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Seek a Mandate

To: The Executive Director of the Zenith City Airport Authority
From: Bob Behn
Re: Saving the Airport
Date: April, 2002

Your challenge is not figuring out what to do. Your challenge is to get others to cooperate in doing it. After all, you will not be delivering goodies; you will be imposing pain.

To gain cooperation with your necessarily painful therapies, you need more than a vague request from the ZCAA board. You need the board to give you an explicit directive that provides a clear definition of success and some specific milestones along the way.

The Failed Assumption and Strategy

Bob Behn's Manager's ChoiceThe airport authority’s financial crisis is a direct consequence of the authority’s flawed strategy. And that strategy was based on a flawed assumption. Everyone who was anyone in Zenith City and West Dakota assumed that an upgraded airport would attract passengers and revenues. They were all mistaken. But their real mistake was to ignore the slow accumulation of evidence revealing their erroneous assumption.

Still, until September 11, people could continue to hope that, eventually, their assumption — and thus their strategy — would be on target. No one can believe this anymore. And for this you should be grateful. You don’t have to convince anyone that something should be done, which is often the biggest challenge.

The New Assumption

The Zenith City Airport Authority needs a new strategy based on a new assumption. And this new assumption is rather obvious: For the foreseeable future, takeoffs, landings and passengers will not grow, and financial projections and operating strategy should be based on this unpleasant reality.

Moreover, everyone understands this. Yet, I suspect that not many people are saying this so bluntly, let along publicly.

You need to do so. You have no responsibility for the previous assumption and its associated strategy. And you don’t want to let anyone connect you with these past failures. You don’t need to point fingers. That won’t do you any good. Instead, you simply need to repeatedly state that the ZCCA has entered an new era defined by a new reality that requires a new strategy.

The New Strategy

This strategy must be based on a more modest and realistic assessment of what Zenith City and the Zenith City Airport can be. The airport can’t be a driver for the city’s or the state’s economy. It can’t fill the Civic Center. All it can do is to ensure that those who choose to travel to or from Zenith City by plane are served adequately. (Do people today — whether traveling for business or pleasure — really expect an airport experience that is anything above “adequate”?)

This means you need to concentrate on keeping the existing facilities in decent shape while dropping all of the many extras. You need to create a realistic financial plan that will convince the bond-holders to restructure the debt. This requires you to balance the budget. And because you aren’t going to be able to generate much new revenue, this means you have to reduce expenditures. In turn, this will eventually require you to reduce employment at the airport.

The new strategy isn’t fancy. It’s rather obvious. Still, for it to succeed, someone needs to explain it clearly to a variety of audiences, and to then make it happen. That someone is you. And to do this, you need some very explicit support from your board.

Gaining the Necessary Mandate

What the ZCAA wants you to do in general is obvious. The board wants you balance the operating budget and erase the debt. But you need to get the board to make these expectations much more explicit. In particular, you need the board to set specific expense and revenue targets for six months, one year, two years and five years. In fact, if the board has yet to do this (and it doesn’t sound like they have), you ought to decide what these budgetary milestones should be and then ask the board to establish them, to announce them, and to hold you to them.

But why tie your own hands? Because if you don’t, you will never have the leverage to deal with the unions, with the restaurants and other vendors, and with your various stakeholders. All of these interests recognize the authority’s theoretical need to balance its budget. None, however, believes that it was responsible for creating the deficit; thus, none believes that it should be responsible for eliminating it — or even for contributing much to its elimination.

To such stakeholders, the deficit was created by the city and state’s civic leaders in general and by the board in particular. These people created and implemented the ZCAA’s flawed strategy. Aren’t they responsible?

Yes. But so are the unions, the restaurants and the bond-holders. They all benefited from the strategy — often more directly than the civic leaders. Indeed, they all supported it. They too are responsible.

To overcome the inevitable opposition, you need a clear definition of success. You need the board to establish revenue and expenditure targets. And you need the board to make these targets public. You need the board to be a full partner in the airport’s new strategy. And then you need to report periodically and publicly to the board on the authority’s progress in achieving its financial milestones.

You don’t want the board to tell you how to meet these targets; you want the flexibility to create a strategy that reflects both short-term realities and long-term possibilities. Still, to hold others’ feet to the fire, you need to be demonstrate that your feet own are being held to the fire. The budgetary milestones can create the discipline that the authority needs.

P.S.: I don’t know if you got the Zenith City Tribune and the West Dakota Chamber of Commerce to begin advocating privatization of the airport. If you did, you are certainly the person for this job. If you didn’t, you are merely lucky. For the talk of privatization will provide some extra pressure for people to cooperate with your necessarily unpleasant changes. You don’t have to weave the P-word into every speech and every meeting. As long as others are seriously advocating privatization in public, your strategy will benefit: Many people associated with the airport — for example, the unionized employees — will recognize that they will be better off with a slimed-down airport authority than with a privatized one.

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