Business Lessons from Flight Planning: Route and Strategy

Plotting the Route = Setting the Strategy

Aircrew plot the most efficient route to their destination, considering factors like weather, winds, alternates, airspace, and air traffic. In business, the strategy is the ‘route’ that delivers the vision. In other words, if the Mission is what is to be accomplished - the strategy defines how it will be executed.

A strategy isn't designed in isolation, though. Just as a VFR-only rated pilot would not plot an IFR route, a business strategy should play to a company's core capabilities and unique value proposition; and consider customer needs and sentiment, market conditions, sales processes, and the competitive landscape.

It also helps if it is methodical. In flight planning, I like to start very high-level in terms of concept - with the overall objective I'm working on. This might be a new endorsement, licence upgrade, currency maintenance - that translates into a flight designed for learning, a destination, or a trip - solo or with a passenger. I'll then flow my planning down and use a range of tools to gather information that might affect my flight.

Tools I use include:

• Weather: Windy, Bureau of Meteorology - Aviation Weather Services, Airservices flight briefing tools (E.g. NAIPS).
• Route and Destination: OzRunways, Airservices Australia Aeronautical Information Service - including charts, enroute, and terminal information; NOTAMs.
• Operational: Aircraft fuel charts, weight & balance, course plotting, communications planning.
• Plotting: E6B, ruler, compass, pencil, pen, paper!

I codify relevant information into a navigation plan, fuel plan, communication plan, and flight plan - and then synthesise this into a working document and plan for my kneeboard and electronic flight bag.

Business Planning Tools

In business, I like to do the same - start with the Vision and Mission Statements, understand our annual and long-term goal(s) - and then work to codify and synthesise high level objectives into an actionable, measurable, and communicable plan. To achieve this, I use a range of models and planning tools, including:

Ansoff's Product / Market Grid

A logical framework to plot the scope and direction of an organisation's strategic development by considering product and market mix (and geographic mix on a third axis).

The BCG Matrix

A tool used to evaluate the strategic position of an organisation's product portfolio. The 2x2 growth matrix considers market growth and market share, but I also use this framework to evaluate the attractiveness of markets / opportunities measured on the same axes.

Blue Ocean Strategy

A framework used to identify and map uncontested market space (blue oceans), as compared to existing, saturated "red oceans." Peter Thiel's 2014 book Zero to One: Notes on Startups, or How to Build the Future discusses this idyll, in identifying and exploiting a new solution that has no competitors.

Porter's Five Forces (Competitive Analysis)

A framework of five competitive forces used to evaluate industry attractiveness and the competitive environment. Understanding and positioning within these forces allows a company to make strategic decisions regarding the best defendable and most economically attractive positions.

I prefer another of Michael Porter's models: Porter's generic strategies. This framework outlines three primary strategies that a company can use to establish and defend its position in the market.

Core Competencies

The market that an organisation supplies today will probably be very different in ten years time, from both a demand and product perspective (I.e. think Apple iPhone iterations over a decade). An organisation's core competencies should transcend market sentiment, and reflect the collective learning within an organisation; its ability to integrate skills and technologies; and the capability to combine resources and knowledge to develop superior solutions. That is, a firm's ability to build valuable products by leveraging its culture, knowledge, and capabilities to identify, develop, or acquire unique assets.

I find defining core competencies to be one of the most difficult activities, as you're really focusing on the intangible competitiveness of an organisation. If you have a good model, please let me know.

Scenario Planning

A tool that helps prepare for and develop strategic optionality. Used by stalwarts, such as Shell , scenario planning can help clarify dynamics of a business environment, recognise new opportunities, assess options, and take long-term decisions.

SWOT Analysis

A framework to evaluate an organisation's position in terms of its Strengths - Weaknesses - Opportunities - Threats. Once identified, factors of internal and external control can be better assessed and potentially mitigated / exploited.

Kotler's Marketing Mix

Kotler's 7P's of Marketing helps apply a logical formula to the dark art of marketing. Defining the below can help craft an effective and comprehensive marketing strategies:

• Product/service - what product features will users be attracted to?
• Price - how much will target customers be prepared to pay?
• Place - where would target customers go to purchase the product?
• Promotion - how will target customers know about the product?
• People - how can other people help facilitate the sale?
• Process - what processes will be needed to satisfy customer demand?
• Physical evidence - how will target customers experience the product?

Discounted Cash Flow Methodology

Discounted Cash Flow (DCF) is an operational evaluation tool - a way of presenting and weighing up options based on the estimated future cash flow an investment (I.e. asset or business) will generate. DCF is helpful in deciding how to allocate capital, but relies on estimations of future cash flows, which could prove inaccurate.

These are not comprehensive, just some strategic, accounting, financial, and evaluation tools to consider. There will always be more tools than time, and analysis paralysis can happen - so it's important to keep the destination and objective in mind.