The Creative Process and Project Management

Foreword: Most people would agree powerful inspiring leaders have been on the decline. When we are in the midst of a charismatic leader there is a buzz of excitement and anticipation of good things to come.  People flock to the cause and enthusiastically participate. In the case of the American Revolution people were so inspired they often fought to the death. That was the inspiration for the Star Spangled Banner. The British amassed their entire fleet in Chesapeake Bay and laid siege to Fort McHenry. The terms of the battle was that America would fall if the flag was not flying by morning. Morning came and the flag was still there because under heavy shelling Americans went out to the pole and held it up in the face of death. Inspiration is a powerful motivator. This post discusses the creative process, project management, and inspiration.

The Creative Process and Project Management

Free market capitalism is creativity in service to humanity and the natural economy. Humans are endowed with or reflect the creator’s creativity. The American Forefathers spoke to this when they wrote into the Declaration of Independence that all humans are endowed with certain unalienable rights by the creator and among them life, liberty, and the pursuit of happiness. The pursuit of happiness is not hedonistic happiness but instead a nationalistic happiness that was derived from Emmerich De Vattel’s book, The Law of Nations. Vattel argued in Book 1: Of Nations Considered in Themselves that the government’s duty to its citizens was to ensure good economic conditions as Vattel describes the underpinnings of free market capitalism and individual creativity. Individuals are to be entrepreneurial in nature using their creativity in order to monetize innovation and invention earning just rewards while creating wealth. Wealth is created principally through private property ownership from which resources are harvested and land is improved in order to create value. Wealth is also generated through equity and interest rates. The American Forefathers co-opted Vattel's vision and built a nation. Thus, the United States was designed at its inception to promote creativity as representative democracy or the Republic is underpinned by free market capitalism. Humans are to be free to pursue their purpose in life. For over 200 years, the United States shaped the world with creativity from its people.

The early stages of project management are the creative process sometimes called initiation but more aptly called ideation. The goal of ideation is to capture the intellectual capital through a creative process then monetize the intellectual capital through the project management process resulting in some sort of competitive advantage. Projects that enrich humanity in some way are more desirable than projects that overtly favor elitist, meet regulations or compliance issues often to the chagrin of humanity.

Unfortunately, most project managers are expeditors in a runaway operation or a micro-managed internal process. They tend to handle piece parts or work packages in their respective departments or divisions or may push the necessary paperwork for the internal process of a much larger project. However, there is a small group of project managers who possess sharp business acumen. They are skilled at managing entrepreneurial styled projects from ideation to delivery. The trait that distinguishes them is the ability to inspire the creative process of invention, innovation, and change. 

Image 1: The Creativity Ball

This creative process involves the extraction of intellectual capital then developing it into a monetizable solution for planning and execution. Some people think the creative process is a formula having a lot of tools for use during the ideation phase. However, the creative process should not be formula or patterned in any way. That would be a science as Chaos Theory expressly states that the Universe is perfectly ordered and yet indeterminant. In lay terms, there is no randomness only probability. For example, the rolling of the dice has only 6 possible outcomes that is described or ordered by a statistical mathematical formula. There are no surprises – only hope for one of the six possible outcomes. Creativity is an art and about surprise or the unexpected.

No one was hoping for the smartphone outcome when Steve Jobs surprised the cell phone markets with the smartphone which was a disruptive technology that reshaped the entire market.  Orville and Wilbur Wright surprised the world with powered controlled flight when Samuel Pierpont Langley had all the resources to achieve the goal of controlled powered flight. There is a motivation behind their creative processes that are not about process, resources, or some sort of creative framework. Instead, the motivation is emotional. Simon Sinek states regarding his Golden Circle that it is not about the what but instead the why (Sinek, 2009, pp. 37-51). Sinek argues people get it wrong focusing on the what when it is about the WHY. 

People are inspired to a cause that they rally around. Therefore, entrepreneurial minded project managers are focused on the cause and are able to take the cause to task. Without the cause there is no creativity. Once the cause is established then the development of a strategy is further resolved into missions and objectives for a team of experts focus on before going through Storming, Forming, Norming, and Performing processes. Everything in the project is attached the cause.

What could the causes be? They are not focused on lining some elitist pockets with money or some sort of collectivist or socialist vision. The causes are noble and have a paradox of morality mobilizing people to a cause that is about negotiating equilibrium based on people seeking their own self-interest (Palmer, 2011, pp 45-46). Martin Luther King had a dream that mobilized thousands of people who dreamed alike. John F. Kennedy mobilized a nation to go to the moon emphasizing the freedom of choice when he said that we choose to go to the moon because we can. 

Entrepreneurial project managers must put the fire into the projects they lead. Afterall, project managers should be manager-leaders. They should make use of charisma and find the cause that ignites enthusiasm which may be different across the organization.  

References:

Norman, D. A. (2005). Emotional Design: Why We Love or Hate Everyday Things. Cambridge: Basic Books.

Palmer, T. G. (Ed.). (2011). The Morality of Capitalism: What Your Professors won't Tell You. United States of America: Jameson Books, Inc.

Schwartz, E. I. (2004). Juice: The Creative Fuel that Drives World-Class Inventors. Boston: Harvard Business School Press.

Sinek, S. (2009). Start With Why: How Great Leaders Inspire Everyone To Take Action. New York: Penguin Group.

Sullivan, P. H. (1998). Profiting from Intellectual Capital: Extracting value from innovation. USA: Wiley and Sons, Inc.

Vattel, E. (1758). Law of Nations or the Principles of Natural Law.

Reshaping the Travel Industry's Global Distribution System

This post is receiving over 900 reads. Please feel free to email me at james.bogden@gmail.com with any comments you may have.  

Typically all systems are complex and GDS is no different. Depending on a professional's station in the system, the system will look and act differently. I attempted a high-level view in a systems-of-systems architectural perspective based on the articles I read and the experience I have had. In the past, I used several systems. In the US Navy, SATO and NALCOMIS were the two primary systems. NALCOMIS was modeled after Caterpillar's global distribution and maintenance repair system. While working in aerospace, I used a system called ABACUS to track and change modes of shipment for aircraft components en route.

Supply Chain Management, SCM, involves the downstream flow of material effects and/or services to an end-user and a reverse upstream flow of money and/or warranty components. SCM, as applied to the services industry, has a slightly modified model, Figure 1. The dominant actor in the supply chain is the Service Provider.  The service supplier model may become more complex than the illustrated model as tiered service distributors and infomediaries who support the supply chain processes. The major difference from the manufacturing model is the introduction of a Commodity Wholesaler in lieu of the material wholesaler. The commodity wholesaler operates on price and availability solely at the demand point. Whereas a material wholesaler operates on contracted demand fulfillment usually fixing price for a term.  I prefer to use wholesalers upstream from the provider and distributors downstream from the provider. APICS does not distinguish between them considering the two terms synonymous.  The service provider may utilize a commodity wholesaler or go direct to the supplier. A key to the supply chain success is end-to-end transparency in order to be responsive to end-user demand and avoid forecasting errors. 

Figure 1: Supply Chain Service Model 

The Travel Industry's Global Distribution System

The principle management system in the travel industry is the Global Distribution System, GDS, which has undergone an evolution across the expanse of time; Figure 2. Four main systems have emerged; Amadeus, Galileo International, WorldSpan, and base system SABRE. There were also other smaller systems that emerged then blended back into the mix again. The wholesale of capacity is found through the four systems to which the suppliers subscribe. Each of the main systems tends to be regionally oriented.

Figure 2:  GDS Evolution

The travel industry has an interesting adaptation of supply chain management as the chain has been intensely process and logistical in the past. More recently the chain is moving towards a supply orientation. This industry provides logistical services to move humans downstream then service management activities and cash upstream. The supply aspect centers on cost-effective capacity and value-added products and services.  Most supply chains focus on only two tiers from the dominant actor in the chain.  In the case of the travel industry, the dominant actor is the travel service provider such as American Express Travel, HRG, or BCD Travel. The commodity wholesalers are in the Global Distribution System, GDS, as SABRE, Worldspan, Amadeus, and Galileo.  The chain does become a little complex with infomediaries such as Concur and Appirio to the GDS systems. The service suppliers to the GDS systems are companies that move humans via bus, car, aircraft, train, or ship as well as provide hospitality services such as hotels.   Service suppliers provide mobility services and are constrained by capacity.

The supply management methodology varies by supplier. In general, aircraft, buses, and trains have mobile capacity and demand is always in flux. These suppliers establish demand-based load capacity based on stable routes over intermediate time periods.  They can react to minor fluctuations in route demand by adding additional capacity based on short term forecasts they make and also by charters.  Most travel industry rail systems are solely passengers and remain fixed routes with variable capacity.  Cruise ships have fixed capacity, fixed routes, and rarely are used as a mode of transportation as passengers embark and disembark at the same port.  Instead, cruise ships are modes of leisure and treated as mobile hotels. Occasionally, cruise ships will terminate at a different destination.  Auto rentals are generally treated as cruise ships as auto rentals are returned to the same point of origin.  However, auto rentals may be one way as well. The methodologies used for managing capacity against demand in most cases involve multi-dimensional simplex optimization of capacity and minimization of cost.  

Figure 3: Global Distribution Systems

Note: POTS = Plain Old Telephone System.  TELCO = Telephone Company

Airline capacity planning is interesting and may be external to GDS as well as internal to GDS. SABRE offers a solution called Airspace Flow Manager which is internal to the SABRE GDS segment. Other solutions are external to the GDS system such as Quintiq, OpenPro, and GroundStar.  Airline capacity is also constrained by airport and route capacity which the application GroundStar addresses. Airlines may run capacity plans multiple times each day independent of GDS and adjust pricing in GDS based on loading demand then input the new load plan into GDS.  The reason capacity planning is often external to the online sales transaction processing of GDS is that the planning algorithm often takes a long time to execute. Current data from GDS usually feed the front end of the capacity planning then the result is loaded into GDS to adjust for the market conditions. These runs are scheduled usually during lulls of activity and are posted prior to the upswing in efforts to smooth the demand for capacity. 

Travel industry service providers then look to GDS for the available capacity but the four systems tend to service-specific regions. Services like Appirio and Concur attempt to blend the four systems into a single view yielding a global view in a cloud base virtualized environment. Once a travel itinerary is established and sold then the service providers often offer value-added services to the traveler. For example, when a travel hazard event occurs then actions are taken to optimize travel and mitigate travel hazard events through cost-effective rerouting and other changes to the itinerary.

Travel Industry Outlook

The travel industry management was built out of the airline industry which has, for the most part, divested its holding in GDS. However, the travel industry outlook can be a gauge, largely in part, by the airline industry outlook. The Atmosphere Research Group conducted a December 2012 study that was commissioned by the IATA looking ahead to 2017. The study is dated for the volatile travel industry which can turn quickly in a different direction. However, systems are stable and take time to adapt. Therefore, there is some lag in the change being effected.  The general outlook of this study stated that the airlines are frustrated by third-party sales due to the higher costs and demand lower GDS cost. The airlines have been successful at transitioning to direct sales as low-cost carriers generate more than half their own bookings. Airline executives claim that GDS sales are 20 times more costly.  The airline industry has evolving strategies that impact distribution to deal with the situation. Alliances and business models are forming in innovative ways. Of the three major airline alliances the Atmosphere Group touts that three elements influence the newer strategies:

1. Anti-trust immunity and joint ventures
2. Strategic polarization of distribution, sales, and marketing by country
3. Alliances replace individual airlines as corporate account gateways

The gist of these elements indicates a movement towards the regionalization of capacity and services as well as efficient inter-regional connectivity solution. The study goes on to indicate a movement away from a distribution focus and an increased focus on commerce or supply chain styled thinking as airline executives are more focused on results than process. This is resulting in a product-centric effort and executives are more concerned with the traveling experience. Big-data will underpin the airlines' commerce efforts making them practical and possible. The airline executives want changes to commerce systems that do better at retailing their products and services.  Services are beginning to emerge that bypass GDS such as TravelFusion and Farelogix.  Services like Concur and others are working more directly with the airlines integrating user data into comprehensive data warehouses.  The industry also appears to be organizing around value creation hubs using more contemporary software and better commerce features that are more flexible than GDS. 

Based on this study the industry is moving away from the GDS distribution process towards a modernized and responsive supply chain model that is transparent from end-to-end. This transparency, typical of a well-designed supply chain, will have the effect of eliminating forecasting errors that results in unfilled capacity.  As an outcome, the newer model will be more responsive to sales demand.  That said, GDS is making changes to become more responsive and offer additional products and services while reducing costs. The other significant cost factor is credit card fees.

The current trend appears to be that the airlines are diverting capacity to more direct web-based EDI systems before loading GDS with capacity for third party sales. In many cases after the direct sales are made, the airlines load GDS with the administrative and operational data to execute in legacy systems. With the diversion of sales away from the current distribution system towards other supply chain systems, the channel service provider will have to adjust to another business model soon. In some cases, non-GDS sales have peaked at 53% of the sales.  The change does not appear to be limited to retail although that is where the inroads are being made. Corporate travel and business-to-business sales will be impacted as well.  The challenge will be for service providers to find their place in the emerging supply chain whether that remains in GDS as the system adapts or emerges as another system entirely. At some instant, there will be a match point causing the industry to either shift or adapt to the current systems. Whatever the event, the status quo appears to be changing.

Please feel free to comment and provide insight. Please email me at James.Bogden@gmail.com

References:

APICS (2011). APICS Certified supply chain professional: learning system. Association for operations management: IL.

Lee, E. & Chacko, N. & Cruz, A. (2006) Reducing distribution costs: an Accenture webcast series. Retrieved from:  http://www.accenture.com/us-en/Pages/insight-airline-webcast-series-overview.aspx

Harteveldt, H. (2012). The future of airline distribution: a look ahead to 2017. Atmosphere Research Group. Resourced from:
 http://www.iata.org/whatwedo/stb/Documents/future-airline-distribution-report.pdf

Wikipedia (2014).  Global distribution system. Resourced from:
 http://en.wikipedia.org/wiki/Global_Distribution_System.

Original Post on 11Aug2014, updated 20Mar2015