Over the last few weeks the local low-cost airline, Vueling, has experienced a number of operational problems resulting in cancelations and delays and while there are many specific reasons, I think there is a broader issue which is a lack of resilience in the operational set up of the airline which is actually a much broader issue in business and society at large.
According to AIRFLEETS.ES, a web site, Vueling has 107 planes in operation and the company operates about 700 flights a day. In the industry, it appears that 6-8 flights per day is about average for short haul routes like the ones that Vueling flies but if you think about it, there is not much room for things to go wrong. Vueling has apologized for the endemic delays and even had to go and report to the local government and it appears that things are getting back to normal
Resilience Versus Operational Efficiency
Back in 1996, Harvard’s Michael Porter published a series of articles entitled What is Strategy in which he charged that many companies had essentially confused increasing operational effectiveness with strategy. His assertion is that while doing things as efficiently as possible was clearly a good thing, strategy was about deciding what to do.
20 years later, however, I think we are seeing the limits to operational effectiveness and that is where resilience comes in. By squeezing budgets in all aspects of what we do and removing what the Japanese call “Muda” or waste from the system, we have created processes and procedures with no slack at all. No extra stock, no extra planes, no extra people in case they are needed.
The answer appears to increasingly about designing some degree of resilience into our hyper efficient constructs. Psychologists refer to resilience as the “quality that allows some people to be knocked down by life and come back stronger than ever” and what applies to people is also being applied to machines, factories, companies, and even cities.
Lessons from New Orleans
10 years after the devastating effects of hurricane Katrina, New Orleans Mayor Mitchell J. Landrieu has led the development of a resilience strategy which is designed to prepare the city up until 2050 and make it ready for climate change or whatever the world can throw at it. Katrina caused unprecedented death and destruction due to the failure of the levee system that was designed and built to protect the city from hurricanes.
Without going into the technical issues concerning the depth of the pilings, soil composition, and the height of the flood walls, the central issue was that the levees were built to be economical and also safe. In other words they were not designed and built with enough margin for error or slack to accommodate the unexpected. The system was not sufficiently resilient!
More than crisis management
For a business, resilience is about more than just imagining the worst case scenario and going though a crisis management seminar. Its about thinking through the assumptions on which the business is based, developing alternative scenarios, and then building capabilities and acquiring resources, or access to them, that can be brought to bear in times of need.
Every company should look at itself with an eye of thinking through its resilience particularly in terms of the environment, climate change,and the evolving geo-political situation in the world.
Every company should look at itself with an eye of thinking through its resilience particularly in terms of the environment, climate change,and the evolving geo-political situation in the world.