Issues with Airport Organization and Reorganization (2013)

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12 CHAPTER THREE SURVEY RESULTS INTRODUCTION An online survey format was chosen to elicit basic informa- tion about current airport organizational structures and to what extent airport managers have faced business challenges that required them to perform an in-depth review of their strategic plans and adjust their organizational structures. Airports are often placed in their own category of industry, as they both serve the public and act as a business. The survey allowed the research team to further delve into the manager’s decision-making process and develop the case examples and critical issues for airport organizational change. Twenty-two surveys were completed, representing 36 air- ports nationwide. Some entities manage a system of airports, which was noted in the survey questionnaire. Sixty-three percent (14) of the respondents represent a single airport, and the remaining eight are from multisystem airports that usually manage one large or medium-size hub and one to two general aviation airports in the surrounding area. Sev- eral airports use or purchase administrative services from their jurisdiction or other service units. The predominant governance structure listed by 12 respondents was airport/port authority. Seven airports are owned by the city, two by the county, and one by both the city and the county. Respondents were asked to self-report the number of full-time equivalents (FTEs) under their direct supervision, excluding any outsourced employees or employees not on the airport premises. As expected, there was wide disparity in the answers, as shown in Table 2. TABLE 2 NUMBER OF EMPLOYEES (FTES) AT AIRPORTS SURVEYED Number of FTEs Number of Airports 7–85 employees 10 121–400 employees 7 567–1,850 employees 5 Source: Survey results. Airports that outsource or use/purchase services from their jurisdictions tend to have fewer FTEs, perhaps owing to their governance structure. In the lower FTE grouping, many airports in the non/small hub size have 20 to 30 employees and use some services from their jurisdictions. Nine airports reported no use/purchase of any services from their jurisdictions, while the remaining airports out- source or use/purchase some services. Table 3 shows the main categories of outsourced employees. TABLE 3 CATEGORIES AND NUMBER OF AIRPORTS THAT UTILIZED OUTSOURCED EMPLOYEES Department Type Number of Responses Accounting/Finance/Legal 11 Law Enforcement 9 Human Resources 8 Information Technology 7 Aircraft Rescue and Firefighting 6 Source: Survey results. Other service areas outsourced by one or two airports were bus, custodial, parking, and shuttle services. Twenty-one of 22 airport managers reported that they uti- lize a functional organization structure in which employees are grouped by job function; that is, finance, administration, operations, public safety, maintenance, or development. Eighteen airports responded that they underwent a par- tial or total change in organizational structure during the past decade. Only four airports did not report any changes. Questions about triggers that initiated an organizational change were developed from the literature that discussed reasons why leaders change organizational plans. Table 4 presents the answers. Respondents were able to “check all that apply,” indicating that several triggers were identified simultaneously. Of the 18 respondents who reported an organizational change in the previous several years, 12 stated that their airport had conducted some type of organizational analysis before the change, and seven used an internal review and staff study. The remaining five sought assistance from an external source.

13 TABLE 4 TRIGGERS FOR ORGANIZATIONAL REDESIGN (CHECK ALL THAT APPLY) Reason Number of Respondents 1. Functional reassignment 15 2. Strategic or strategy change 10 3. Accountability 9 4. Workload issues (under/over) 9 5. New skills/abilities to meet new operational requirements 8 6. Morale 3 7. Financial restructuring 2 8. Communication 1 9. Political climate or key stakeholders 1 10. Departure of key personnel 1 Source: Survey results. Respondents were asked to explain how their airports defined and measured the term “organizational efficiency.” The following list summarizes the survey results. Self-reported Definitions and Metrics for Organizational Efficiency (number of respondents in parentheses). • Effectively maximizing operations with the fewest resources possible (8) • Productivity (5) • Achieving financial goals or maintaining low operat- ing expenses as expressed in cost per enplaned pas- senger (CPE) (4) • Continuous Improvement Management Systems (1) • Return on investment (1) • Balanced scorecard and strategic priorities dashboard (1) • Adoption of various policies and procedures (1) • Employee empowerment (1) • Ability to make decisions at the “speed of business” (1) • Benchmarking (1) • Cross-training (1) • General term not measured (1) The predominant theme among respondents was that they were “doing more with less.” In the aerospace industry, the standard business model for the preceding decade has been to lay off, cross-train, and outsource many of the main functional job classifications at most airports, creating increased work- loads for the employees of many smaller “spoke” airports. Air- ports also frequently referred to rising CPE, a financial ratio airlines and airports use when comparing costs, as a trigger for change. Continuous Improvement Management Systems were also cited as a useful measure for assessing efficiency. Respondents were asked to indicate how their airports define “organizational effectiveness” and how it is mea- sured. The following list provides the survey results. Self-reported Definitions and Metrics for Organizational Effectiveness (number of respondents in parentheses) • Organizational efficiency (7) • Employee morale (3) • Customer satisfaction (2) • Tenant satisfaction (2) • Clearly delineated roles and responsibilities (1) • Optimal utilization of staff (1) • Strong accountability (1) • Measurement of results (1) • Speed, clarity, and high level of service (1) • Meeting or exceeding mission requirements (1) • Utilizing a team approach (1) • Communication (1) • Achieving results (1) • Productivity (1) • Communicating with and educating stakeholders (1) • Safety (1) • Financial performance (1) • General term, not measured (1) The majority of respondents saw little difference between effectiveness and efficiency, and none made distinctions as to how their airport defined or measured these two terms. Many defined optimal use of resources and doing more work with less staff as operating efficiently. Respondents tend to measure effectiveness by assessing employee morale. One respondent summed up the responses well: Efficiency and effectiveness are quite similar, and while loosely measured, really come down to the perception of value; employees can provide greater value to an organization than just simply providing a function that could be contracted out. When respondents were asked how frequently they evalu- ated their organizational structure, 15 indicated “when the need arises” and five indicated “each year.” When asked which criteria are normally used in the overall evaluation of the organization’s structure, the responses varied (see the following list). Evaluation Criteria of the Airport’s Organizational Structure (number of respondents in parentheses) • Executive-level decision based on strategic business plan (6) • Assessment of whether the structure is providing value for the airport (3) • Changes in workload owing to regulatory issues (2) • Alignment with functional requirements/resources (2) • Nothing formal (1) • Staff balancing (1) • Skills assessment by the CEO (1) • Observing weaknesses (1) • Zero-based budgeting approach (1)

14 • Areas of improvement in customer satisfaction (1) • Benchmarking in region (1) COMMON THEMES Each of the airports surveyed supplied its organizational chart. As the data demonstrate, nearly all airports studied employ a functional organizational structure where jobs are separated by department, largely functioning as inde- pendent silos with main departments such as operations, maintenance, finance, administration, and development. When represented graphically, these functions do not cross one another and have clear lines of authority. Larger airports appear to exercise larger spans of control. A predominant theme arose from the relationship between the organizational structure and the actual number of FTEs. Airports that are non/small hub and have municipal governance structures tend to be able to purchase and use certain services, such as accounting, legal, aircraft rescue, firefighting, and law enforcement, thus reducing the number of FTEs. Outsourcing gives smaller airports more human resources and budget flexibility, resulting in more concise organizational charts that focus on operations and main- tenance. Conversely, authority-owned airports appear to “own” all of the functional areas of their organization and tend to have less outsourcing and more FTEs. This correla- tion between authority and number of FTE prevails regard- less of airport size. In their organizational charts, most airports follow the functional model. However, the majority of written organiza- tional charts are not meeting the existing need for crossover at certain levels of finance, administration, customer service, and human resources. For example, the operations depart- ment interfaces with accounting regarding purchases, or with human resources when individuals need to be evaluated, hired, or fired. This universal element of day-to-day business practice is almost never represented in the airports’ organiza- tional charts. A one-dimensional organizational chart no lon- ger suffices for most organizations, so new approaches need to be considered in order to achieve an optimal fit between organizational guidelines and actual practice. In summary, what is most likely occurring in the real world of airport management are matrix-type structures where departments interact with other functional areas of an airport to afford organizational flexibility. The disparity between conventional organizational charts and actual practice is driving much-needed change. This phenomenon is explored in more depth in the following case examples, based on indi- vidual qualitative interviews with airport managers. Each air- port in the case examples had specific instances where their process followed guidelines the current literature, and each airport had nuances that were not found in the literature.