What management has to learn from the Airbus vs. Boeing competition

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Remember, it was a long long time ago, that, in the times we are living, means something like ten years. At this time Airbus was wondering how to compete with Boeing on the big carriersmarket and was working on what would become the A380. On its side, Boeing was not thinking about replacing its mythic 747 and was working on a smaller carrier, which would become the 787.

Why these two so opposite approaches ? In fact, they were the embodiment of two radically different visions.

According to Airbus, airlines companies and were should be on a trend of rationalizing costs and most globally transportation organization. So their conclusions were that passengers would have to be taken to Hubs from where they would fly to their final destination, possibly another Hub. That meant that, for example, to go from Marseille to Miami, you should go from Marseille to Paris where you would be gathered with a lot of people going to the USA, then fly to New York and, then onlyn take a plane from NYC to Miami. It would allow to rationalize the use of airports infrastructures (for which companies has to pay), take off slots, ensure a maximum planes occupancy in order to lower the cost per passenger.

In the other hand, Boeing was convinced the future was in peer to peer travels (ie direct flight from Marseille to Miami). That implies smaller planes that can be more easily filled filled.

Who was finally rigth ?

Expect the delays both programs encountered, it seems that both were right if you consider the order books.

But you may also consider both were wrong to thing that these two possible choices couldn’t be complementeray.

The fact is the market seems to say ; we need both. For rationalization reasons we need passengers flows to go through defined points and chanels and to connect any new destination to only one hub to make it available for all. But, when needed, and when the market makes it possible, we may be able to shortcut the hubs in order to save time and provide passengers with more comfort.

Anyway companies clearly understand that and the biggest ones (those who had the biggest optimization margin according to their network – and those who can afford working with two different suppliers) are buying both the A380 and the B787.

Do this makes you think about something you experience in you everyday work ?

The difference between organization that force people to follow defined channels (most of times hierarchic chanels) to communicate and those that allow ad hoc networks and channels to emerge when needed ?

To keep up with the airlines analogy, a destination available through a hub may be temporary served by a direct flight on vacations time for exemple. Meaningful, isn’t it ?

That leads to a more concrete conclusion : neither  the “all top-down hierarchic” nor the horizontal and flexible organization are an optimal way of doing things. In the other hand, an organization that would make both possible like a Service Oriented Organization or a wirearchy meet the issues companies are facing.

Let’s come back to our point. Le fact to impose channels and mandatory points creates bottlenecks that are precisely located at those mandatory points. And the less we can say is that companies need more and more flows to work properly. One too simple response would try to reduce information flows. I don’t agree with that, because it means to deprive the organization of its fuel. What has to be done is delivering the right flows at the right place, avoiding bottlenecks.

Of course, some may answer the analogy can’t go further because, when talking about airlines, overloading a hub creates delays and a “stock” of waiting passengers. In the same way, in a factory,  the same logic creates a stock of pieces before the bottleneck. But, in our situation, there will be no stock since information is intangible. So everything is all right !

That’s a big and dangereous mistake ! First there are stocks of unread or not taking into account emails. The message corresponding to a question, a need, the non-answer will prevent, at a given time, someone from doing his job. Another consequence is that decision making becomes slower and slower, and so does the company’s ability to act and react. Third consequence : the manager is turned into a hub, a marshalling yard, what reduces his ability to do what he was hired for and for what he has specific skills : distance himself, organize, help his people to succeed and progress

One more thing : an airport can be extended, new runways can be built. But an human’s being day will never be more than 24h and saying that “we don’t care, he’s got to find time to do his job” has great impacts on people’s health. But perhaps some don’t care about that…and are suprised when their people come to a burnout !

This takes me to another point : the “email issue” is often considered as a question of spent / lost time. But, in order companies really understand how important this issue is, I think we should focus on the organizational approach : what matters isn’t the wasted time (though…) but its impact on the enterprise’s performance itself : an increased response time, less reactivity, slower decision making with less accurate decisions (since people miss time to make them). The real pain is obviously there.