Airport Innovation: 7 Easy Ways for Airports to Innovate

Innovation is today’s uber-hot bandwagon. Chances are, your organizational chart has sprouted a branch dedicated to Innovation, and if it has not, it soon will. But is the formation of an innovation team sufficient to shift the status quo? Today, I explore 7 easy ways for airports to innovate.

Critical Success Factors

Everyone wants to innovate, although this was not always the case. Prior to the 1950’s, tradition was valued more highly than novelty (see diagram below). During this time, commercial success was founded on the notion of creating, and maintaining, a single competitive advantage.

The collective effects of the digital revolution, globalization and erosion of barriers to entry have made it harder for any organization to stay in the lead for too long. Without an innovation pipeline [1], or the active commitment to ongoing research, development and generation of new ideas, one can expect to be overtaken in the race for market share and profitability.

What is Innovation?

Innovation is a process by which new ideas are converted into economic value. In general terms, innovation falls into two broad categories: evolutionary and revolutionary. Evolutionary innovations make an existing product or service cheaper, faster, more exciting, more profitable or more valuable.

There are many examples in Aviation: the emergence of eco-friendly and locally-sourced eating options replacing fast food eateries at airports; more comfortable seats in business class; the introduction of premium economy class; improved passenger apps; online and mobile check-in. All of these advances stem from ideas that have made the passenger experience better than it was before.

Revolutionary innovations, on the other hand, totally change the game. The creation of the jet engine; introduction of low cost carriers; the Dave Carroll phenomenon; and the proliferation of mobile technology have each radically changed the nature, and sources of revenue, in the aviation industry.

Although innovation is an emerging trend in aviation, as a practice, it is far more established in fields such as Design or Technology. In these areas, the processes by which new ideas are converted to commercial value are well established, rendering them far less dependent on individuals and thus more able to deliver consistent results.

In the last three years, I have been involved in a research project at an independent research organization in Australia called National ICT Australia Ltd (NICTA). Our team was tasked with distilling the factors that contribute to innovation, organizational growth and success.

We learned that in most teams, the delivery of novel solutions had very little to do with the skills of the individual players or the formation of a unit dedicated to this task. Consistently, the projects that resulted in successful outcomes shared seven key characteristics. Becoming aware of these, and including them in your innovation strategy will help your innovation team shine. Here they are:

# 1: Not Every Idea is a Great One

Although most organizational leaders outwardly support the notion of innovation, many are not able to reconcile that the pursuit of new ideas is directly associated with risk. True innovation can only happen if there is an honest and open acceptance of failure: not every idea generated will be a good one.

Although this is easy to understand from a logical perspective, it is much harder to operationalize.

Traditionally in Aviation, the position of first (second or, ideally third) follower has been considered more desirable than that of being the originator of a new concept. It is far safer to let someone else try it out first, and copy their practices only if they succeed. At face value, this reduces the chances of project failure, however, it also creates an obstacle to real innovation.

# 2: Be Proactive

When explored more deeply, many innovative solutions in Aviation stemmed from a reactive need to respond to dire market conditions, rather than a pro-active search for new opportunities.

The following extract from a 2013 interview with Kansai International Airport’s Executive Officer illustrates the passive and conservative approach that prevails in the industry:

“There were risks involved in the project [creation of the first LLC terminal at KIX]… but taking the environment surrounding the airport at that time into account, missing the opportunity presented an even bigger risk”.

The passive approach to innovation places limitations on what can be achieved by your innovation team.

# 3: Acknowledge Invisible Barriers

The barriers to innovation are often invisible. They have taken years to become woven into the fabric of organisations, often making them impossible to identify from an internal perspective. As a simple example, consider the general profile of individuals who hold positions of strategic or budgetary influence in Aviation. For the most part, these positions are filled by people who are approaching the tail end of a successful career – i.e., the optimally worst time in their personal journey to be taking a chance on a project with unpredictable outcomes.

“As a society, we in the West have become very uncomfortable with uncertainty, with unexpected outcomes. The result is that a lot of what we strive for in the innovation space, is predictability above all else. The worrying consequence is that we’re lowering our expectations of what we can achieve. Far from this being an era of unprecedented innovation, I see it more as one of great human meekness and risk aversion, in which we elevate technologies that allow us to hide from the world, that are predictable and safe and help us evade our responsibility to explore, experiment and shape history.” Norman Lewis, PwC

Norman Lewis minces no words in his assessment of the hidden influences affecting the ability of organisations to create impact and lasting change.

# 4: Reward Failure

Implicit in Lewis’s message is the influence of the underlying cultural and reward structures that exist in an organization. Regardless of whether the Innovation Team is added to your organization chart or not, true innovation cannot happen unless the workplace environment makes it safe for staff to challenge existing orthodoxies. This necessitates that workplace culture and incentive systems reward exploration, creativity and the generation of new ideas – not only the successful delivery of a project. In the technology industry, companies like Google and Alibaba take a “fail fast, fail often” approach to innovation: they fund a large number of projects recognizing that although many won’t make the cut after a number of years, the process of accepting “failure” nurtures creativity and makes it safe to expand the limits of certainty.

# 5: Budget for Real Change

"In addition to internal challenges associated with perceptions of risk… the reluctance to innovate is also related to budgetary constraints. Nevertheless the smart airlines such Ryanair and JetBlue, for example, believe that without innovation their business models will stagnate"Steve Tarbuck, VP Ground Operations & Airport Services at Brussels Airlines.

As a consequence of the cultural discomfort with risk, many innovation programs struggle to find the right budgetary support.

"Our team was able to reduce operating costs by around 10% per annum… but we struggled to get a fraction of those savings diverted towards experimental, blue sky projects that explored productizing our success in operations and potentially creating a new revenue stream for the airport" Aviation Executive interviewed in the Middle East in 2014

In contrast, companies like the Hyatt Hotel Corporation have dedicated innovation budgets reserved exclusively for speculative projects that may, or may not, result in direct commercial success. The impacts extend far beyond the boundaries of the innovation team and have

"created an inclusive, collaborative and safe environment within Hyatt for employees to express new concepts and ideas" Jonathan Frolich, VP Global Innovation at Hyatt Hotels, speaking at a conference in 2013.

# 6: Design as a Catalyst for Change

In the last 100 years, the complexity of problems that exist in the world has grown exponentially (see graph). Not only do we now have more problems to solve, but the types of problems are more complicated. For example, in the 1890’s, system design focussed on Resilience (less complex) while in the 1990’s the focus shifted to Quality and Interoperability (more complex) [2].

Cumulative number of journal articles in which an “ility” appears in the title or abstract of the paper (Source: Chris McMahon, Design as a Catalyst for Change, 2013)

As exemplified by the “ilities” in the graph above, issues such as Interoperability, Sustainability and Adaptability are too hard to solve by any one person. Solutions require the integration of knowledge and skills from various disciplines.

Creating a truly seamless global passenger experience, for example, would, at a minimum, require a collaborative effort between international experts in technology, data modeling, mathematics, psychology, marketing, operations - and design.

The inclusion of individuals with “design” training on broader innovation projects is not yet common practice. For most people, the qualification of “designer” brings to mind someone experienced in the nuances of cushion selection or colour co-ordination.

In reality, Designers are adeptly skilled at embracing uncertainty and transcend the chasm between the “doers” (left-brain engineering and technology types) and “dreamers” (right-brain creative types). They are trained to listen, empathise and understand, think laterally, communicate effectively and work with others to create solutions to problems. Exactly the type of person that is needed to create cohesion and deliver results in a team tasked with creating something extraordinary.

# 7: Learn from Other Fields

The creative process unlocked through designers provides the perfect platform on which trends and capabilities from seemingly unrelated fields can be re-purposed. Harnessing works from other areas not only fast tracks the development of new solutions, it also removes the risk of being the first mover, albeit in a different industry.

It is useful to map out where the Aviation industry sits in the technology universe, and reach out to adjacent fields to seed ideas for solutions to problems.

Google is making driverless cars: how could this technology be leveraged to improve the passenger experience of the future? Imagine stepping into your driverless pod in suburban Sydney, and waking up 12 hours later at your meeting on Fifth Avenue in New York City.

The components to create this seamless global passenger experience already exist in other fields, they are just waiting for the right conditions in order to be assembled.

The changes in the Aviation industry over the last 50 years have quietly shifted the focus of the business from operational excellence to customer intimacy. These changes affect the dynamics of where resources should be allocated, how plans, goals and KPIs are derived, what systems and technologies are most appropriate and the way in which partner networks can be leveraged to create new revenue streams and opportunities.

These seven tips will help you on your way to encourage innovation. Although the steps are easy to follow, it may at times still be challenging to overcome the internal inertia that builds up over the lifespan of any large organisation. In these few cases, it may be wise to engage the help of an external innovation partner to bring an objective perspective to the process.

References & Suggested Reading[1] McGrath, R. G. (2013). Transient advantage. Harvard business review, 91(6), 62-70.[2] De Weck, O. L., Roos, D., & Magee, C. L. (2011). Engineering systems: Meeting human needs in a complex technological world. MIT Press.[3] Gibson, R. (2015). The Four Lenses of Innovation: A Power Tool for Creative Thinking. John Wiley & Sons.[4] Kane, G. et al. (2015), Strategy, not Technology, Drives Digital Transformation. MIT Sloan Management Review. Report available here.[5] Andersen, B., & Wong, D. (2013). The new normal: Competitive advantage in the digital economy. London: Big Innovation Centre. Retrieved on May, 21, 2014.

Image credit: Vitor Azevedo and Anna Harrison