Never Waste a Crisis

For the past two years, we have been managing a perpetual crisis with little to no time to think about the incredible amount of change that has occurred and continues to happen around us. No matter how you define its turning point, the COVID pandemic is one of the most significant defining events in world history. It has affected all aspects of human society and shaken the pillars of complacency, and now is the time to question our status quo. As we reflect, one thing becomes apparent. Over the years, the U.S. has lost our standing as the preeminent world leader in aviation, possibly through past complacency. That space is happily filled by countries that are rivals or at one time looked at us for leadership. It is unimportant to dissect how we got here, but we must design a better future and regain our rightful position in the world.

Mario Rodriguez, chief executive officer of the Indianapolis Airport Authority, served on the Presidential Transition Team and was appointed by three presidents to serve on the U.S. Transportation Department’s Aviation Consumer Protection Advisory Committee.  He has been awarded the highest honor in the state of Indiana and by his peers at Airports Council International.  Rodriguez is an engineering graduate of the University of Miami, attended the Harvard Kennedy School, and is an accomplished author and speaker on issues impacting the transportation industry. For more than 30 years, he has held leadership positions from Hong Kong to Indianapolis

Let us begin by breaking the perpetual cycle that sets our “Question Zero” (What are we trying to accomplish?) at odds with our industry’s approach to running our organization’s business.   Everyone will agree that our “Question Zero” centers on somehow making our communities better, whether the community is defined in geographically narrow terms such as a city or broader terms such as the nation as a whole. Making our community better can take many forms, but for this exercise, let us concentrate on the transference of value back to the shareholders of our organizations. In broad terms, we can monetize our community’s investment in these organizations by privatization or monetization through increasing “Public Value.”

The most direct and visible way shareholders, such as communities, can benefit from their investment in airports is via privatization. In that way, the monetizations can be reinvested in infrastructure and services for the community. A move toward privatization presents an essential opportunity for the airport industry and is proven to work. Airports in Europe, Asia, Canada and South America have already turned to a private model. It means freedom from an archaic system that inhibits common-sense solutions. It is important to note that today’s top airports are located outside the United States.

World-class cities and regions have world-class transportation hubs, namely airports. Federal regulators and some governance structures have placed rigid boundaries on the ability of these incredible assets to improve our communities and reach “world-class” status. In other words, these frameworks stifle rather than allow the U.S. airport industry to flourish; they limit creativity and adaptability, as with regulated public utilities. A privatization model allows for more access to capital markets for development, reduces reliance on federal funds, and creates more efficient and cost-effective organizations. Through increased privatization, commercial relationships can evolve into a more logical relationship governed by the rules of rational business sense rather than restrained by regulations. Again, today’s top airports are located outside of the United States.

Alternately, let us explore an equally powerful but more esoteric way of bettering our communities by increasing our organizations’ public value. It is evident that all airports have an intrinsic public value by virtue of their mere existence. The focus is on increasing public value beyond mere existence by aligning business practices with “Question Zero.” The doorway to our communities is a powerful tool that we can wield to provide an opportunity where opportunity does not exist, showcase local services and goods, tap into underserved communities and provide jobs with livable wages and benefits. Or it may be as simple as analyzing our choices based on economic impact determinants or viewing pricing not just as revenue but as customer service. The difficulty is not delivering public value, but instead measuring public value. Simply put: How do you measure the impact of, say, local art in the gateway to your community? And how do you do this in a regulated environment that stifles “out-of-the-box” creativity?

In our case, it is a Sisyphean struggle to continue improving our legacy of success despite archaic regulations and practices. It truly can feel like rolling a boulder up a mountain when trying to balance excellence in customer service, meaningful economic development, community engagement and sustainability in an industry that is not very well understood by stakeholders and regulators alike.

I guess when it comes to public value and excellence, the colloquial expression, “I know it when I see it,” fits perfectly.