At this point, I am sure that some are saying, well that won’t happen to me, or our company. I suggest one of two things, you have been extremely lucky or you have more than likely invested too many resources in an activity that you do not do enough and the results are a ROI that you would never accept in your business.
Business metrics are an important part of effectively managing a business. It goes beyond the basics of costs, revenues and profits. One such calculation is return on investment or ROI.
ROI has many uses and can be applied to both invested capital as well as investments in human capital. The capital of the brand, people, and productivity are hard to calculate, however that does not make them any less real.
ROI also exists in the buying and selling of aircraft. Most people would not think of buying a multiple million-dollar asset without enlisting the help of experts. Most often those experts come from outside the company as the cost benefit or ROI of maintaining that expertise in-house is not attractive.
What we have seen in the aviation industry is that more and more people are realizing that the cost of hiring an expert is far less than their own in-house ROI. They do the same for their commercial real estate, or in house counsel who relies on outside legal experts in matters they do not do day in and day out. Simply put, unless your business is in the buying and selling of aircraft, your human capital resources are best utilized in other more productive portions of the business. Executives running the day to day business and flight departments managing the complexity of operations with a focus on safety.
Any business executive knows there is more than just looking at the numbers. What makes you successful is the interpretation of the facts and applying them to retain the best results. The internet has made information on aircraft more readily available, but the devil is in the details of understanding and properly applying the data.
Over the past 30+ years I have seen or heard of various executives and flight departments think they knew all of the answers and make costly mistakes. From buying the wrong plane for the wrong reasons, or buying a “deal” that really wasn’t a deal, or not finding out the real market on the new plane. We have all heard of the story of buying planes without an adequate pre buy to find out at the next inspection that they need to spend hundreds of thousands of dollars.