kpi's: promoting aviation value & building credibility ... presentation14...kpi's:...
TRANSCRIPT
KPI's: Promoting Aviation Value & Building Credibility with the Top Floor
Stan R. Phipps, CAM Manager – Finance & Business Services
ConocoPhillips Aviation October 21, 2014
Session Description
• This session will explore ideas on developing and communicating Key Performance Indicators (KPI’s) that build credibility with target audience (executive leadership) through transparent reporting of the important metrics that measure the costs, performance and value addition of the company’s aviation department. Scope will include ideas on 1) strategy development (what are the objectives, opportunities and future state to be achieved), 2) goals definition to support the strategy, 3) process & tools for data gathering, benchmarking and reporting, and 4) sustainability & continuous improvement.
2
Credibility: “Show me the Money (Data).”
• To be persuasive we must be believable; to be believable we must be credible; to be credible we must be truthful."
Edward R. Murrow
3
Strategy Development: Reinforced using KPI’s
4
Opportunities
Future State
Objectives
KPI’s: Why should we care?
• What gets measured gets done
• Aligns actions with results
• Fosters prioritization, accountability & rigor
• Measures progress
• Establishes an opportunity to tell your story
• Creates credibility & trust based on data
• Dispels misperceptions & rumors
• Facilitates access to funding
5
When should KPI’s be used…? Anywhere on anything!
Where?
• Safety, Risk, Aircraft, FBO’s, Airports, Hangars, Fuel, People, Catering, Environmental, Goals, Projects
What?
• Quantitative
– Safety/Regulatory
– Operational
– Financial
– People
6
• Qualitative • Customer Service • People • Productivity • Progress
How do we do KPI’s the right way? • Understand what’s important to your company and its
executive leadership – How do they measure success and why do you exist
• Define how your aviation team can contribute to success – Corporate Values, Vision, Mission, Strategy,
• Establish aligned aviation goals and KPI’s
• Report regularly using language they understand – Use: Variable cost, NPV, DPP, ROCE, Risk/Reward, P10-50-90
– Not: Direct cost, LLP, LOA, eAPIS, MEL, Cycles, SIFL, Mach 8.0
• Seek feedback and improve
• You’ll never reach perfection so just get started!
7
KPI’s support success by measuring progress versus plan
8
KPI’s
Goal Setting
Keys to successful
outcomes are line of
sight understanding
and “skin in the
game” using
individual goal setting
Metrics
Goals Definition in Support of Strategic Objectives
9
Align & Own Your Space
Aviation Vision:
Develop & manage an inventory of customized
aviation solutions to support the project life
cycles of our company. Deliver measured
accountability for aviation risk management &
reliability.
10
Company Vision:
Smart Growth, Superior Returns, Core Values
Aviation Mission:
Committed to Safety, Service and Team
11
Process & Tools
12
What makes a good metric? A good measure: Description:
Is quantitative The measure can be expressed as an objective
value
Is easy to understand The measure conveys at a glance what it is
measuring, and how it is derived
Encourages appropriate
behavior
The measure is balanced to reward productive
behavior and discourage “game playing”
Is visible The effects of the measure are readily apparent
to all involved in the process being measured
Is defined and mutually
understood
The measure has been defined by and/or
agreed to by all key process participants
(internally and externally)
Encompasses both
outputs and inputs
The measure integrates factors from all aspects
of the process measured
Measures only what is
important
The measure focuses on a key performance
indicator that is of real value to managing the
process
Is multidimensional The measure is properly balanced between
utilization, productivity, and performance, and
shows the trade-offs
Uses economies of effort The benefits of the measure outweigh the costs
of collection and analysis
Facilitates trust and
ownership
The measure validates the participation among
the various parties
13
Aligns with Strategy
Resonates with Target audience
Drives the right outcome; watch
out for unintended consequences!
Collaborate with stakeholders
Document a repeatable process
Repeatable report timing
Define an Owner
Use benchmarks for comparison
Continuous improvement
What makes a lousy metric?
• Metrics for the sake of metrics
– No alignment or no one cares
• Too many metrics creating inaction
• Little credibility
• Driving the wrong behavior or decisions
• Lack of follow up to improve
• No documentation or record of methodology
• No benchmark comparisons
• Excessive effort relative to value gained
14
Gathering & Reporting Tools Gathering Tools
– Maintenance Databases
– Trip Scheduling Databases (e.g. FOS)
– Crew Duty Tracking
– Aircraft
– Financial & Inventory Systems (e.g. SAP)
– Third Party off the shelf software
– Manual approaches
Reporting Tools – Safety, Environment & Risk reporting tools
– Excel spreadsheets, graphs, tables
– PowerPoint
– Third Party off the shelf software
15
16
17
18
19
20
21
22
Aircraft Shuttle Sep YTD 2013
23
Key Performance Indicators Report through 2nd Quarter 2014
HEALTH, SAFETY & ENVIRONMENTAL ALASKA SHUTTLE / Boeing
2010 2011 2012 2013 2nd Qtr.
2014 2010 2011 2012 2013 2nd Qtr.
2014
Employees Number of Round Trips
HS&E Audits Total Passengers
Global Charter Reviews Passenger Load Factor
Safety Recordables On Time Departures
Incidents/Near Misses On Time Arrivals
Recordable Rate Cost per Passenger
Contractors
Budgeted Cost/Passenger
Safety Recordables
Duty Days per Pilot (avg.)
Recordable Rate Duty Days per FA (avg.)
Total Recordable Rate
EXECUTIVE FLEET OKLAHOMA SHUTTLE
2010 2011 2012 2013 2nd Qtr.
2014 2010 2011
2012 2013 2nd Qtr.
2014
Number of Trips Number of Round Trips
Total Flight Hours Total Passengers
Domestic Hours Passenger Load Factor
International Hours On Time Departures
NetJets & Charter On Time Arrivals
Aircraft Availability Dispatch Reliability
Dispatch Reliability Maintenance Delays
Maintenance Delays
Maintenance Cancellations
Maintenance Cancellations Seat Cost
Deadhead hours Cost per Passenger
Commercial Airline Ticket
Freight Savings
Continuous Improvement & Sustainability
• Start small and grow smartly
• Borrow shamelessly; use benchmarks
• Commit, document and don’t stop
• Automate where possible
• Seek feedback from Target Audience
• Adjust as needed
• Don’t stop with the report; analyze, understand and improve!
24
"Success is not final, failure is not fatal:
it is the courage to continue that counts."
- Winston Churchill
Session Conclusion
• This session explored ideas on developing and communicating Key Performance Indicators (KPI’s) that build credibility with target audience (executives) through transparent reporting of the important metrics that measure the costs, performance and value addition of the company’s aviation department. Scope will include ideas on 1) strategy development (what are the objectives, opportunities and future state to be achieved), 2) goals definition to support the strategy, 3) process & tools for data gathering, benchmarking and reporting, and 4) sustainability & continuous improvement.
25