Jordan Hansell makes connections, sets a common vision at NetJets

When owners invest in shares of NetJets’ fractional program, they want to know the company will be around long term and that it has the money, resources and inclination to spend what’s necessary on safety.

Hansell says the company has six operating principles and two of them are never balanced against other business needs — safety and integrity.
“Warren (Buffett) has told us to spend whatever it takes to be as safe as possible, and then spend whatever it takes to stay that way,” he says.

That doesn’t mean NetJets spends money foolishly on things that aren’t going to add to safety.

“If we can show a demonstrable benefit (and) it’s within human reasonability, we will do it because we want to make sure that we are taking every step possible to be as safe as we can be,” Hansell says. “And if the profits suffer for that, then the profits suffer for that.”

Planning for the future

Another key to NetJets’ longevity comes from a robust planning process. Once a year, on a rolling basis, the company looks ahead 10 years, even if that’s sometimes hard to do.

“Lots of people I discuss that process with think we’re crazy and ask the logical question of how one could possibly predict 10 years in advance, and the answer is, one cannot,” Hansell says.

“But we create the plans to give us a sense, particularly at a higher level, of how we think the world is going to be. It forces us to be forward-looking.”

Even if the strategic planning is off base at times, the fact that it’s even in place is beneficial.

“The advantage of having thought about it is that when we’re wrong, it becomes apparent to us earlier rather than later, and we’re able to respond more effectively,” he says. “It also helps us from a pretty significant standpoint to get what is a global organization on the same page.”

In addition, the plan is always adjusted, based on factors like predicted gross domestic product growth, regulatory change, the tax environment and predicted demand. When NetJets acquired Marquis Jet in 2010, Hansell says the company had to make some significant shifts in its plan.

Internal and external forces are always at play.

“And it can affect anything from facility choice and location, to number of team members we think we need in what areas and performing what functions, and how we’ll operate the fleet in order to achieve the maximum efficiency,” he says.

But making time to look beyond immediate problems — and step back and ask whether you’re doing the right things in the right fashion — is critical for business leaders who are in strategic decision-making positions and higher managerial roles, Hansell says.

“Otherwise, we simply become reactive to whatever the most recent stimuli is, and that’s no way to run something as large as we are,” he says.

International expansion

Expanding internationally provides an invaluable avenue for growth, but it can be complicated and frustrating.

“It’s always an interesting ride, particularly the international growth, because one deals with different regulatory environments, regulatory cultures, buying cultures,” Hansell says.

Roughly 25 to 30 percent of NetJets’ business is done at operating bases outside the U.S., with an additional 10 percent from the U.S. to international locations.

In order to maintain a global culture, NetJets is the operator at all of its locations, because Hansell doesn’t want to sacrifice the company’s identity simply to expand.

“In fact, we like to pick joint venture partners who are not necessarily in the aviation industry,” he says. “Partly the reason for that is because we like to be able to extend our safety culture and operating environment, and we don’t think it’s productive to get into a debate with somebody who may have a different view of those things.”

This does slow things down, but it’s important to the company. Most recently, expansion into China for the first time has been slower than normal.