benefits, and when they would move across. All of this needed to be timed to work in concert. Although Bain was appointed to lead this process, we found that all parts of the organization were scrambling to get things done:
We could clearly see the chaos that was erupting. We wasted no time in communicating this to the senior Bain partner along with a string of recommendations which were implemented.
• The HR director would remain in the parent company. Knowing this, and wanting to keep the best employees, he had assigned his team to find the top performers and “lock them” into the parent company.
• The engineering crew and already realized they were losing about 50% of their Airbus technicians. To ensure they did not waste any training budget on the wrong 50%, they took matters into their own hands and split the crew. We found engineers sitting in limbo not sure what to do.
• The team leading the SAP implementation where bounced of the executive committees update meeting agenda as more pressing matters crept up. Feeling as if they were losing importance, they doubled their work rate. This would have been fine, except for the fact that they went ahead and redesigned key processes and automated them without checking if they fitted in with the new organizational structure.
• Poaching of talent was taking place in all parts of the organization. Knowing that a staff split was on the horizon managers where trying to retain their best people rather than letting the business needs dictate staffing.
The good thing about this project is that we were working right next to the strategy guys and needed to have oversight over everything else. We could clearly see the chaos that was erupting. We wasted no time in communicating this to the senior Bain partner along with a string of recommendations which were implemented.
• We needed to rapidly escalate the sharing of information and connection points. Limited information in the company meant that employees were imagining scenarios and responding to them. Their imaginations always created worse situations than reality. Friday’s were set aside whereby the team leaders for each part of the transition would get together, debate progress and reach decisions.
• The CEO needed to take a tougher stand and stop the bad behavior. After a few months of hand-wringing he eventually did. He replaced the HR director and replaced the Operations Director. The tone dramatically changed with these actions. He also asked the new HR director to ensure metrics measuring the ease of the transition was built into everyone’s performance evaluation.
• The company embarked on a massive communications exercise so everyone knew exactly what was happening and when.
• We were also much more brutal on separating areas where decisions where outstanding from the operations and strategy analyses, and where the implementation teams could move along. This worked really well. Especially after spending 3 full working days to prepare a critical path for the creation of the new low-cost airline.
• The part which came back to almost derail the project was the tax implications of transferring assets, pension funds and other liabilities. We spent a few long and tense meetings to nail these down.
I realized that while strategy projects have this image of superiority, implementation projects are a little like driving a car at high-speed around a circuit on which you have never trained. Rather than instructions being radio-relayed through your helmet, you also have to watch for clues from the pedestrians. It is tough and there is much room for mistakes and spectacular crashes.
Our days were long and tiring at first. To get the organization to start moving we needed to run a project which generated lots of momentum. You cannot generate momentum by sitting in your office running analyses, emailing requests or via phone calls. Our evenings were spent running the numbers and our days were spent meeting key operations people to provide updates and help them move along. We sometimes had to meet key people three times before they did anything. Therefore the first few months were packed with these meetings and setting up the processes for the project to move ahead as we scaled down our involvement. I can safely say that only after three months did the momentum really pick up from the clients side. We still faced some big obstacles but the organization was moving in the right direction.
***
This project was important for one reason. It finally showed me how important operations and implementation consulting were. Like most consultants I had been enamored with strategy consulting. While that was certainly exciting and I enjoyed the few projects I had done, I was starting to see that operators kept the cash register ringing. You could have the grandest vision of bringing together two great companies, however, to make that work; you needed to actually make the deal work. Strategy was just as important as operations and implementation. I started talking to some of the London partners about interesting operations projects they were about to start.
Like most consultants I had been enamored with strategy consulting. While that was certainly exciting and I enjoyed the few projects I had done, I was starting to see that operators kept the cash register ringing.
In this article we discuss the very practical challenges of applying benchmarking and the need to stress-test each recommendation in a “live” setting. This was Terance’s first benchmarking study.
Benchmarking is a powerful tool used by Bain. An effective set of benchmarks can quickly tell us how far away a company is from reaching parity with its competitors.
Benchmarking provides a rough magnitude of the scope of change possible and is critical to developing a top-down business-case. The problem with benchmarks is that unless you apply common sense you can arrive at some fairly ridiculous conclusions. I have seen this all too often in my career.
Benchmarking results may lead to ridiculous conclusions
The low-cost carrier project provides some especially illuminating examples. On this project the client had invited a specialist aviation benchmarking firm to benchmark a few processes within the operations and provide a blueprint for improvement on some of the core processes. Bain would use these as input into their analyses.
Very quickly into the process, and much to our dismay given the tight timelines, we realized the benchmarking exercise resulted in benchmarks which were of little value.
The low cost airline had a major hub in South-East Asia and regional hubs in 12 other cities across Asia, Australia and one in the USA. If you have flown a low cost airline you know they cut out every single frill: onboard snacks, extra luggage, seat assignment, seating space and so on.
Basically the customer is paying a really low price in return for no extras. Another thing low cost airlines cut out are delays. Low-cost operators are brutal at cutting out any possible delays. The planes leave and arrive on time. Always.
A low cost airline whose planes do not move like clockwork is a bankrupt low cost airline.
The specialist aviation benchmarking firm was adamant that the client could reduce the turnaround time for all aircraft from 12 minutes to 5 minutes. The turnaround time is the time from when a plane lands to the time when it is ready to leave. The turnaround time includes unloading baggage, cleaning the plane and, if needed, reloading baggage.
The Asian hubs had an average turnaround time of 8 minutes while the US and Australian hubs were pushing 12 minutes and in some cases 14 minutes. The business case for more than halving turnaround time was compelling. It could mean effectively adding 15% more flights to the day.
It was a significant business case. If we could do that, the airline would no longer need to apply for additional landing rights, would not need to seek a new terminal and likely could serve more routes. It was too good to be true.
The one thing about Bain is that the firm is very practical. Just because Bain produces top-notch analyses does not mean they do not have a feeling for how things work in the field. In fact, that gut feel for operational impact is exactly why the firm is so good. The firm has a rule of providing advice which can be implemented on Monday morning at 8 am. If advice cannot be implemented this way then what is the point of the client paying for it?
Therefore, it’s not surprising that the Bain senior partner said that since so much of the revenue improvement came from this idea, and we did not do the benchmarking analyses, we needed to test it. We were all given stop-watches and told to find the best crew in each hub and conduct a DILO (day-in-the-life-of) study to see if this was even possible. So we did it and the findings surprised us quite a bit and taught me the importance of applying common-sense:
• The Asian hubs hired younger, slimmer and nimbler women. They were quick and able to dart between the seats and clean up everything in no time. Even so they barely managed a 6 minute turnaround.
• US and Australian hubs hired older and not as slim women to work the turnaround teams. They just could not move as fast. They were also suffering to maintain the momentum throughout the day. It was the equivalent of repeatedly running a 100m sprint with too short intervals to rest.
When we brought this to the attention of the specialist aviation benchmarking firm, they mentioned that the solution was to hire younger and more nimble women. That’s pretty bad advice since it did not take into consideration the extra costs of hiring them. Younger women with more options just would not do such work for the same salary. This does not even begin to solve the problem of issuing employment adverts in the US which categorically discriminated against male hires or older employees.
Since the client was unable to lower costs by achieving economies of scale in the smaller hubs, the specialist aviation benchmarking firm decided to import the idea of cross-utilization. In this concept, an employee is trained to do more than one task. This eliminates the need to hire more people, increases utilization via their usage across multiple tasks and, the ultimate prize, lowered costs. Japanese auto manufacturers made this concept famous when they used it to fix defects and improve quality on their production lines.
After exposing flaws in the turnaround time recommendations, the senior partner wanted to test this important cost reduction opportunity as well. Armed with a few stop-watches and clipboards, we again marched off to do our DILO studies. Although this was not anywhere within my work scope, I still decided to assist since it was very interesting to do. The fact that the client flew us first-class to each hub did not hurt as well.
This is what we found. Arriving at a smaller hub, there was only one person manning the check-in counter. This employee would manage all check-ins and close the counter. Thereafter, she would go to the runway and guide the aircraft as it docked in. She would then unpack the luggage, pack in the new luggage and go back upstairs to manage check-ins for the next flight. She did this anywhere from 5 to 10 times a day, depending on the hub and day, and needed to complete each cycle in 45 minutes. This is tough work!
The distance between the check-in counter, which is upstairs, and the docking airline, which is downstairs, is about 1,300m on average. Every hub, except US hub, will have average summer temperatures of 39 degrees and average winter temperatures of 28 degrees. Imagine running around, hauling heavy bags and keeping up the company’s image in this heat. This was not an easy task.
Again the specialist aviation benchmarking firm had no solution. Their view was that given the limitations of not hiring more staff, only cross-utilization would work. So we flipped the idea around.
Rather than increasing the number of staff, what if we reduced the amount of work done by the staff. The major bother for us was the difference between above-ground and ground-level activities. They were very different and doing one well (managing heavy baggage) automatically meant employees suffered when it came to engaging with customers. Who wants to work with sweaty and smelly employees?
Eventually we recommended this client form alliances with other low-cost carriers. This was at the time an unusual move but is now common. Therefore, the client would manage the above-ground activity for an alliance member and that member would manage the ground level work. In different hubs there were variations but in all, there was a splitting of work. This allowed the employees to focus on one activity and do it well. It also allowed the airlines to do everything as usual without adding more staff.
On an aside note, this idea off outsourcing selected functions worked so well that the client was able to reduce a sizable chunk of its workforce without impacting performance at all. In fact, delays decreased and customer satisfaction improved.
This goes to show the importance of critically evaluating constraints in a business problem.
Benchmarking study’s idea that could cause significant damage
The external benchmarking firm also provided one piece of analyses which would have a profound effect on the client if it were implemented. The analyses showed that the client was unlikely to receive berths at the major airports if it went ahead and bought the largest Airbuses available. The provider was recommending that the client bought smaller planes since they stood a greater chance of getting berths at the older terminals at the major hubs.
Doing this would have a profound impact on the client’s economics. Larger planes have much greater fuel economy. Giving this up would dramatically impact the clients financial strategy. Not to mention wreak havoc with all the planning for the larger planes. There were also no guarantees that the client would be granted the berths in the older terminals.
The higher taxes and landing fees in the larger airport would lead to higher final ticket prices. In other words, why would anyone choose a low-cost airline which was not very low-cost, flew smaller planes, charged more for fuel and forced them to check-in at major cramped airports?
Bain’s solution was not all that original, but it did save the client. We recommended that the client stick to the larger planes, plough the savings into lower ticket prices and fly in and out via less congested airports in the suburbs. We reasoned that customers really wanted the lower fares and would not mind the inconvenience of using a smaller airport. The upsides were lower taxes, less delays and less congestion. Ryanair had done this successfully in Europe so it was conceivable the same model would work here. It did.
Things to remember when benchmarking
This experience crystallized some important lessons worth remembering when benchmarking:
• Does the benchmark work given the practical issues facing the company? Some benchmarks look wonderful on paper but can never be applied without paralyzing operations.
• Has anyone actually seen this solution work?
• Does achieving the benchmarks leads to financial and quantifiable savings or financial and non-quantifiable losses?
• Are there constraints which need to be examined in greater detail?
• Have the regional differences been identified in the global benchmarks?
• For this solution to work, do the employees have to be robots?
• Have you asked the employees who will be affected by the change for their advice?
• Do you know how your employees will feel after you have implemented this “solution”?
That’s one of the reasons why I always feel good inside when I complete a project. Bain is so different in the way they operate. Solutions must be analytically sound. However, that’s not enough. They need to work in practical terms. Someone from Bain is always thinking about how much value there is in implementing the idea.
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