More Devilish Details from the World of Change ManagementPosted: February 6, 2012 Filed under: Change management | Tags: Black Belts, change management, law of entropy, Lean Six Sigma, post-merger integration, United Airlines, United Continental merger Leave a comment
In a previous post, we looked at one of a million detail from the United-Continental Airlines merger (The Devil’s in the Details). That post focused on the issue of coffee blends and systems. From one end of the spectrum of complexity all the way to the other is this example, from the same merger, of the change challenges in reconciling the IT systems and flight procedures of these two airlines. Change management is often thought of as a soft, “touchy-feelly” thing. In my experience, change management, or perhaps the better phrase to convey the essence is the management of change, is one of the short list of high-order things an organization can do and that a performance improvement professional can help lead.
In many respects, almost everything about performance improvement, in my opinion, rests under the banner of the management of change: changes in processes, procedures, guidelines, habits, beliefs, philosophies, privileges, know-how, ego satisfaction, and self-identity. If operational consistency is about the attempt to maintain stability, then the management of change is deliberately de-stabilizing an organization to effect change but keeping the instability just out of the range of gimble-lock, a catastrophic failure that seriously wounds or kills the organization.
The best Black Belts and performance improvement professionals are, in the final analysis, masters of the arts and sciences of managing procedural, technological, and psychological change. This is the terrain that United and Continental are traversing. Bloomberg News’ Drake Bennett writes:
If you want to blame someone when your United flight is canceled, blame Jim DeYoung. He oversees the consolidated network operations center, a NASA-style command room in Elk Grove Township on the outskirts of Chicago. Here, 170 staffers monitor information from the entire fleet, keeping track of speeds, altitudes, departure times, and scheduled and estimated arrival times. The network operations center determines when a plane should speed up, when it should slow down, when it should be rerouted. Day-to-day, the ops center is the airline’s brain.
For the past year and a half, DeYoung has had a second job, which is to merge Continental’s operations center in Houston with United’s in Elk Grove. Among the questions that preoccupy DeYoung and the ops center’s integration teams is the speedup-slowdown calculation. Every airline has a different algorithm to determine when a plane will go faster to make up for a late departure, and when, to the disappointment of its passengers, it will not. Flying faster burns more fuel, and fuel costs money; United burned 3.3 billion gallons of jet fuel last year at a cost of about $25,000 a minute. But being late costs money, too: Customers who miss connections have to be rebooked and sometimes put up in hotels; flight crews have to be paid for the extra time; and ground crews sit idle while they’re on the clock. The speedup-slowdown algorithm crunches all of those factors and tells the ops center when the cost of being late outweighs the cost of speed. While DeYoung won’t get into specifics—he says these are trade secrets—United’s and Continental’s algorithms didn’t always agree. One of the ops center’s integration teams is working on a system that marries elements of both.
The team’s biggest headache in the merger, however, has been combining flight information systems. Along with labor negotiations, information technology tends to be the thorniest part of an airline merger. Integrating IT dogged the 2005 America West-US Airways consolidation: When the new airline combined its reservation-and-ticketing programs in March 2007, the new system couldn’t communicate with airport kiosks, and snarls at ticket counters led to days of missed flights, delays, and angry customers. Flight information systems—as opposed to passenger information systems—present a different, more frightening, challenge. If data were to be corrupted in the switchover from two flight information systems to one, the airline could find itself without vital information about its flights—their destination or arrival times, their flight numbers, or locations. It would be like the lights going out in the middle of a juggling act.
DeYoung takes an almost ghoulish pleasure in describing the stakes. “You’re nodding your head,” he tells me, “and I’m thinking I’m not imparting just how bad this could have gone.” His eyes widen: “There’s just so much information.”
Last August the ops center’s functional integration team (its “FIT team”; each department at the new company had one) decided that legacy United’s flight information system, Unimatic, would be better able to handle the size of the merged airline’s fleet than Continental’s. At that, a second team, made up of computer technicians and ops center managers, began drawing up an exhaustive list of tests and contingency plans to ensure that the data could be combined without causing a catastrophe. DeYoung insisted that the airline’s emergency operations center be fully staffed for the data cutover—a measure legacy United had last taken in April 2010, when the Icelandic volcano Eyjafjallajökull grounded European flights for weeks.
For their final test in late October, the transition team had an empty Continental 737 fly from Houston to El Paso and back just to make sure the ops center could track it. The team had the pilots pretend to have a mechanical problem and return to the gate. That showed up in the system. Then it had the pilots change the flight number and reroute the plane to Austin to see if that showed up. It did. Encouraged by the dress rehearsal, DeYoung set a date for the transition.
On Nov. 2, just after midnight, a time when there would be relatively few flights in the air, technicians took Unimatic offline. With a couple of mouse clicks, they started flowing Continental’s data into it. For the next hour, as the technicians updated and tested the software, the Elk Grove ops center tracked United’s flights manually. That would become impossible when air traffic rose to daytime levels, and DeYoung had laid plans for a mass cancellation the next morning in case the system wasn’t up and running. At 1:23 a.m. Central Time, the entire ops center was on its feet, everyone’s eyes on the aircraft tracking screens as Unimatic went back online. There were a few small glitches—planes that had crossed the international dateline during the outage had an extra 24 hours added to their arrival time—but otherwise everything worked. Elk Grove broke into applause.
Integrating the flight information system was vital for the merger to clear its biggest regulatory hurdle: getting a single operating certificate from the Federal Aviation Administration. By the time the certificate was awarded on Nov. 30, more than 500 employees had worked on the process, paring 440 manuals—governing everything that takes place before, during, and after a flight—down to 260.
Among those protocols was the wing walker question: Continental had required two baggage handlers to walk beneath an airplane’s wings to help guide it into the gate upon arrival. Legacy United went without wing walkers, preferring to have the handlers already at the wheels of baggage tractors. As part of the single operating certificate process, a team of airport operations people had to resolve the discrepancy. Looking into it, they found that wing walkers don’t actually make planes less likely to run into things and that having workers poised to unload bags shaved 90 seconds off the process. And yet the new United went with wing walkers—it heightened the perception of safety, the airport operations team decided, and that was enough.
The last major piece of IT is the passenger information system, which is still split between two databases. As Smisek sees it, that means he’s still running two separate airlines as far as customers are concerned. “If I’ve got a United ticket and I go to what I believe to be a United agent and it happens to be a Continental agent, the poor Continental agent can’t even see me on the computer,” he says. “Or I take a Continental plane and park it at a United gate, the agent can’t handle the passengers, either coming off the airplane or coming onto the airplane. We have two different websites with two different loyalty programs.” Swipe your card at a United kiosk, and you have to wait while the machine pings both systems to find you.
Sometime in the first week of March—it’s a sign of the company’s apprehension about the move that it declines to be specific—that will change. Throughout the new United, everyone is talking about a single passenger service system—PSS, they call it—in somewhat apocalyptic tones, the way IT consultants once invoked Y2K.