The Co-Pilot Theory: How to increase revenue by throwing your tie away
Close your eyes and picture yourself on a plane. Pick up your magazine, sit down, fasten your seatbelts, put your phone in airplane mode and get comfortable. Now imagine a smiling flying attendant coming to you asking: "Would you prefer the plane to be flown by the captain or the co-pilot?". If you answer is "the captain, of course!" you may want to think again. Statistically speaking, in fact, planes crash more often when flown by the most experienced pilot. Hard to believe, isn’t it? Yet, it is true.
The Korean Air case
In his book "Outliers", journalist Malcolm Gladwell covers the story of the dangerously high ( and at first view inexplicable) rate of Korean Air plane crashes in the 90s. Data are alarming: between 1988 and 1998 its aircraft loss rate was almost twenty times higher than United Airlines. Korean Air used to have (and still does) fully functional planes, subject to periodic and accurate maintenance, together with excellent airports and crew. Yet something went wrong for ten years. Although television has led us to imagine the air disasters as episodes of LOST, the reality is that almost no air crash is due to a single exceptional cause (for example a lightning hitting the plane or an engine failure), far from it. Statistically, in fact, almost all air accidents are the results of an accumulation of several insignificant problems. The National Transportation Safety Board has found a recurring pattern in air crashes, set in seven consecutive human errors: the pilot makes a negligible error, then the second driver commits another, and so on up to seven. At that point, the plane falls down.
PDI and miscommunication
But is it possible that all Korean Air pilots were so incompetent? Let's analyze the question from a different perspective. Perhaps not everyone knows that cockpits are designed in a way that, in order to work properly, all operations should be performed by two people, dividing tasks and checking each other to avoid or correct any procedural errors. This means that cooperation, teamwork and a system of flat communication is essential for the success of any flight. What did not work, back then, in that nefarious decade in Korea? Back in the 70's, Dutch psychologist Geert Hofstede, Professor Emeritus of the University of Maastricht, formulated the theory of PDI ("Power Distance Index"). According to Hofstede, "PDI is designed to measure the extent to which power differs within the society, organization and institutions are accepted by the less powerful members". Hofstede measured this distance with tests composed of questions such as "During your work, are you afraid to express your disagreement to a superior?" PDI is, therefore, the unit to measure how much a culture, a Country or, in this case, a company, recognizes the hierarchy and relates to it. A totalitarian regime has a high PDI, while a democracy has a lower one. In the same way, a start-up has a usually a lower PDI than an established company, although some big companies like Apple or Google (which are familiar with Hofstede's theories) try to keep a low PDI.
The dangers of hierarchy
Back to Korea Air, listening to the black boxes recordings during its dark decade, you frequently encounter situations during which the co-pilot, does notice a pilot mistake, but does not dare to contradict his superior, or at least try to mitigate the message to make it less direct (but, consequently, less incisive). Now, the Korean language has six different degrees of courtesy. Six. Can you imagine the difficulty a co-pilot pilot faces trying to correct his superiors without breaking the rigid Korean hierarchy etiquette?
According to the Hofstede tests, Korea is in second place among the countries with the highest PDI. The United States, on the other hand, is fifteenth. Back in the 90's, American Airlines had 20 times lower air disaster incidence rate compared to Korea Air. See where I am going with this? In 2000, however, Korean Air fate suddenly changed, becoming one of the safest airlines in the World. What happened? No new airplanes, no higher safety standards, no mystical astral conjunctions. In 2000 the new company CEO imposed the use of the English language during all phases of the flight. Talking in a more direct language (in which there are no degrees of courtesy), the captain and the co-pilot were finally freed by the limits of the communication hierarchy and could work together properly as a team. Korean Air offered free English classes to all its employees and encouraged the team spirit.
When hotels crash too
The Korean Air example can be applied to the hotel Industry as well. Hotels with lower PDI (where employees can freely share their opinions or debate inappropriate strategic choices taken by their superior without fearing the consequences) have far better results. A wrong rate strategy, for example, can be corrected quickly and with limited damage if taken in time. Even the best GM can make a wrong assessment, and blind perseverance can lead to tragic results. A first negligible error, then a second one, then a third one, it is easy to get to the critical quota of seven errors, and now you know what happens once you reach that number. A prompt correction makes sure that a small mistake, not very significant in itself, does not turn into a disaster. This mutual control is impossible in hotels with rigid hierarchical and pyramidal schemes because even if someone recognizes an error, he will not dare to say it loud if he is afraid of the consequences. A hotel is not a craftsman studio, where all the production is in the hands of a single person but, on the contrary, it is a highly cooperative work.
My experience with PDI
In 2010, I was asked to manage a hotel in Rome that was in a critical financial situation. At the end of my first year, profit was up to 25% and the owner had enough cashflow to buy another hotel. During that year I did not fire any employee, I made no investment in advertising, no rooms update. I even went from a rather expensive PMS to an OpenSource one. I was basically flying a Korean Air plane, but the plane was finally out of the turbulence. I would like to say that I have applied some magic marketing trick or revolutionary revenue policy, but I only made two things:
1. The previous GM office was on the opposite side of the front office desk. I decided to use it as a baggage deposit and I preferred a simple chair next to the receptionist on duty;
2. I declared ties "illegal" for me and for all my employees. This physical proximity with my staff and the lack of a cultural filter (the tie in this case, or the Korean language six degrees of courtesy for Korea Air) made everyone in the hotel begin to relate with me in more informal, open way. And, more important they started to disagree with me. A lot. Correcting my errors or making me notice things that I overlooked ("There is a Depeche Mode concert next week, did you raise the price? "or" That group canceled but it is still on the PMS, can we reopen availability?") created a more cooperative environment and boosted productivity and revenue.
Lowering the PDI worked great for Korean Air, so you should really give it a chance, because if no one knocks at your office door, there are only two possible explanations: either you are infallible or you must prepare a parachute, because we have just lost cabin pressure...