Scenario
You are a former Navy officer and fighter pilot who is now the controller of a division of TransGlobal Airlines, which utilizes a fleet of corporate jets for charter at several airports in the southeast part of the United States. Your division’s private charter clients include several Fortune 500 companies in the region. The Chief Financial Officer (CFO) has informed you that the company is considering the acquisition of two smaller aviation firms in the Caribbean specializing in chartered flights for luxury vacations using light aircraft (60 passengers or less). The CFO has tasked you with assessing the organizational benefits of acquiring these aviation firms.
Before evaluating these aviation firms, you want to evaluate the performance of TransGlobal Airlines.
Write a memo to the rest of the leadership team at TransGlobal Airlines, identifying strategic goals and key performance indicators (KPIs) to help evaluate the company’s performance. Use the information provided to you in the TransGLobal Airlines Company Information document to complete your memo.
Specifically, you must address the following rubric criteria:
SMART Goals: Write at least two strategic goal using SMART criteria for each of the four components in a balanced scorecard. Explain your rationale for choosing each goal.
Financial
Internal process
Customer
Learning and development
KPIs: Identify at least two KPI corresponding to each strategic goal.
Explain how you determined the KPIs.
Full Answer Section
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Goal 2: Achieve a 5% reduction in operating expenses per flight hour within one year.
- Rationale: This goal focuses on operational efficiency and cost control, essential for maintaining profitability in a competitive market.
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KPI 1: Revenue per flight hour.
- Rationale: This KPI directly measures revenue generation efficiency.
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KPI 2: Operating expense ratio (operating expenses as a percentage of revenue).
- Rationale: This KPI tracks the relationship between operating expenses and revenue, providing insights into cost control and profitability.
2. Internal Process Perspective
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Goal 1: Achieve a 98% on-time departure rate for all scheduled flights within the next quarter.
- Rationale: This goal emphasizes operational efficiency and customer satisfaction, as on-time departures are crucial for maintaining customer trust and minimizing disruptions.
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Goal 2: Implement and maintain a safety management system (SMS) with a 100% compliance rate with all applicable regulations.
- Rationale: This goal prioritizes safety, a paramount concern in the aviation industry. A robust SMS ensures the safety of passengers, crew, and aircraft.
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KPI 1: On-time departure percentage.
- Rationale: This KPI directly measures the division's adherence to scheduled flight times.
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KPI 2: SMS audit score.
- Rationale: This KPI assesses the effectiveness of the SMS and ensures compliance with safety regulations.
3. Customer Perspective
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Goal 1: Achieve a customer satisfaction score of 4.5 out of 5 on a customer satisfaction survey within the next year.
- Rationale: This goal focuses on customer experience and satisfaction, key drivers of customer loyalty and repeat business.
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Goal 2: Increase customer retention rate by 5% within the next year.
- Rationale: This goal emphasizes customer loyalty and repeat business, which are crucial for long-term profitability and sustainable growth.
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KPI 1: Customer satisfaction score (measured through surveys and feedback).
- Rationale: This KPI directly measures customer satisfaction levels.
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KPI 2: Customer retention rate (percentage of repeat customers).
- Rationale: This KPI measures the ability to retain existing customers.
4. Learning & Growth Perspective
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Goal 1: Implement a comprehensive employee training program focusing on safety, customer service, and operational excellence within the next quarter.
- Rationale: This goal emphasizes the development of a skilled and knowledgeable workforce, essential for providing high-quality service and maintaining a competitive advantage.
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Goal 2: Achieve an employee satisfaction score of 4.2 out of 5 on an employee satisfaction survey within the next year.
- Rationale: This goal focuses on employee engagement and well-being, which are critical for attracting and retaining top talent and fostering a positive work environment.
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KPI 1: Employee training completion rates.
- Rationale: This KPI measures the effectiveness of the training program.
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KPI 2: Employee satisfaction score (measured through surveys and feedback).
- Rationale: This KPI measures employee satisfaction and engagement.
These goals and KPIs will serve as a framework for evaluating the performance of our Southeast Division and identifying areas for improvement. By tracking these metrics and regularly reviewing our progress, we can ensure that we are meeting our strategic objectives and providing exceptional service to our customers.
Note: This memo provides a framework for setting strategic goals and KPIs. The specific goals and KPIs may need to be adjusted based on the unique characteristics and challenges of our division.
I recommend that we discuss these goals and KPIs further at our next leadership team meeting to ensure alignment and gather input from all stakeholders.
Sincerely,
[Your Name] Controller, Southeast Division TransGlobal Airlines
Sample Answer
MEMORANDUM
TO: Leadership Team, TransGlobal Airlines FROM: [Your Name], Controller, Southeast Division DATE: July 5, 2024 SUBJECT: Strategic Goals and Key Performance Indicators for Division Performance Evaluation
This memo outlines strategic goals and key performance indicators (KPIs) to evaluate the performance of our Southeast Division. These goals and KPIs are aligned with a balanced scorecard framework, encompassing financial, internal process, customer, and learning & development perspectives.
1. Financial Perspective