Strategy Execution Life Cycle – Formulating and Documenting, Approving and Endorsing
Background context – A gateway airport experienced sound earnings growth over 15 years by leveraging three core business streams – aviation related business, commercial trading businesses associated with passenger movements, and property development and management of the surrounding airport buffer land. Prior to COVID-19, growth had begun to stall. The business is geographically well located but its dispersal share of the discretionary domestic and international tourist remained exceptionally low. Post COVID-19, the prevailing demand environment for all three business streams remains low.
Strategic Challenge – The government and community response to the COVID-19 pandemic has impacted dramatically near-term passenger flow and created immense uncertainty around the future trends in passenger and airline behaviour. The airport business remains highly dependent on passengers as a demand driver for its aviation and commercial trading business putting into question future earnings potential and resilience for the asset. Improving business resilience by, at the same time, increasing the share of the discretionary tourist travellers to the location while at the same time reducing commercial dependence on passenger numbers were the dual objectives of the strategic review.
Strategic Activities – Due to public health restrictions on movement to deal with the COVID-19 pandemic, the entire strategy syndication process was undertaken in a series of virtual workshops with key management personnel of the airport. Workshops focused on defining the gap between a desired future state and the current state and identifying the sort of activities required to bridge the gap. Importantly, understanding the co-dependency between the business streams ensured that targeted strategic themes were approached at a Group rather than business stream level.
Outcomes – A new strategy framework was syndicated with Executive leaders and documented in a series of Board papers and presentations for debate at the company’s annual strategy workshop with the Board. The strategy framework was endorsed by the Board. The Executive team are aligned around a three-phase execution plan and is proceeding into detailed planning.