14th February, 2020
Ai Editorial: Airlines and even organizations from other sectors in their journey of agile transformation show common characteristics. Plus, there are common pitfalls and challenges to learn from too. Ai’s Ritesh Gupta evaluates the same.
For organizations focused on agile transformation, there are certain common guiding ethos. They revolve around continuous learning and adjustment, there is collaboration among cross-functional teams and development teams iterate towards optimal outcomes by developing new solutions incrementally.
Concepts like Agile Scrum methodology (a disciplined way to solve a problem) and Minimum Viable Product (MVP) are integral to what is underway to deliver business value faster. Be it for an airline opting to run two different tracks, including the new one for being a part of today’s digital economy, or paving way for the entrepreneurship mode via a venture capitalist arm, airlines are moving along.
Are airlines showing signs of taking the leap into the future, combating organizational/ cultural defiance, limitation of this industry’s legacy technology and operational silos? What there is to learn from the initiatives taken by the likes of Ryanair, AirAsia, JetBlue, KLM, Etihad etc.?
Leadership and internal alignment: Of utmost importance is senior management involvement and clearing stating the plan going forward. In case of American Airlines, the team asserts it is playing an infinite game. Transformation is reflecting in areas, where the passenger experience generally has been stifled by old methodologies. Any undertaking of this magnitude needs to be top-down driven, with incisive leadership laying an astute foundation. The executive leadership must own the same. Then work it through the entire organization, break down the barriers for the working group to act on it. Not a straightforward task when one considers that an establish carrier tends to feature over 50,000 employees and in certain organizations, even over 100,000. It is vital to strengthen the organization with the right skill-set, as shown by Lufthansa Innovation Unit in which the team mainly comprises executives from the start-up ecosystem.
Learning and adapting: As retailers, airlines are keen on expanding the basket of offering and changing the approach as well. An organization of Lufthansa Group’s stature is clear that just selling a flight ticket and air ancillaries isn’t enough. The group is interested in understanding consumption patterns, for instance, the superapp model in Asia, as it believes the travel chain is now an infinite, relational loop, rather than being a linear one. For instance, how Didi and Grab are building on the mobility use case.
Data alone isn’t enough: As shared by an ex-CEO of a hospitality technology company, data alone cannot facilitate the process and pave way for desired results. Rather accessibility, acting on it, customer support, training, backing employees and ending up with the development of a customer-centric culture is key.
Benefitting from cross-collaboration with a structured approach for every department: A particular department (for instance, one responsible for payment optimization) interacts with other teams on a daily basis, but not without putting the requisite infrastructure and mechanism in place that paves way only the relevant team and system coming into the play. (How KLM agility is playing its part in payment optimization at KLM)?
Doing away with process-centric approach: When there is supposedly an ecommerce/ digital business sitting under the same roof as the operational business it tends to be get slowed down, caught up in procedures and processes that weren’t designed for nimble and disruptive growth, but were rather designed for operational delivery, regulated delivery where it not about speed, but it’s about accuracy, and quality and safety. So it is imperative to let the e-commerce team to functional independently, and capitalize on the digital/ data economy wave.
Organizations like Etihad and Lufthansa have worked on ways to counter internal barriers, especially ones that are associated with operating in silos. Encouraging employees to learn, adding staff with new skillsets, counting on the proficiency of self-organizing cross-functional groups, and speedy learning via shorter cycles is a common approach to agile transformation.
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