HEMS Roundtable. Low friction service transitions.

HEMS Roundtable: Low friction service transitions for HEMS & Air Ambulance transitions

In this HEMS Roundtable, the panel discuss some of the ways and means of conducting low friction service transitions for both Air Ambulance and HEMS operations.

Transcript of the video

Scott Thanks Glenn – it is a good question and I’ll not name names but all three occurred because the incumbents were not meeting the KPI’s that were required and in two case the financial viability of the operator was in doubt. This placed the customers in all three case in a situation that they needed to substitute the operators quickly, in a low friction way, and do so without compromising the operation. After all, KPIs in our business are not just numbers, they are potentially people’s lives.

Glenn.  You mentioned low friction. What does that actually mean?

Scott.  Perhaps I can start and then I’ll bring a few of the team in.

Nearly all of our clients rely on aviation to achieve something, however the vast proportion of them don’t want anything to do with the complications involved with it. They rightly expect an asset to be there, at the allotted time to do its job of work. It is up to us to do that. In this sense a ‘low friction’ transition is to make sure that happens in a seamless, barely noticeable way.

Ian .  As Scott alludes to in his answer, the key is ‘low friction’ regardless of the magnitude of change. For example, our transition to take on the rotary side in Scotland required us to stand up the flight crew, engineers, aircraft (with the required HEMS fit), as well as an addition to our AOC, an addition to our engineering approvals, a new supply chain, plus all the associated training requirements, not to mention the build of a new £1million facility in Inverness, all in just short of 18 months.

But it was definitely ‘low friction’ – as at no time was the service interrupted – one day the service was provided by one supplier and the next it was supplied by us. That in itself was a huge success, but even more so because the last few months of the transition and go live took place during the start of the pandemic. We went live on time at 07:00 on 1st June 2020. Much of this is testament to the project planning process.

Glenn. On that note, Neil, perhaps you can talk about the planning of the transitions. What are the key dimensions & pacing items for a low friction transition?

Neil   That’s a big question so let me break it down. Some of this appears to be common sense but it’s vitally important to understand that the definition (or planning) stage of a transition programme is where most of a project manager’s efforts are focussed.

1. Understanding and capturing the transition requirements is the cornerstone. This allows us to derive the project deliverables and required project scope. It drives the project team’s understanding of how the project must be structured to meet the requirements and project scope
2. We’ve established our deliverables, next we need to define how, and by who. We need to assign to the transition programme the right resources with distinct responsibilities. This includes mapping the right experts to help define what activities must take place, and establish a governance and escalation structure to oversee the delivery
3. We capture what we know in the project management plan, documenting the scope, schedule, cost, risk, quality and resources. We use well-established techniques and templates to ensure the process is efficient. This forms what we call our deployment baseline, which we use to track progress against.
4. Time should be spent mapping our key stakeholders. That is anyone who has an interest (be it internal or external) in the project. Hearts and minds is really important particularly if change is ‘breaking’ strong bonds and affinities to a way of working. This is true in the relationship between the TCMs, clinical team and pilot. Beyond the operation, powerful stakeholders sit within our communities and their concerns need to be heard.
5. Communication must be clear and provide the entire team with the situational awareness required to manage the complexity. The collective team must pull in the same direction and gaining clarity on the aims and objectives of the programmes is key
6. Use the transition as a chance to fix & optimise. It is a missed opportunity to replace like with like. Creating marginal gains, addressing performance niggles need to be address during transition – there is no easier time – and they can make a big difference to stakeholders getting onboard with change.

Glenn. But Neil it is more complex than that surely?

Scott.  Neil, perhaps I’ll take that one. The answer is ‘yes’ – but without those five items in place, in our experience, you’re not going to achieve a low friction transition. I can’t stress enough that changing machines from one thing to another is easy – complex, human relationships and loyalties is much harder, but the results of getting it right as we have seen in all three of the contracts we have transitioned is transformative and very do-able in tight timeframes.

Andy.  That was certainly our experience with the flight crew and the relationship with the TCM’s and clinical team in Scotland. There was a sizable proportion of doubt about our abilities as a rotary operator at the start but by the end we’ve got a great team in, working with the customer to make improvements and the operation is working better than it ever did.

Glenn.  Let me bring it back to the ‘low friction’ point, as I want to get into the detail of this and address specifics. Let’s look at the three areas aircraft, locations & people.

Scott.  I’ll start and bring my colleagues in…

• Contract. Actually, the first thing to look at is the terms of the current contractual arrangement, not the commercial terms, but the nature of the exit that is provisioned within the contract. This has implications for the TUPE process and employers liability information i.e. TUPE on exit provision. The other crucial elements pertain to the aircraft ownership and the conditions expected at hand back if the aircraft has been provided to the operator. This is a crucial point – in a couple of contracts we have found the aircraft to be in a poor state but perfectly capable of delivering the service so the customer was oblivious to mounting issues. Having aircraft handed back in the appropriate condition is a specialist task – one that we have the group resources to deal with.
• Locations. Again, within the contract, ownership of locations, spares inventory, tooling, ground handling machinery – and the rest of the infrastructure required needs an almost forensic going over. Who owns what and determining the gap if crucial for low friction transitions.
• Aircraft. As we’ve discussed with a number of the charities there are variations on ownership. Ideally the charity owns the aircraft, if so then we have a simple situation. More often than not the aircraft is leased which again can be complex depending on lease hand backs, the overall contract, etc. Some are owned with a relief aircraft leased. All of these circumstances are resolvable however the pacing factor becomes replacement aircraft if the lease cannot be taken over. Good, pre-owned HEMS aircraft are not easy to acquire and new aircraft can be 24-18 months away. The most important aspect I’d suggest is start to plan ahead, don’t let the aircraft box you into a supplier contract because you can’t see a way out. Talk to us and we’ll help you look at the options – we have a whole business that specialises in lease returns, etc.The other area to look at is the aircraft records, maintenance planning and maintenance prior to transition. Independent verification can be important so that the records align to the aircraft and all equipment on the aircraft is as it should be. Again, we have a business that does just that and have saved large amounts on lease returns, purchases and maintenance monitoring simply by digging into the records and checking, at a almost forensic level the details.
• People – probably the biggest area here is TUPE the preservation of employment on existing terms & conditions of employees, whose jobs are affected by a provision change. In some cases, TUPE has successfully worked, in fact our Clinical team is a great example of that and we are really pleased to have a great cadre of people who do great work. In other cases, you are left with no-one, however that is also an opportunity to reset should a team not want to transition. A few years back when there was a large pilot shortage this created some difficulty, that is not the case now particularly as we are an active recruiter, with interesting roles and good benefits

Glenn.  I want to bring in Andy into this. Andy, what about pilots, training regimes and the fact you could be left with nobody from the TUPE process. How does this work? Surely that is a large risk?

Andy.  Yes, it is. TUPE can leave you with nobody and in fact in Scotland it did. We also have a classified programme that also had a similar challenge. However, these challenges are known / knowns – they are manageable risks that where clearly identified in the risk log that Neil meticulously kept. So we had a plan which was enacted and actually I think we got to a better place.

Why?

We had people that wanted to fly for us and wanted to be part of a new HEMS team. They came from a wide range of backgrounds all of which we meticulously vetted. However, those backgrounds helped us make small changes to deliver the marginal service improvements that we set out to attain. Change can often be seen as a negative, but I don’t think it is. You get better through change.

Glenn.  Ok, I understand but what about the training – you’ve got a body of people that need to be trained, a new set-up and no aircraft how do you square that circle?

Andy.  Again planning. We planned for the likely eventuality that TUPE wouldn’t assist us. Therefore, we needed to make sure the delivery of the aircraft dovetailed into the hiring and then subsequent training of not just the pilots, but the TCMs, clinical teams, engineers and ground handlers. It is complex but with the PM team we have tightly orchestrating and nudging us along we deliver.

Ian.  Glenn, I want to add in here that you have also got to consider the macro-picture. We are an aviation services company and have been doing this for nearly 40 years. While we are talking about HEMS / Air Ambulance here we are almost constantly transitioning teams and assets from Boeing 777’s for a major lessor, to a $70m Gulfstream G650ER to a military ISTAR assets. Each programme is different, and I don’t want to give the impression of a cookie cutter approach but on each one you learn and those learnings you take to the next programme. In all cases though, we are dealing with people and companies that are intolerant of late delivery – so it makes you sharp!

Glenn.   I want to conclude by going back, to the start and looking at why transitions come about, what are the factors involved and why they are triggered.
Scott.  I don’t think this is solely related to the topic we are discussing. In my experience working in service organisations it usually falls the following categories:

• Chaotic service interruption. This usually happens as a consequence of the service provider having cash flow / financial problems (a particular feature of this particular economic crisis) and it simply can’t operate. Mercifully this doesn’t happen often but when it does it leads to a chaotic transition which is painful for all parties. Really the only mitigation which we have been providing to a few within the sector is a ‘in case of emergency break glass’ plan. I would imagine most CEO’s have this as a requirement of their risk mitigation.  Our last two air ambulance transitions were of this variety where the incumbent had financial troubles and we stepped in.
• Change of ownership. Take-overs, sale, PE involvement can change the delivery partner and create uncertainty and service delivery problems. Like the chaotic service interruption, it is hard to mitigate and similarly to it all you can do to mitigate it through a plan B. This will be hard to initiate a change as often unless the service has substantially degraded, there is unlikely to be suitable break clauses that can be enacted.
• Consistent service failure & managed transition. A consistent degradation of the service that allows the contract holder to invoke a break clause, which allows for a managed transition under the contract notice period. This is a clean break which allows both sides to establish the terms of exit and entry into service. Often there can be a few shenanigans between the incumbent and the new, but these are always resolvable allow for a low friction transition.
• Managed transition post tender. Probably the most common form that we come across on both sides. It is usually acknowledged that in a fair fight the best submission won in which case the transition should be manageable. That said the shenanigans over the details can occur which can at times require intervention. Contractually this is a very clean break and a great opportunity to reset for the future.

Glenn.  Thanks Scott, my impression is that the preference is for the latter two?
Scott.   Yes but it rarely works that way. I think regardless of the situation we’ll always work with the parties to ensure that we do everything in our capability to meet the entry into service date, in a low friction managed way.
Glenn.  Thank you Scott. We are out of time on the roundtable but I wanted to invite questions from the floor. Please unmute, ask your question, and then remute.

Over to you.