Dynamic Strategic Planning
4.4 Concept of Dynamic Strategic Planning
its mix of products. Strategic planning in the business sense is a form of proactive, flexible planning.
Flexible Approach
Flexibility is essential. It is impractical to build now the facilities that will meet all even-tualities. For example, facilities cannot both be large enough to satisfy the highest level of traffic anticipated, yet be small enough to avoid unnecessary expenses if traffic remains steady or drops to a low level. Planners need to establish some middle course, from which they can either grow the facilities as needed, or change them if some newer or lower level of traffic should arise. Consider the case of Baltimore-Washington Airport mentioned in Sec. 4.3. It faced a sudden drop in the level of international traffic, when their principal international carrier shifted the hub of those operations to Philadelphia. Although events like this are neither usual nor common, they are well within the range of possibilities and have happened elsewhere. Good planning in that case would have anticipated this possib-ility and would have designed the international passenger building with the flexibpossib-ility to accommodate alternative traffic (Chap. 15). A flexible approach to planning and design would have avoided the difficulties associated with an underutilized building.
Dynamic strategic planning emphasizes flexibility. Its fundamental premise is that air-port operators will inevitably have to adjust their plans and designs dynamically over time to accommodate the variety of futures that may occur. This emphasis distinguishes dynam-ic strategdynam-ic planning from the traditional master or strategdynam-ic planning, both of whdynam-ich build upon relatively fixed visions of the future.
Dynamic strategic planning represents a new vision of how airport systems planning should be done. It is particularly suitable for the current situation, in which privatized lines compete in an increasingly deregulated environment, and increasingly privatized air-ports respond proactively to the opportunities and threats they perceive.
Although dynamic strategic planning is a new approach, it is entirely compatible with and builds upon the basic elements of traditional airport master planning and with strategic planning in management. It adds to the orderly process of the airport master plans by in-cluding the examination of several forecasts rather than one. It also assimilates the proact-ive approach of strategic planning, by encouraging planners to shape the future loads on the system, rather than reacting passively to whatever loads come to the airport. In short, this approach to planning represents a marriage of the best elements of both master and strategic planning, in a practical form suitable for routine use.
This new approach to planning is an extension of the master planning process outlined inSec. 4.1and detailed in standard guidelines. It differs in two ways. First, it substitutes a range of forecasts for the single forecast that the master planning process normally gener-ates. In this regard, dynamic strategic planning simplifies the process, because it avoids the difficult and unsatisfactory process of trying to choose one forecast from among the many
possible candidates. (See the discussion aroundTable 19.4 inChap. 19on forecasting.) In the subsequent phases of the process, dynamic strategic planning directs the planners to consider how each of their plans would
• Perform under the loads implied by the different forecasts
• Adapt to the new conditions these alternative scenarios represent
At this point, the dynamic plan is more complicated than the standard master plan.
However, this additional effort can be managed by the appropriate use of computer-based tools such as decision analysis and simulation, asSec. 4.5indicates.
Proactive Stance
The approach is also strategic in that it is proactive. Dynamic strategic planning recognizes that planners can influence the nature of the airport traffic. They may preclude certain types or facilitate others. For example, asChap. 14describes, the construction of the passenger buildings at Kansas City made it impractical to service transfer traffic efficiently and im-pelled the locally based airline to establish its hub in another city. On the other hand, the planners went to great lengths to plan Denver/International to service transfer traffic ef-ficiently, and thus maintained that airport as a leading transfer hub in the United States.
Likewise, the developers of London/Luton airport consciously targeted the market of price-sensitive travelers and built their facilities to keep costs low. In a similar vein, Singapore has developed its facilities to offer premium services and thereby help establish and main-tain that city as a favorite hub for business travelers. In each of these situations, the devel-opments significantly influenced the traffic at the airport. Airport planners need to recog-nize the potential relationships between the possible airport designs and the airport loads.
They should not apply a single range of loads to all possible plans, because the plans them-selves may shape the loads. Good airport planners will incorporate this reality into the plan-ning process.
Proactive planning is the alternative to the implicit attitude embedded in conventional master planning, which is that planners have to react to developments. Although a proactive approach has not been standard practice in airport planning, it is standard in business and totally possible in airport planning. The TBI Airport Management, Inc. demonstrated how this could be done in its development of Orlando/Sanford. Until around 1998, this airport had virtually no traffic and operated in the shadow of Orlando International, a magnificent first-class facility. A normal forecast would not have projected any significant traffic for the secondary airport in the near future. However, the private owners positioned Orlando/
Sanford as an inexpensive base of operations, built appropriate facilities, and teamed up with holiday tours and charter carriers. By 2000, the airport operator had built up the traffic to about 1.2 million passengers, of whom nearly a million were international. In 2008, the
airport traffic peaked at over 1.8 million passengers. The airport operator’s planning and development shaped the future, rather than responded to it. As private airport companies become more significant in the industry, proactive planning is likely to replace convention-al master planning where possible.
As dynamic strategic planning process and methods influence the type of traffic that may use the airport, analysts should correspondingly apply different loads may be applied to different sets of plans being considered. When the planning process examines airport con-figurations that favor transfer traffic, it should test them against forecasts with higher levels of transfers and of total traffic. Contrarily, when the process looks at plans that favor des-tination traffic, it should test these against forecasts that have little transfer traffic.
Most important, a dynamic strategic plan is phased. It focuses on finding the most ap-propriate initial developments. This first phase of development should permit the planners to respond appropriately to the future levels of traffic. For example, they might develop a passenger building that accommodates both international and domestic traffic in a first phase. In a later period, they could expand the capacity to serve either or both activities, or could substitute one capacity for the other, depending on the circumstances. See Example 4.1. The focus is not, as in the master plan, on describing a future long-range vision that in practice never is implemented. The focus of the dynamic strategic plan is on identifying the right initial position that permits effective responses to future opportunities and devel-opments.
Example 4.1 The original master plan for the redevelopment of Mombasa airport in Kenya anticipated two distinct passenger buildings, one for domestic and the other for international traffic. Each was supposed to be large enough to meet its level of anticipated traffic.
The dynamic strategic plan recognized the major risks that the proportion of international traffic could shift rad-ically, as passengers might come directly from Europe or transit through Nairobi. If this happened, one or the other of the new buildings might be crowded while the other was underused.
The strategy adopted was to build a single passenger building capable of serving about half the eventual growth.
This facility was equipped to serve international traffic on one side, domestic traffic on the other side, and either traffic through shared use in the middle (Chap. 15discusses shared-use facilities). This arrangement allowed the building to serve a range of mix of traffic immediately and to expand selectively in the future. It also enabled the airport to defer the decision about how much they should extend the building, for which kind of traffic. Postpon-ing that decision until traffic patterns had matured allows them to choose an expansion appropriate for the actual traffic. This flexibility considerably improves the value of the design: deferring decisions until you know what you need leads to better choices; deferring construction saves interest—and even capital costs if the traffic does not develop as much as originally supposed.
The new elements require different analyses than those involved in master planning. To do a dynamic strategic plan, the analysts need to look at many scenarios, over several peri-ods. In the twenty-first century this wider perspective can be obtained with a reasonable amount of effort. Planners can do these analyses, using computer models and computer-based analyses that simulate alternative outcomes.
Overall, dynamic strategic planning encourages planners to think like players of chess or other strategic board games. Planners should
• Think many moves ahead
• Choose an immediate development or move that positions them to respond well to whatever develops next
• Rethink the issues after they see what happens in the next phase
• Adjust their subsequent developments or moves correspondingly
Good planners for the uncertain environment of airport systems will, as good chess play-ers do, emphasize good positions and flexibility.