Lessons in Lean and Agility from United Airlines

Plans are worthless, planning is everything. Failing to plan is planning to fail. Everybody has a plan until they get punched in the face. These and similar adages have been repeated by strategists, generals, and prizefighters over the years. Experience teaches us every day that no plan goes exactly according to plan.

And yet this doesn’t mean that we shouldn’t make plans. In fact, studies have shown that people who form the habit of writing down their plans tend to succeed in life. But rather than anchoring our minds on specific plans, we should view them as outputs of a planning process. Plans may be good, bad, or useless. But the act of thinking through likely scenarios and how we may respond to each of them is essential for our mental and material preparation.

Learning to Fly Again

This point was illustrated by a Wall Street Journal article explaining what happened when United Airlines stopped trying to predict the pandemic. Faced with great difficulty in trying to answer if and when customer demand would return to the airline, the United executives “[…] stopped trying to predict the pandemic’s impact. They tore up the budget, cut more flights than rivals, negotiated a deal to keep its pilot workforce intact, and worked through dozens of other defensive moves.”

In this series of “defensive moves,” we can recognize a number of lean and agile thinking principles United Airlines followed as they planned how to ramp up as we exit the worst of the pandemic. We can apply them whenever we need to make plans in the face of uncertainty.

Recognize Your Threshold of Knowledge

There are times when we can make plans with a high degree of certainty. When an activity or system is well-understood, simple and under predictable conditions, we can make and rely on plans. A basic planning process is enough. We don’t need to complicate things.

The danger comes when we live for many years under relatively stable conditions. Since things have been predictable or stable, we implicitly come to believe, “This is how it will always be.” We don’t challenge the status quo and may ignore signs that things are changing. If for no other reason, we do this because it’s the easy way out. We don’t need to ask tough questions, or deny ourselves a bonus now and set aside reserves for a rainy day.

When facing conditions of high uncertainty, even our best planning discipline from normal times may not be enough. We need to recognize when we are working at or near our threshold of knowledge, beyond which is uncertainty. The article quotes United Airlines Chief Executive Scott Kirby, “We’re not going to pretend we know what demand will be,” saying why he didn’t make plans for a quick ramp up to normal demand. By recognizing this threshold of knowledge, it freed United to stop trying to make a large leap into the unknown by sticking to forecasts, budgets, and traditional capacity planning.

Level Pull

When we think we know the answers to a problem, we’re eager to start solving it. When we’re convinced we know what will sell or how much we will sell, we want to get on with building it. At the best of times, planning to push out a product or service is an act of hope and conviction. At worst, it’s a failure to hear the voice of the customer. In a highly competitive industry like the airlines, it must have been very tempting to listen to the optimistic forecasts of experts, to imagine the pent-up demand for air travel, and make plans to capture a large share of it.

Many did, and ramping back up did not go well for airlines or customers in the summer of 2021. According to the article, “Carriers that responded aggressively this summer as demand roared back experienced operational stumbles that angered customers and workers.” One might argue that they were trying to do the right thing, to meet customer demand and scale up quickly. However, it’s important to remember the lean principle that executing based on customer pull relies on the ability to level out demand to a reasonable degree.

Trying to predict and plan for customer demand is tough enough in normal times. United did the opposite. Instead of trying to maximize a potential demand rebound, they scheduled about 10% fewer flights than their rivals as they expanded during this past summer. Although their performance was by no means perfect, they avoided some of the struggles that airlines faced in trying to manage the whiplash of reducing capacity and ramp it back up again.

Pursue Multiple Countermeasures at the Same Time

Another notable application of lean thinking by United Airlines to their planning process is the fact that they pursued multiple countermeasures at the same time. This is a common approach in practical problem solving, where individuals or teams are encouraged to come up with and try more than one idea for addressing a root cause. This is in contrast to the traditional approach of problem solvers or leaders competing to put all resources behind their one best idea or solution.

Pursuing multiple strategies may seem wasteful, since it’s unlikely that all of them will bear fruit. However, experience has shown that this saves time as well as enhances learning. The article describes United’s approach in assembling a cross-functional “bounceback team.” The people came together from the airline’s operations, network planning, finance, labor relations, IT, safety, and several other divisions. They considered dozens of scenarios for slow, medium, and fast rebound of customer demand. This allowed them to think through the various “what ifs” from various perspectives.

Defer Commitments aka Keep Your Options Open

One of the most underrated ideas in lean thinking is to delay making irreversible commitments until the last reasonable moment. This is often mentioned in the context of product development, where rushed design decisions can set off a chain of events that lock in price and performance or cause expensive rework later. However, it applies more broadly to material and information flow. When we overproduce, work in a batch, or commit cash to in-process stock, we violate this principle.

In the Agile development context, this same practice is called deferring commitment. This means waiting until the last moment to make a decision. This doesn’t mean delaying all decisions until the last minute, only the critical ones. How we define which ones will vary by the nature of the context. It may be a matter of cost, design implications, or level of uncertainty as in the case of United.

This principle builds on the previous principles. We recognize that we don’t know. We set our sights on a knowable and achievable piece of customer demand, and we create several scenarios. But we don’t rush into any of them until the last reasonable moment. United chose to be cautious about adding capacity to fly, to defer commitment, in order to avoid operational stumbles and overshooting demand.

Play the Long Game

When we are focused on maximizing quarterly profit, we chase short-term demand. This forces us to consider the optimistic scenarios and make only plans that agree with the happy version of the story. We brush aside inconvenient questions, grab at un-level demand spikes, and executive one plan fast rather than multiple countermeasures more slowly. When we think short term, we violate many lean thinking principles.

According to the article, United made deeper schedule cuts than many of its rivals, and they were slower to add flights back as demand returned. By doing more thorough planning, retaining pilots on staff, and scheduling fewer flights, they hope to avoid ramp-up struggles that other airlines are facing, and grow faster when conditions improve. United is playing the long game.

Air travel is not the first industry that has faced the need to shift from a steady state industry to one having to deal with large periodic changes in customer demand, and the need to become more nimble as a result. Sooner or later, all industries are disrupted. When we play the long game, it’s inevitable that we face game-changers. When we rely on a set of proven and time-worn game plans, we likely lose. When our plans are the product of a robust planning process infused with lean and agile principles, we stand a much better chance of adapting to our new realities.

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