Metrics that matter.
Metrics that matter.
My last flight was nothing short of a saga. A flight scheduled for 4:00 PM from Atlanta Airport turned into a marathon of delays, extending well into the wee hours of the morning. By the time they called off the flight at 4:10 AM—just after all hope of finding a hotel room was lost—my patience had worn thin. Rebooked for a 9:00 AM flight, I found myself stuck staying up in the airport for another five hours, surrounded by a chorus of disgruntled passengers. Each additional delay was met with a collective groan that echoed through the terminal. If I wasn’t consumed by sheer frustration, I might have found it comical.
Eventually, after an array of delays and reroutes, I made it to my destination. But the hours spent stranded in airport purgatory got me thinking—why are airlines getting it so blatantly wrong? And so, my airport adventure transformed into rage researching airlines KPIs. Do they measure customer experience, on time arrivals, or complaints?
They had a real situation in that terminal in Atlanta, and I wanted to know if anyone would ever know about it. It turns out that the good ol’ US of A Department of Transportation did know about it.
Airport Karen’s Unite!
In 2023, complaints against U.S. airlines more than doubled, increasing by 109% from January through May compared with the same period the prior year. Despite a 14% rise in passenger numbers, complaints soared not just for U.S. airlines but for the entire industry which saw a 68% increase in complaints. Nearly 35% of these complaints were about flight problems such as cancellations, delays, and missed connections, (no surprise to me here) while 20% were related to refunds. This alarming trend highlights a critical issue: the metrics airlines are currently using to measure performance might be driving the wrong behaviors.
Careful that you measure, it might just come true.
In an effort to improve on-time performance, some airlines focus narrowly on metrics like the percentage of flights departing on time. However, this can lead to unintended consequences, such as canceling significantly delayed flights to maintain favorable statistics (Woah, this rage research is narrating my experience as it happens…weird.). This practice, while beneficial for the KPI, leaves passengers stranded and significantly increases dissatisfaction.
Was I happy at 3:30AM when my flight was delayed for the 11th time? No. Was I happier with the 11th delay than I was with the 4:10AM cancellation? Yup.
Of course I can’t know if the specific metrics of the airline I was flying with, but it felt like they were measuring on-time flights and our flight ran too late past their metric threshold and instead of putting the plane in the air, they cancelled it so the clock could start at 0:00 again. This decision ultimately harmed my customer experience.
Measure metrics that matter.
To truly improve customer satisfaction, would airlines be better off focusing on the underlying causes of delays and cancellations? One interesting nugget I read suggested a significant factor affecting on-time arrivals is the time of day a flight departs. Flights leaving at 6:00 AM are 30% more likely to arrive on time than those departing at 6:00 PM, due to the compounding effect of delays throughout the day.
So are leaders in the airline industry prioritizing the optimization of flight schedules and managing turnaround times effectively? If an airline knows a flight is running four hours late, one might think proactive measures should be taken to minimize further delays once the plane arrives at the gate. Perhaps a roll-up KPI would be prudent to measure plane turn-over time optimization and proactive schedule adjustments, improving overall on-time performance.
It isn’t just sky busses that run behind.
The airline industry's challenges are not unique. The Wells Fargo scandal, where employees opened unauthorized accounts to meet aggressive sales targets, and GE's over-reliance on earnings per share (EPS) as a success metric both highlight the dangers of misaligned KPIs. In these cases, the focus on specific metrics drove unethical behavior and short-term thinking, ultimately harming the companies' reputations and long-term performance.
Similarly, Amazon faced criticism for using the "time off task" (TOT) metric to track warehouse workers' productivity, leading to unsustainable work paces and poor working conditions. These examples underline the importance of setting balanced KPIs that consider long-term goals, safety of employees and consumers and ethical standards.
Metrics that Matter.
Airlines and your organization alike can avoid these KPI pitfalls by adopting a more holistic approach to performance measurement. Here are a few strategies:
Align KPIs with Customer Experience: Ensure that KPIs directly relate to improving the customer experience. For airlines, this means focusing on reducing delays and cancellations, not just maintaining favorable on-time statistics.
Use Multiple Metrics: Rely on a range of metrics to get a comprehensive view of performance. Combining on-time departure rates with customer satisfaction scores, refund processing times, and complaint resolution rates can provide a more balanced picture.
Proactive Issue Management: Implement systems to identify and address potential delays early. Real-time data on flight statuses and proactive scheduling adjustments can help mitigate cascading delays throughout the day.
Trial and Monitor KPIs: Introduce new KPIs on a trial basis and closely monitor their impact. Adjust as necessary to ensure they drive the desired behaviors without unintended negative consequences.
By adopting these strategies, you can create a performance measurement system that drives the right behaviors, leading to improved on-time performance, reduced customer complaints, and a better overall customer experience. Maybe our friends over at the airlines can do it too?!
KPIs are powerful tools that can significantly impact organizational behavior and outcomes. However, when misaligned or narrowly focused, they can drive unintended and undesirable behaviors. For the airline industry, focusing on the right metrics, such as optimizing flight schedules and turnaround times, can lead to better on-time performance and enhanced customer satisfaction. Leaders across industries can likewise design KPIs that support long-term success and positive customer experiences.