Finnair’s digital journey: People are your biggest asset in a constantly evolving business landscape
Finnair is one of the world’s oldest continually operating airlines and has a heritage of almost 100 years in business. On the other hand, Finnair was the first airline in the world to introduce the globe’s largest online payment platform Alipay onboard. Finnair’s Chief Digital Officer at that time, Katri Harra-Salonen, explains how Finnair is preparing for success in the coming decades in an evolutionarily accelerating business landscape.
I have been working with digital in different industries for the last 20 years and I have always been interested in exactly how we create value and how we build businesses. One of the best parts of the flight industry is that the world is constantly changing and developing.
It is especially important in this kind of environment that you know your own game and that you really know where you want to go to in the future. For the last three years, before moving onto new challenges, I have been responsible for transformation and IT organisation at Finnair.
In summary, during the past three years, we went from strategy into implementation.
When Finnair started this journey back in 2016, it had already done a lot within the digital sphere. One could say that the digital journey had already started in 1995 with something called World Wide Wings. We have a good heritage and good assets to build on.
What we did during my CDO years was to focus on our strategy in terms of transformation and not just in terms of digital. We answered strategic questions like:
How can we embrace the change around us, where digital is a driver?
How can we build our business on that?
We concluded that strategy works in the very beginning. Then we started to systematically build the enablers into a vision, which was then set to become the best intelligent travel ecosystem. This clear vision led the way forward to today.
In the beginning we started with building the capabilities that we knew we needed for the transformation. One of the first visible outcomes of that strategy was a decision that we would build an organisation that can bring in new competencies, and new ways of working. We said that we will recruit 100 digital people to work with this.
And that is what Finnair did. At the turn of the decade, we had a team of 185 people working with transformation and IT. We had formed three new teams. The first team worked with customer facing digital services and it totally renewed the way of working with Finnair.com and mobile app development.
The second team focused on transformation and supporting our business teams, from Sun Tours to Cargo, in their digital transformation. The third team guided our working with agile and looked into the digital platforms that Finnair served to clients, and ensured that it would remain competitive in the future.
Finnair now has a great combination of core IT knowledge and new digital capabilities. The company has great problem-solving individuals and teams. In the first years we built the team that would help us to build the future.
We also did a fair amount of transformation across Finnair. One is a digital platform for customers, which is, of course, the most visible platform from a customer perspective.
We also worked with many internal platforms, for example, our mobile platform that we built for our employees. This was a vital programme, and we worked alongside Apple and IBM to develop it.
We really focused on the end user, internally. We employed user-inspired design perspectives and tried to maximise the value for employees with these services. That created a new platform for our internal work, brought great engagement from employees and new ways of working from processes to maintenance and cabin crew. We created a totally new world for our employees to build upon.
Another thing that changed in those three years was the speed of change. If you think about the world today, the speed of development in the digital space and for our customers, that speed is ever-changing: it is accelerating.
Today, Finnair is in a position to keep up with that acceleration. It is utilising agile methodologies and can speed up when it comes to bringing new solutions to the customer interface.
Development and design are in the Finnair team’s own hands and whenever there is something that it perceives will bring customer value, the team can deliver it rapidly.
The speed is something that has changed quite a lot from the early days. I hope that Finnair customers really appreciate that. I know that they do, because I followed, along with the team, different kinds of numbers of usage, numbers of engagement and digital KPIs.
The three major digital KPIs we had were:
Direct in share
Digital platform users
Mobile application monthly users
We can be really happy about how our mobile application has been received by our customers. We have broken a lot of records over the last two years. The NPS figures talk for themselves. Finnair’s digital solutions have really found a profound position in our customers’ travel experience and I am delighted with that.
Multispeed digital development and agile prioritization
Prioritisation is important and you must carefully decide what you do. Everything in this area is strategic. It is necessary to have a vision about what you want to do, and you must also have a strategy outlining how you want to achieve the vision.
That was one reason why Finnair built a Project Management Office. We had a fully functioning PMO that was also responsible for our portfolio management. All our development projects within this area went to the PMO.
We ran a portfolio process to decide what we should focus on. It was a necessary tool to help us to decide which projects were, in that specific moment, the most urgent.
It is always important to work together, and very closely with businesses, and that is what we did at Finnair. Our business stakeholders were an essential part of the prioritisation process. Anything that we couldn’t solve, we took up to the executive board.
Top management is involved in making the decisions when necessary, but the main development items, or areas, were shared with the whole company. The PMO and the portfolio management were one of the areas where we progressed a great deal during these years. Also, from the technology perspective, we took a new approach and moved from planning Excels to good portfolio tools.
PMO was a really big help, but the team did not deliver just projects. Development was delivered within an agile framework. There, Finnair had its own process of agile planning and prioritisation for customer-orientated improvement.
We also had a third development group that we called enhancement, a small, ongoing, continuous development where only the biggest development subjects required management visibility. Finnair has a lot of good people who can make good decisions.
One of the most difficult things to decide is where you put your resources. Here, you need to simultaneously look at the long and the short terms. From that perspective, I think that the way we put the teams together, gave us both perspectives.
When we think about the development model, I like the approach in which the team has a couple of development models, depending on what challenge it is finding solutions for.
We run different processes, and try to find the right approach for the right kind of decision or development task. It was not always simple, but it worked well.
Modus operandi in a constantly evolving business landscape
It is no longer a world of one IT. Working together and engaging the whole organisation is increasingly important. Development speed is, of course, essential; it is the basis for everything. At the same time, if there is one thing that I am really focusing on, it is the ability to take technology into use.
Basically, we develop, but technology also needs to be used by either the customer or our internal user. From that perspective, whatever the development model is, or the company has, it needs to be well linked to its end users. Who likes or uses software if it is hidden somewhere on the shelf? We also followed up usage of internal digital services in order to get feedback and new ideas.
Finnair truly engages the end users, and includes them as a part of the development process and development model from Day One. That is an indispensable core principle for the company.
Other vitally important aspects such as quality and the testing of services must be taken into account. Testing is one of the crucial moments of any project or continuous development. That’s why Finnair, of course, undertakes testing with everything it develops.
Creativity is also essential when developing our services. It is important to bring in different perspectives, different skill sets and different ways of solving issues; because at the core of the development model sits talent. Every six months, we at Finnair run innovation sprints to create new ideas.
Whatever the operational model is, it needs to be a model that truly embraces talent and provides it with the best possible kind of environment in which it can flourish.
As can be seen, it is key for a management team to support its teams in developing and working. They must be supported in solving different issues and addressing different challenges that may surface during development. Naturally, the operating model needs to be constantly developing itself as well.
We must also have a target for the operational aspect. We do require follow-ups in order to ascertain if there is any need or room for improvement. Therefore, we have set all KPIs and measurements for different models in different ways.
We do not look at the world through only one lens. We need to think about these different models from different perspectives if we aim to reach the best quality in all of them.
It is not always easy, and the organisation requires time to understand different modus operandi. That is where communication is needed. Communication is a fundamental and vital key element in change management.
Artificial intelligence in the airline industry
We are now closer to the year 2030 than we are to the last millennium. We look into the future in many ways, and I have a very positive way of thinking about the future from a technology perspective.
Artificial intelligence and all areas around it seem to be very promising. Finnair has taken a pragmatic way of thinking about how it wants to work with AI.
When we look into our different operations today, we can see that we have AI in use in software and in parts of the system. At the same time, we wanted to look for new areas in which AI could be implemented.
We decided to move forward and experiment. We started with four different kinds of proof for concepts, and tried developing AI for our operations.
We used AI in different parts of the organisation and we thoroughly enjoyed the experience. As a result, Finnair has already put into production two AI solutions and was in the process of implementing another one at the time I transferred to new duties.
Now Finnair has AI help and support in predicting its flights. It is also handling our customer claims. In the future, AI can be utilised in areas such as people and culture as well as in our HR processes.
Finnair sees a lot of opportunities, and it has already seen the benefits of those it has already implemented. It has been an encouraging and very promising start.
How to fully personalise the customer experience into the 2020s
Aviation is a growth industry. It is important to understand this. If we look at global travel and flying, it is growing and has been growing for a very long time. That is a positive thing.
When you look at Finnair’s strategy, you realise that the company has a perfect starting point. Finnair has focused on its Asian strategy, which of course brings a lot of benefits in terms of working with the most digital markets on the globe. The company can learn a lot from them, and that is a benefit for Finnair, as Asian customers are ahead of European ones in some areas.
From Finnair’s perspective, the development model that it has chosen, and the direction in which it will take them, is a good one. Being able to serve different kinds of customers in truly personalised ways is the challenge that Finnair wants to solve.
The travellers and their profiles will change and their needs will change as well. Finnair is providing Nordic experiences and we really want to explore that area more.
Finnair wants to ensure that it is an airline that embraces technology early. This kind of adoption involves Finnair’s entire personnel. From Day One we said that Finnair’s digital team should comprise 5,000 people. Today the team is over 7,000 people. As you can see, the team is growing very well.
In addition to technology and people, strategy is a key part of any well-functioning organisation. Structure follows strategy, and it is very important to have a clear direction.
We all know that targets will constantly change, and you therefore need to be agile with strategy. However, it is just as important to have everybody aligned, and have a good basis for discussion about the reasons why we are doing something.
If you look at the future with just one kind of telescope, you miss all the other perspectives.
Finnair’s best asset is its people and their commitment to transformation and building for the future. The way its personnel has taken all the new solutions and services into use, how they are developing them and how they are giving feedback and input gives Finnair a strong foundation for accelerating into the future. It speeds operations and builds the future by combining people and technology. This combination is the winning formula.
Key findings of Finnair’s digital journey for business leaders:
Build a clear and agile strategy for the future
Digital is a strong driver in today’s business environment. That’s why every company needs to embrace the change, and, along with top management, clarify a target for the coming years. Simplify the question and answer: How do we win in a game that has no boundaries?
As the rules of the game and the target are both constantly moving, the process of forming a strategy also needs to be constantly evolving and accelerating too. The question is not only about what we do and why we do it, but how we do it and keep our pace. Moving quickly from planning to execution gives top management an additional compass and a beacon that lights the way forward.
A multispeed operating model enables enterprise agility
Project and portfolio management, agile development methods like SAFe and Scrum, and small enhancements are all needed to support various business needs. Different development methods complement each other, because, as it is well known, one size fits nobody.
It also helps if a company has already gathered experience from different development frameworks and can adjust them to its own parametres for a perfect fit. Designing a multi-speed operating model for digital development is essential for a truly agile enterprise.
Take a pragmatic way in the adoption of Artificial Intelligence
Artificial Intelligence (AI) is one of the most hyped technologies over the last few years. It is easy to say that AI can do this and can do that; but only when a company and its people have had personal experience of it, can the true potential of AI be exploited.
Start with small experiments and proofs of concept, before building your future business growth on AI. These experimentations not only give an understanding of AI’s limitations, but also reveal how much useful and high-quality data you have, or at least, where to gather that missing information.
This article was originally published in the book Surfing the Digital Tsunami.