Practical Work and Experience With Performance Management

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• Practical Work and Experience With Performance
  Management
• ICAO Performance Management Symposium
• John Crichton, President and CEO
• NAV CANADA
• March 28, 2007

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Agenda

• Unique, customer driven private company
• Why NAV CANADA measures performance
• Some examples of internal performance measures
• What we have learned about performance
  measurement
• Some NAV CANADA comments regarding international
  performance measures

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NAV CANADAS Unique Structure

• NAV CANADA assumed control of the Canadian ANS on
  November 1, 1996.
• The Companys creation was driven by its
  customers need for improved and cost effective
  ATM services.
• The Company is a completely private, non-share
  equity enterprise, funding both the 1.5 billion
  purchase and ongoing capital needs through
  publicly traded debt.
• The board of 15 represents all major
  stakeholders including 5 customer
  representatives.

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2006 Marked the 10th Anniversary of NAV CANADA

• November 1, 2006 was our 10th anniversary
• Company has been aggressive in controlling costs
  while ensuring the system remains safe and
  efficient
• The impact of our efforts can be seen in these
  comparisons to our former life

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Managing Head Count

• Year End Head Count

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Capital Spending FY 1991 to FY 2006
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A Strong Safety/ Customer Value Focus

• As a natural and statutory (ATC) monopoly,
  ensuring transparency is essential to be
  accountable to customers.
• The Company is fundamentally based on three
  pillars of value creation for our customers
• Safety
• Cost effectiveness
• Service Quality
• These pillars drive the overarching objectives
  established by our Board of Directors.

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Overarching Objectives

• Maintaining a safety record in the top decile of
  the major ANSPs worldwide.
• Maintaining customer service charges in the
  bottom quartile (lowest charges) of the major
  ANSPs worldwide.
• Implementing and maintaining a modern
  cost-efficient ANS technology platform in the top
  quartile of Major ANSPs worldwide.
• Ensuring that growth in costs of providing air
  navigation services do not exceed the growth in
  charging units, thereby resulting in a decline in
  customer service charges over the long term.
• Creating a productive and fulfilling work
  environment which places NAV CANADA amongst the
  best employers in Canada.

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Overarching Objectives Drive Measurement

• Our overarching objectives are the ultimate
  performance measures.
• All our internal measures relate to the
  overarching objectives.
• These objectives focus our performance
  measurement efforts thereby keeping the number of
  high level measures manageable.
• Having a reasonable number of measures also
  recognizes the significant resource requirements
  that can arise.

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Why Does NAV CANADA Measure Performance?

• A score card on how we measure up to our
  objectives.
• To demonstrate value to customers, or lack
  thereof.
• An early warning system to identify deficiencies
  especially with respect to safety.
• A way to rank our Company against ourselves and
  with other ANSPs around the world.
• A tool to identify areas of improvement or best
  practices

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Internal Performance Measures

• Performance measurement occurs throughout the
  Company.
• Individual managers goals are linked back to the
  Corporate objectives.
• High level performance measures focus on customer
  concerns.
• The following examples are high level measures in
  Safety, Cost Effectiveness and Service Quality,
  the three pillars.

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SAFETYIFR to IFR Losses of Separation
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COST EFFECTIVENESS Customer Costs Per Flight Hour
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COST EFFECTIVENESSFlight Hours Per Employee
15
Traffic Is Growing
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SERVICE QUALITYYYZ Arrival Delays
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SERVICE QUALITYEquipment Outages
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What NAV CANADA Has Learned

• Good consistent data based on clear definitions
  is essential.
• Data must be relevant to customers.
• Measures must be related to objectives.
• Collecting, analyzing and reporting on
  performance measures requires resources.
• Measure whats relevant not whats nice to have.
• Must avoid demand driven comparisons

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International Performance Measures

• NAV CANADAs overarching objectives require good
  international information from other ANSPs in a
  timely fashion.
• Secretariat paper is helpful but too many
  different performance indicators to be useful.
• Operational Concept has 11 key performance areas
  and more than 32 KPIs. This is too many.
• International measurement must recognise that
  different ANSPs serve different customers.
  Measures must be relevant to those ANSPs.
• Avoid prescriptive metrics.
• NAV CANADA supports the industry effort lead by
  CANSO for global benchmarking.

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Conclusion

• NAV CANADA is committed to safety, cost
  effectiveness and quality service to customers.
• Using appropriate performance measures ensures
  that NAV CANADA stays focused on customers
  concerns.
• Timely and validated international performance
  measures would be very useful for ANSPs and their
  customers.
• The development of ICAOs performance measures
  must take into account local and regional
  differences, leaving ANSPs and their customers to
  determine the measures that work best for them.