Issues with Airport Organization and Reorganization (2013)

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15 CHAPTER FOUR CASE EXAMPLES The Metropolitan Nashville Airport Authority uses a continuous improvement management system in its day- to-day operations and long-term strategic plans. The lead- ership team at the airport regularly deploys rapid action teams (RATs) to develop appropriate strategies in response to problems. The RATs involve management from all ranks and divisions to create a continuous improvement team- based culture at the airport; this team-based approach is used to invest in the culture and create change when needed. Nashville crosses over traditional “boxes” on the organi- zational chart to reflect this culture. Nashville changed its organizational structure throughout the past several years when it was appropriate and needed. Triggers That Guided the Organizational Redesign • Succession planning, impending CEO retirement • Development of a wider span of control for the leader- ship team • Leadership development—senior management found that they could gain greater depth and scope of the operations by swapping positions. Benefits of the Organizational Redesign • Established new processes and procedures • Developed RATs through the continuous improvement methodology • Established specific person on staff to guide and over- see the process • Established a team-based culture of continuous improvement that – Identifies the issue; – Develops a functional team of leaders and nonlead- ers; develops new thoughts and processes; – Embeds the employees in the process; – Further develops culture; – Develops leaders among the employees; and – Gives employees ownership of the process. Drawbacks of the Organizational Redesign • There was too much dependence on particular per- sonnel to guide the process; the skills to manage the change could have been borne by more than one person in the organization. Five airports were chosen for further illustration based on the surveys. The airports were chosen because of their size, governance structure, reported structural redesign, and the lessons each airport learned in the process. Responses were voluntary and reported by the interviewees. The following respondents indicated that their organizational structures were redesigned in part or whole in the past few years and are highlighted in the five airport case examples: 1. Metropolitan Nashville Airport Authority medium hub 2. Louisville Regional Airport Authority small hub/ significant cargo 3. Salt Lake City International Airport (city) large hub 4. Rapid City Regional Airport (city) non hub 5. Colorado Springs Airport (city) small hub These case examples are not to be viewed as absolute; they provide further exploration of the specific change indi- cated in their organizations. METROPOLITAN NASHVILLE AIRPORT AUTHORITY— NASHVILLE INTERNATIONAL AIRPORT (KBNA) 2010 NPIAS categorization Medium hub Governance structure Airport authority Number of airports 2 Full-time equivalents 271 Outsourced job functions None Union No Changes in organizational structure Yes, partial, certain departments or divisions Organizational analysis As needed Consultant No, internal analysis Time frame for change 6 to 9 months for single change, longer if multiple Metric for assessment None used Contact Amy Armstrong, Chief People Officer

16 • A perception arose that using continuous improve- ment system tools slowed down both improvement and learning cycles. • At times, there were unrealistic expectations for change. Lessons Learned and Sage Advice to Airport Executives • Buy-in is needed from management and the work- force—this complex process cannot be mandated. • This process can use up a lot of time and person hours, so management must support the culture of continuous improvement. • Existing culture could be assessed before implementa- tion to build consensus with employees. • As appropriate, both leadership and nonleadership per- sonnel would be included in RATs. • Standardized Continuous Improvement Management System deployment (training, etc.) may not work, so a flexible approach may be warranted. • Outside consultants can be helpful, as employees often open up and discuss important issues in their presence. • It is important that managers strive to achieve small successes first to improve morale and buy-in. • Organizational charts are to be changed as needed and appropriate. • Management needs to be mindful that change is a pro- cess, and it takes time. Nashville International Airport’s process for affecting change through its Continuous Improvement Management System has allowed it to set up a process to effectively man- age and mitigate issues within the organization. Its process is to identify the issue, assemble a RAT with differing lay- ers of employees to facilitate ownership of the change pro- cess, find workable solutions, and monitor the processes that accompany the change. It has used outside consultants to facilitate when needed. The process needs to be approved by top management, and participants need to be patient. The airport emphasized the need to strive for small successes before total change is celebrated. Table 5 summaries the reorganization process at KBNA. TABLE 5 REORGANIZATION AT METROPOLITAN NASHVILLE AIRPORT AUTHORITY—NASHVILLE INTERNATIONAL AIRPORT (KBNA) Trigger(s) Process Used Time Frame Metric Succession Planning Rapid action teams 6 to 9 months None usedLeadership Development Source: Survey and interview results. LOUISVILLE REGIONAL AIRPORT AUTHORITY— LOUISVILLE INTERNATIONAL STANDIFORD FIELD (KSDF) 2010 NPIAS categorization Small hub Governance structure Airport authority Number of airports 2 Full-time equivalents 184 Outsourced job functions None Union No Changes in organizational structure Yes, total organization Organizational analysis Yearly Consultant No, internal analysis Time frame for change 3 years (total organizational redesign) (2003–2006) Metric for assessment Reduced labor costs because of shift to a public safety department and reduction of overall workforce Contact Charles “Skip” Miller, A.A.E., Executive Director The Louisville Airport Authority board asked the newly hired executive director to examine issues pertaining to the airport’s organizational structure, including a large number of pending retirements and long-term succession planning. The existing structure appeared to lack divi- sional continuity and identification of dysfunction in the reporting structure, and the board wanted to streamline the airport’s cost structure and optimize personnel utilization. The total transition reduced the workforce from 209 to 184 in 3 years’ time. Triggers That Guided the Organizational Redesign • Board questions about organizational structure • Need for optimization of personnel (reduction in FTEs) • Succession planning • Impending retirements • Divisional continuity Benefits of the Organizational Redesign • Staff turnover resulted in the remaining staff becom- ing more skilled and resilient. • Some previous positions went unfilled. • A cost/benefit return was realized by reducing FTEs. • Airport rescue and firefighting/law enforcement (ARFF/LE) was reorganized to a public safety divi-

17 sion with a higher level of training and job satisfaction, cross-utilization, and upward mobility. • The organization now hires more slowly and carefully. • A more beneficial culture was established during the change process. Drawbacks of the Organizational Redesign • Employee change can be emotional. • Difficult periods of adjustment occurred during the process because the divisions were not fully function- ing at the start, so they had to jump on the learning curve. • Completing the change process took longer than antici- pated, but the time spent was a worthwhile investment in the future. Lessons Learned and Sage Advice to Airport Executives • Managers need to cultivate patience, persistence, and perseverance. • Conflict is a natural consequence of change, and should not be feared or avoided; commitment to the plan and keeping an eye on the end result will help managers weather the inevitable conflicts that arise: “Even when we stumble, we are still moving forward.” • Board buy-in is essential to the process because orga- nizational change takes time. • To effectively change an organization’s culture, – Develop a committee composed of a director, representative(s) from human resources, and two authority board members; – Maintain a practical, realistic vision; – Focus on long-term goals and plans; – Be aware of financial implications, such as costs and future savings; and – Establish comprehensive employee training for suc- cession and reduction of silos. The Louisville Airport Authority went through a total organizational redesign with support from the board. The executive director was tasked to examine divisional con- tinuity between the departments. An internal group con- sisting of the director, human resource manager, and two board members was assembled to guide the change. The director used cost/benefit return and personnel utilization as a metric to hire and retain employees more slowly and carefully and build resilience in the workforce. The main challenge facing the group was maintaining core services during the transition. Having a clear vision in mind cou- pled with long-term goals and patience with the process were driving factors for success. It is imperative to stay the course and not force the change too quickly. Table 6 sum- maries the reorganization process at KSDF. TABLE 6 REORGANIZATION AT LOUISVILLE REGIONAL AIRPORT AUTHORITY—LOUISVILLE STANDIFORD FIELD (KSDF) Trigger(s) Process Used Time Frame Metric Reduction of FTEs Team of executive, human resources, and two board members 3 years—total organization redesign (2003–2006) Reduction of workforce = 25 employees Divisional Continuity Creation of Pub- lic Safety Depart- ment, reduction of workforce Succession Planning New human resources pro- cesses developed Source: Survey and interview results. SALT LAKE CITY INTERNATIONAL AIRPORT (KSLC) 2010 NPIAS categorization Large hub Governance structure City-owned Number of airports 3 Full-time equivalents 575 Outsourced job functions Human resources, ARFF, general counsel, custodial, busing Union Specialist level and below Changes in organizational structure Yes, partial departments/ divisions Organizational analysis As needed Consultant No, internal Time frame for change 1 year for single change (2010) Metric for assessment Labor cost savings Contact Randall D. Berg, A.A.E., Director of Operations In 2010, Salt Lake City International Airport (SLC) was embarking on a $1.8 billion expansion, and the airport divisions were asked to find efficiencies in personnel and resources to offset the cost of the reconstruction. The air- port purposefully implemented a flat hierarchical organi- zational structure divided into divisions. Each of the eight division directors has equal access to the airport’s execu- tive director, which enhances the organization’s flexibility and agility. As part of the efficiency effort, 50 shuttle bus drivers were outsourced from the operations department to a contracted service provider. The airport maintained com- munication with and provided equity and job protection for the employees involved in the transition, and ensured job security with increased wages to offset a slightly smaller benefit package. The transition lasted about 1 year.

18 Triggers That Guided the Organizational Redesign • $1.8 billion construction project • Need for improved personnel and resource efficiency Benefits of the Organizational Redesign • Matched employee skill sets with jobs, created job enlargement and specialization activities • Reduced the supervision ratio (number of employees under each supervisor) • Brought job titles up to date • Reclassified employees as the result of human resources evaluations; made operations/ARFF/police department more cohesive Drawbacks of the Organizational Redesign • The airfield/terminal division was divided up and ter- minal activities were moved to landside, which resulted in some natural attrition and regrouping of employees (6 to 9 months’ transition). • Some employees had difficulty with the change and with being transferred to a different division. Lessons Learned and Sage Advice to Airport Executives • Make sure the hard decisions made are right for the organization. • Leave personalities and emotions out of the process. – Be fair, honest, and equitable. – The director’s involvement should be personal and candid. – Change in structure needs to happen internally; do not delegate a redesign. • Always look for the right way to do the job, even if it makes the job more difficult. TABLE 7 SALT LAKE CITY INTERNATIONAL AIRPORT (KSLC) Trigger Process Used Time Frame Metric Personnel and Resource reduc- tion/efficiencies Operations director 1 year (2010) Reduction of force in outsourcing bussing function Natural attrition in airside/landside/ terminal operations changes Source: Survey and interview results. Operational changes at the Salt Lake City International Airport were largely complete when the remainder of the organization was asked to find certain efficiencies. There had been some regrouping of employees within operations as well as moving the busing activities to an outside service contrac- tor. As with all change, some employee issues surfaced; it is important to be fair and equitable and work with employee groups personally. Airports undergoing organizational change are urged to keep the organization’s hierarchy lean, to work with conflict as it happens, and to make decisions which are right for the organization. Table 7 summaries the reorganization at KSLC. RAPID CITY REGIONAL AIRPORT (KRAP) 2010 NPIAS categorization Non hub Governance structure City-owned Number of airports 1 Full-time equivalents 23 Outsourced job functions Law enforcement, informa- tion technology, human resources, ARFF (seven full-time), legal Union Yes—maintenance and ARFF Changes in organizational structure Yes, total organization Organizational analysis Yearly Consultant No, internal analysis Time frame for change 4 years, total change (2007–2011) Metric for assessment Workload smoothing, reduc- tion of overtime Contact Cameron Humphries, A.A.E., Executive Directors During a review of the human resource allocation at the Rapid City Regional Airport, it became apparent that in some cases individual job responsibilities and decision-mak- ing authority were too broad and in other cases too narrow, creating poor distribution of workload, required training, and skill sets. Further investigation exposed problems with the organizational structure itself: it was misaligned with its stated core competencies of safety and security, facility maintenance and repair, and administration. Under the existing structure, safety and security respon- sibilities were broadly distributed among the staff, but there was no central point of responsibility; the administration functions did not effectively support the needs of the airport and requirements of federal and state grant programs. The more technical aspects of maintenance and repair were out- sourced to such an extent that there was little resident knowl- edge: what knowledge there was resided only in employees’ memories. In short, the airport’s organizational structure did not focus employee responsibilities, training, supervision, and advancement on its core functions.

19 This 4-year change was led with several elements in mind: to concentrate on the airport’s core competencies and services delivered, to increase employee training and oppor- tunity, and to develop a set of work processes for the depart- mental employees. An overarching theme was the need to keep the process flexible, so that steps do not have to be repeated with each element of change. Broad support at the upper levels for the vision and goals of the planned change enhanced the success of the project. Table 8 summarizes the reorganization at KRAP. TABLE 8 REORGANIZATION AT RAPID CITY REGIONAL AIRPORT (KRAP) Trigger(s) Process Used Time Frame Metric Misaligned with core services External team evalu- ated job functions in maintenance department 4 years, total redesign (2007–2011) Reduction of overtime Workload distribution Director, senior staff and maintenance chiefs, and redivided workload for more efficiency in work- load and hours Workload smoothing Better training in departments Better train- ing and advancement opportunities Source: Survey and interview results. COLORADO SPRINGS AIRPORT (KCOS) 2010 NPIAS categorization Small hub Governance structure City-owned Number of airports 1 Full-time equivalents 121 Outsourced job functions ARFF Union No Changes in organization structure Yes, total organization Organizational analysis Yearly Consultant No—internal analysis Time frame for change 3 years (2003–2006) Metric for assessment Not quantifiable, what worked for the organization Contact Mark Earle, A.A.E., Aviation Director Beginning in 2003, an organizational structure change was developed by the aviation director and supported by city government. It was found that the traditional organiza- tional structure of the airport was not conducive to fostering cooperative relationships with the airport’s business partners and stakeholders, and would not meet the future needs of the Armed with this insight, the executive director began a process to better align the organizational structure with the airport’s core competencies. It was determined that the redesigned structure would (1) create divisions within the airport that aligned with its core competen- cies, (2) delegate decision-making authority and oversight responsibility for each division, (3) appropriately redis- tribute personnel, workload, and responsibilities through- out the divisions, and (4) build job descriptions, training programs, job management tools, record-keeping, and evaluation programs that support employee acquisition, training, retention, and advancement. Once the template for the new organizational structure was established, implementation began. The entire transition took place over a 4-year period. Triggers That Guided the Organizational Redesign • Poor distribution of workload, required training, and skill sets • Organizational structure not aligned with core competencies • No central point of responsibility for most important functions of safety and security • Little resident knowledge of airport systems • Limited training programs Benefits of the Organizational Redesign • Airport divisions now focus on a single core com- petency, vastly improving distribution of workload, responsibilities, management, and oversight of the airport. • A more specialized workforce now has stronger skills sets, is better trained, and has more experience to per- form assigned duties. • Employee acquisition, training, and advancement are improved. Drawbacks of the Organizational Redesign • There was employee resistance to removing empires and “moving cheese.” • Fewer generalists exist, and fewer individual employ- ees have a broad knowledge of the airport. • More cross-divisional communications are necessary to coordinate activities. Lessons Learned and Sage Advice to Airport Executives • Believe in the overall vision, stick with it, and make it expandable to avoid repeating the entire process. • Substantive change is a long-term project, so set priori- ties and create actionable steps. • Work hard to gain broad support for the plan. • Recognize obstacles and prepare for them in advance.

20 airport’s fast-growing capital development program [Air- port Improvement Program (AIP) and non-AIP]. The goal of the reorganization effort was to create a structure that could simultaneously improve the airport’s commercial and general aviation operations, develop a 1,000-acre business park, and effectively serve as landlord for a 2,000-acre Air Force base with 12,000 based military and civilian contract personnel. Triggers That Guided the Organizational Redesign • Strained relations between airport management and the airport’s primary business partners and stake- holders led to a push by city leadership to change the culture of the organization. New management was put into place, leading to a comprehensive review and redesign of the organization. • Specific factors included the need to improve relation- ships with stakeholders and business partners in the commercial and general aviation sectors, a push to reen- ergize a flagging business park development effort, and a desire to leverage the relationship between the airport and its military tenant to the best advantage for the com- munity, the airport, and the Department of Defense. • Management recognized that the airport’s future goals would involve a significant, ongoing planning and development effort that would require the creation of a new division within the organization. • A need existed to flatten the organization to improve efficiency and communications between leadership and the workforce. • Management recognized and accepted that the reorga- nization effort would involve sensitive conversations with the city regarding organizational ties between the airport and general city government agencies respon- sible for finance, human resources, information tech- nology, fleet, and other centralized services. Benefits of the Organizational Redesign • Political side supportive of change and efforts to move the airport to the next business level • Flattened hierarchy • Better internal alignment of the work units • Increased efficiency, workflow, and communication in internal and external relationships • The fact that the airport now has its own fleet and infor- mation technology divisions and administers more of its own human resources and financial management • Planning process simplified, allowing for greater oper- ational flexibility and a more focused business devel- opment effort Drawbacks of the Organizational Redesign • Negative aspects occurred only during the change pro- cess, and were not the final result. While the change process was well received internally, some divisions within the general city government were at first resis- tant to the evolving relationship. Lessons Learned or Sage Advice to Airport Executives/ Consultants • Have a clear picture of the direction of the organization and how the structural change will lead there. Keep the final goals in mind throughout the process. • Create an overall plan, but be flexible, as better approaches can evolve during the process. • Phase the plan to ease the impact on those who are going through the changes. • Ensure that political support is lined up before initiat- ing change. • Keep in mind that short-term criticism and individual resistance are inevitable reactions to change. As a result of the restructuring efforts, three assistant manager positions were created for the Operations/Mainte- nance, Planning/Development and Finance/Administration divisions. Under each of these divisions lie the functions for each unit. This internally driven change took about 3 years and was welcomed by the existing staff; it has been identi- fied as enhancing the culture at the airport. Table 9 summa- ries the reorganization at KCOS. TABLE 9 REORGANIZATION AT COLORADO SPRINGS AIRPORT (KCOS) Trigger(s) Process Used Time Frame Metric Improved relations with major stake- holders and business community Airport director with political buy-in 3 years (2003–2006) Identification of goals, new align- ment of person- nel to meet stra- tegic goalsFlatten organiza- tional structure Source: Survey and interview results.