A W 5 T ddr ash 00 F rAn ACRP eSS Service requeST ington, DC 20001 ifth Street, NW SporTATion reSeArc REPORT 20 rpACrieorsoopegpoArerrrAtCmAhtive AIRPORRITSK SIDTENRTAIFTICEATGIOINC PLAN e h d Bo RISK MPALNAANGEMENT MARPLKAENTING BUPSLINANESS MPALSATNER LANPLDA NUSE A r INSURANCE AIR SERVICE CONTRACTS FACILITIES ACQUISITIONS d RSETSAFOFUINRGCE P ALANND DEVTERLAOINPMINEGN ATN PDL AN RISK IDENTIFICATION AIRPORT STRATEGIC PLAN Strategic Planning RISK MPALNAANGEMENT MARPLKAENTING BUPSLINANESS MPALSATNER LANPLDA NUSE INSURANCE AIR SERVICE CONTRACTS FACILITIES ACQUISITIONS RSETSAFOFUINRGCE P ALANND DEVTERLAOINPMINEGN ATN PDL AN Airport Industry in the Sponsored by PW ermashPU.S the Federal it No. 897ington, DAID. Postage AAvdimatiinoins tration 0C ACRP OVERSIGHT COMMITTEE* TRANSPORTATION RESEARCH BOARD 2009 EXECUTIVE COMMITTEE* CHAIR OFFICERS James Wilding CHAIR:Adib K. Kanafani, Cahill Professor of Civil Engineering, University of California, Berkeley Independent Consultant VICECHAIR:Michael R. Morris, Director of Transportation, North Central Texas Council of Governments, Arlington VICE CHAIR EXECUTIVEDIRECTOR:Robert E. Skinner, Jr., Transportation Research Board Jeff Hamiel Minneapolis–St. Paul MEMBERS Metropolitan Airports Commission J. Barry Barker, Executive Director, Transit Authority of River City, Louisville, KY MEMBERS Allen D. Biehler,Secretary, Pennsylvania DOT, Harrisburg Larry L. Brown, Sr.,Executive Director, Mississippi DOT, Jackson James Crites Dallas–Fort Worth International Airport Deborah H. Butler,Executive Vice President, Planning, and CIO, Norfolk Southern Corporation, Richard de Neufville Norfolk, VA Massachusetts Institute of Technology William A.V. Clark, Professor, Department of Geography, University of California, Los Angeles Kevin C. Dolliole David S. Ekern,Commissioner, Virginia DOT, Richmond Unison Consulting Nicholas J. Garber, Henry L. Kinnier Professor, Department of Civil Engineering, University of John K. Duval Beverly Municipal Airport Virginia, Charlottesville Kitty Freidheim Jeffrey W. Hamiel, Executive Director, Metropolitan Airports Commission, Minneapolis, MN Freidheim Consulting Edward A. (Ned) Helme, President, Center for Clean Air Policy, Washington, DC Steve Grossman Randell H. Iwasaki, Director, California DOT, Sacramento Jacksonville Aviation Authority Tom Jensen Susan Martinovich, Director, Nevada DOT, Carson City National Safe Skies Alliance Debra L. Miller, Secretary, Kansas DOT, Topeka Catherine M. Lang Neil J. Pedersen,Administrator, Maryland State Highway Administration, Baltimore Federal Aviation Administration Pete K. Rahn, Director, Missouri DOT, Jefferson City Gina Marie Lindsey Sandra Rosenbloom, Professor of Planning, University of Arizona, Tucson Los Angeles World Airports Carolyn Motz Tracy L. Rosser, Vice President, Regional General Manager, Wal-Mart Stores, Inc., Mandeville, LA Hagerstown Regional Airport Rosa Clausell Rountree, CEO–General Manager, Transroute International Canada Services, Inc., Richard Tucker Pitt Meadows, BC Huntsville International Airport Steven T. Scalzo, Chief Operating Officer, Marine Resources Group, Seattle, WA Henry G. (Gerry) Schwartz, Jr.,Chairman (retired), Jacobs/Sverdrup Civil, Inc., St. Louis, MO EX OFFICIO MEMBERS C. Michael Walton, Ernest H. Cockrell Centennial Chair in Engineering, University of Texas, Austin Sabrina Johnson Linda S. Watson, CEO, LYNX–Central Florida Regional Transportation Authority, Orlando U.S. Environmental Protection Agency Steve Williams, Chairman and CEO, Maverick Transportation, Inc., Little Rock, AR Richard Marchi Airports Council International—North America EX OFFICIO MEMBERS Laura McKee Air Transport Association of America Thad Allen(Adm., U.S. Coast Guard),Commandant, U.S. Coast Guard, Washington, DC Henry Ogrodzinski Peter H. Appel, Administrator, Research and Innovative Technology Administration, U.S.DOT National Association of State Aviation Officials Melissa Sabatine J. Randolph Babbitt, Administrator, Federal Aviation Administration, U.S.DOT American Association of Airport Executives Rebecca M. Brewster, President and COO, American Transportation Research Institute, Smyrna, GA Robert E. Skinner, Jr. George Bugliarello, President Emeritus and University Professor, Polytechnic Institute of New York Transportation Research Board University, Brooklyn; Foreign Secretary, National Academy of Engineering, Washington, DC James E. Caponiti, Acting Deputy Administrator, Maritime Administration, U.S.DOT SECRETARY Cynthia Douglass, Acting Deputy Administrator, Pipeline and Hazardous Materials Safety Christopher W. Jenks Administration, U.S.DOT Transportation Research Board LeRoy Gishi, Chief, Division of Transportation, Bureau of Indian Affairs, U.S. Department of the Interior, Washington, DC Edward R. Hamberger,President and CEO, Association of American Railroads, Washington, DC John C. Horsley, Executive Director, American Association of State Highway and Transportation Officials, Washington, DC Rose A. McMurry, Acting Deputy Administrator, Federal Motor Carrier Safety Administration, U.S.DOT Ronald Medford, Acting Deputy Administrator, National Highway Traffic Safety Administration, U.S.DOT Victor M. Mendez, Administrator, Federal Highway Administration, U.S.DOT William W. Millar, President, American Public Transportation Association, Washington, DC Peter M. Rogoff, Administrator, Federal Transit Administration, U.S.DOT Joseph C. Szabo,Administrator, Federal Railroad Administration, U.S.DOT Polly Trottenberg, Assistant Secretary for Transportation Policy, U.S.DOT Robert L. Van Antwerp(Lt. Gen., U.S. Army), Chief of Engineers and Commanding General, U.S. Army Corps of Engineers, Washington, DC *Membership as of October 2009. *Membership as of October 2009. A I R P O R T C O O P E R A T I V E R E S E A R C H P R O G R A M ACRP REPORT 20 Strategic Planning in the Airport Industry RICONDO& ASSOCIATES, INC. Chicago, IL BOOZALLENHAMILTON, INC. McLean, VA GEORGEMASONUNIVERSITY Fairfax, VA NATIONALSERVICERESEARCH Fort Worth, TX Subject Areas Aviation • Planning and Administration Research sponsored by the Federal Aviation Administration TRANSPORTATION RESEARCH BOARD WASHINGTON, D.C. 2009 www.TRB.org AIRPORT COOPERATIVE RESEARCH PROGRAM ACRP REPORT 20 Airports are vital national resources. They serve a key role in trans- Project 03-09 portation of people and goods and in regional, national, and inter- ISSN 1935-9802 national commerce. They are where the nation’s aviation system ISBN 978-0-309-11814-9 connects with other modes of transportation and where federal respon- Library of Congress Control Number 2009941762 sibility for managing and regulating air traffic operations intersects with the role of state and local governments that own and operate most © 2009 National Academy of Sciences. All rights reserved. airports. Research is necessary to solve common operating problems, to adapt appropriate new technologies from other industries, and to introduce innovations into the airport industry. The Airport Coopera- COPYRIGHT INFORMATION tive Research Program (ACRP) serves as one of the principal means by which the airport industry can develop innovative near-term solutions Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously to meet demands placed on it. published or copyrighted material used herein. The need for ACRP was identified in TRB Special Report 272: Airport Research Needs: Cooperative Solutionsin 2003, based on a study spon- Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the sored by the Federal Aviation Administration (FAA). The ACRP carries understanding that none of the material will be used to imply TRB or FAA endorsement out applied research on problems that are shared by airport operating of a particular product, method, or practice. It is expected that those reproducing the agencies and are not being adequately addressed by existing federal material in this document for educational and not-for-profit uses will give appropriate research programs. It is modeled after the successful National Coopera- acknowledgment of the source of any reprinted or reproduced material. For other uses of tive Highway Research Program and Transit Cooperative Research Pro- the material, request permission from CRP. gram. The ACRP undertakes research and other technical activities in a variety of airport subject areas, including design, construction, mainte- nance, operations, safety, security, policy, planning, human resources, NOTICE and administration. The ACRP provides a forum where airport opera- tors can cooperatively address common operational problems. The project that is the subject of this report was a part of the Airport Cooperative Research Program conducted by the Transportation Research Board with the approval of the The ACRP was authorized in December 2003 as part of the Vision Governing Board of the National Research Council. Such approval reflects the Governing 100-Century of Aviation Reauthorization Act. The primary partici- Board’s judgment that the project concerned is appropriate with respect to both the pants in the ACRP are (1) an independent governing board, the ACRP purposes and resources of the National Research Council. Oversight Committee (AOC), appointed by the Secretary of the U.S. The members of the technical advisory panel selected to monitor this project and to review Department of Transportation with representation from airport oper- this report were chosen for recognized scholarly competence and with due consideration ating agencies, other stakeholders, and relevant industry organizations for the balance of disciplines appropriate to the project. The opinions and conclusions such as the Airports Council International-North America (ACI-NA), expressed or implied are those of the research agency that performed the research, and the American Association of Airport Executives (AAAE), the National while they have been accepted as appropriate by the technical panel, they are not Association of State Aviation Officials (NASAO), and the Air Transport necessarily those of the Transportation Research Board, the National Research Council, or the Federal Aviation Administration of the U.S. Department of Transportation. Association (ATA) as vital links to the airport community; (2) the TRB as program manager and secretariat for the governing board; and Each report is reviewed and accepted for publication by the technical panel according to (3) the FAA as program sponsor. In October 2005, the FAA executed a procedures established and monitored by the Transportation Research Board Executive Committee and the Governing Board of the National Research Council. contract with the National Academies formally initiating the program. The ACRP benefits from the cooperation and participation of airport The Transportation Research Board of the National Academies, the National Research professionals, air carriers, shippers, state and local government officials, Council, and the Federal Aviation Administration (sponsor of the Airport Cooperative Research Program) do not endorse products or manufacturers. Trade or manufacturers’ equipment and service suppliers, other airport users, and research orga- names appear herein solely because they are considered essential to the clarity and nizations. Each of these participants has different interests and respon- completeness of the project reporting. sibilities, and each is an integral part of this cooperative research effort. Research problem statements for the ACRP are solicited periodically but may be submitted to the TRB by anyone at any time. It is the responsibility of the AOC to formulate the research program by iden- tifying the highest priority projects and defining funding levels and expected products. Once selected, each ACRP project is assigned to an expert panel, appointed by the TRB. Panels include experienced practitioners and research specialists; heavy emphasis is placed on including airport pro- fessionals, the intended users of the research products. The panels pre- pare project statements (requests for proposals), select contractors, and provide technical guidance and counsel throughout the life of the project. The process for developing research problem statements and Published reports of the selecting research agencies has been used by TRB in managing cooper- AIRPORT COOPERATIVE RESEARCH PROGRAM ative research programs since 1962. As in other TRB activities, ACRP are available from: project panels serve voluntarily without compensation. Primary emphasis is placed on disseminating ACRP results to the Transportation Research Board intended end-users of the research: airport operating agencies, service Business Office 500 Fifth Street, NW providers, and suppliers. The ACRP produces a series of research Washington, DC 20001 reports for use by airport operators, local agencies, the FAA, and other interested parties, and industry associations may arrange for work- and can be ordered through the Internet at shops, training aids, field visits, and other activities to ensure that http://www.national-academies.org/trb/bookstore results are implemented by airport-industry practitioners. Printed in the United States of America C O O P E R A T I V E R E S E A R C H P R O G R A M S CRP STAFF FOR ACRP REPORT 20 Christopher W. Jenks,Director, Cooperative Research Programs Crawford F. Jencks,Deputy Director, Cooperative Research Programs Michael R. Salamone,ACRP Manager Eileen P. Delaney,Director of Publications Ellen Chafee,Editor ACRP PROJECT 03-09 PANEL Field of Policy and Planning David J. Boenitz, San Diego County Regional Airport Authority, San Diego, CA(Chair) Randall Berg, Salt Lake City Department of Airports, Salt Lake City, UT Kenneth Fullerton,Fullerton & Friar, Inc., Largo, FL Lynn Goldschmidt,D & G Consulting Group, LLC, Glencoe, IL Kimberly Kenville, University of North Dakota, Grand Forks, ND Dawna L. Rhoades, Embry-Riddle Aeronautical University, Daytona Beach, FL Burr Stewart, Port of Seattle, Seattle, WA Richard Tucker, Huntsville International Airport, Huntsville, AL Bryon Rakoff, FAA Liaison Christine Gerencher, TRB Liaison AUTHOR ACKNOWLEDGMENTS ACRP Report 20: Strategic Planning in the Airport Industry(the Guidebook) was prepared under Air- port Cooperative Research Program (ACRP) Project 03-09. The prime contractor was Ricondo & Asso- ciates, Inc. (R&A). The subcontractors were Booz Allen Hamilton, Inc.; George Mason University; and National Service Research. The Principal Investigator was Pete Ricondo, P.E., R&A Senior Vice President, and the Associate Principal Investigator was Shawn Kinder, R&A Vice President. Additional research and writing support were provided by Sebastien Carreau and Andrew Eastmond, both of R&A. Valuable production assistance was provided by Natalie Leaman and other members of the graphics design team at R&A. A large number of individuals provided vital input to the Guidebook through their participation in focus groups and online surveys; these individuals are listed in Appendix B: Contributors to the Focus Groups and Online Survey. F O R E W O R D By Michael R. Salamone Staff Officer Transportation Research Board ACRP Report 20: Strategic Planning in the Airport Industryprovides practical guidance on the strategic planning process for airport board members, directors, department leaders, and other employees; aviation industry associations; a variety of airport stakeholders, con- sultants, and other airport planning professionals; and aviation regulatory agencies. A work- book of tools and sequential steps of the strategic planning process is provided with the report as CRP-CD-73. Airports provide critical connections in the operation of the transportation system and have significant multiplier effects on national and regional economies. To meet their social, economic, operational, and environmental obligations in the face of changing conditions, airports often undergo dramatic transformations in business models, facilities, and social responsibilities. The airport industry, like other industries, is challenged when sudden or unexpected changes occur in the marketplace. Recent advances in long-term strategic plan- ning have developed sustainable methods of managing change in the presence of uncer- tainty. Yet, the strategic planning process has not been widely embraced in the airport industry. Airport professionals and members of airport policy boards can use the strategic planning process to manage these transformations effectively and proactively. Under ACRP Project 03-09, Ricondo & Associates was asked to provide a comprehen- sive, user-friendly management tool that could be used to design, implement, and under- stand the strategic planning process, leading to the development of an airport strategic plan. According to the results of the survey conducted as part of the research for this proj- ect, almost three-quarters of respondents viewed the development of a strategic plan as “a necessity” for their airport organization. ACRP Report 20sets a common process and key considerations for applying strategic planning in an airport setting. The report integrates knowledge, expertise, opinions, and recommendations of airport executives and other air- port industry professionals gained through focus group discussions, a survey, one-on-one interviews, and workshops. The report reflects an extensive outreach process undertaken to ensure that the contents reflects industry practices, views, opinions, and professional expertise from aviation professionals as they relate to airport strategic planning. This report is also closely tied to airport performance measurement, which is now being addressed by ACRP Project 01-06. The results of both projects should be examined and utilized together. C O N T E N T S P A R T 1 Introduction and Definition of Strategic Planning 3 Chapter 1 Introduction 3 1.1 Purpose of the Guidebook 5 1.2 The Guidebook Structure 6 Chapter 2 What Is Strategic Planning? 6 2.1 Definition 6 2.2 The Airport Strategic Planning Framework 14 2.3 The Key Benefits of Strategic Planning 16 2.4 The Airport Planning Processes P A R T 2 The Strategic Planning Sequence 21 Chapter 3 Creating a Process Plan and Road Map 21 3.1 Defining the Need to Initiate the Strategic Planning Process 22 3.2 Defining Specific Benefits 24 3.3 Assessing the Organization’s Readiness 25 3.4 Defining the Scope of the Process 27 3.5 Defining the Expected Outcome of the Process in Terms of a Written Plan 32 3.6 Defining the Stakeholders 41 3.7 Defining Who Should Facilitate the Strategic Planning Sessions 44 Chapter 4 Evaluating and Understanding the Organization 44 4.1 Conducting a Historical Review of the Organization 45 4.2 Reviewing Historical Performance Statistics 48 4.3 Identifying Factors Critical to Achieving or Not Achieving Previously Set Goals 49 4.4 Examining How the Organization’s Governance Structure Has Evolved (Optional) 52 Chapter 5 Defining and Articulating the Organization’s Mission, Vision, and Values 52 5.1 Mission Statements 56 5.2 Vision Statements 58 5.3 Values Statements 62 Chapter 6 Scanning the Environment and Predicting Developments 63 6.1 Internal Assessment 68 6.2 External Environment Scan 84 6.3 Tools to Assess the Future of the Organization and Formulate Strategies 90 Chapter 7 Identifying Strategic Issues, Strategies, and Long-Term Objectives 90 7.1 Identifying Strategic Issues 91 7.2 Determining a Generic Strategy 95 7.3 Grand Strategies 96 7.4 Setting Long-Term Objectives 99 Chapter 8 Formulating Short-Term Objectives and Creating Action Plans 99 8.1 Formulating Short-Term Objectives 101 8.2 Creating an Action Plan to Implement Short-Term Objectives 103 Chapter 9 Writing, Communicating, and Executing the Plan 103 9.1 Defining the Purpose and Content of the Written Strategic Plan 105 9.2 Defining Internal Communication Strategies 105 9.3 Defining External Communication Strategies 106 9.4 Implementing the Plan 118 Chapter 10 Monitoring, Evaluating, and Modifying the Plan 118 10.1 Monitoring Strategic Plan Implementation 119 10.2 Reviewing Strategic Plan Implementation and Modifying the Strategic Plan 121 Appendix A Glossary of Terms 123 Appendix B Contributors to the Focus Groups and Online Survey P A R T 1 Introduction and Definition of Strategic Planning