Should airlines invest more (or less) in digital during the pandemic?
In the past, I’ve written about how marketers see COVID-19 as a driver of change and emphasize the role of digital innovation during the pandemic. But to be honest, it’s easy for me to say that, as I’m not running an airline during the biggest crisis our industry has ever seen.
This is why I wanted to share a real airline story with you!
I wanted to tell the story of somebody who’s in your shoes, so you can hear about how a real airline digital leader is navigating through the pandemic.
Enter Esamatti Vuolle, Head of Digital Commerce at Finnair. Esamatti was a member of our Airline Digital Academy community, and when we talked about the challenges of Finnair’s digital transformation during the pandemic, he showed me this slide:
Source: Esamatti Vuolle
Personally, I don’t think you could recap an airline’s digital journey during the pandemic any better. I believe most of you went through these “COVID-19 phases,” which Esamatti described so well, in some shape or form.
Most of the airline industry was growing and hit a peak in 2019; then the reality of COVID-19 hit and we found ourselves in the “valley of despair,” followed by some false hope during the summer.
Right now, most of you are probably in the “laser focus” phase. For Finnair, this phase meant making difficult prioritization decisions to prepare for the future. Finnair’s digital transformation was heavily impacted by the pandemic, and they had to cut many jobs. Esamatti’s digital department lost around 35% of their people over the last six months, and they needed to recalibrate their digital plans.
I definitely wanted to dig deeper into Finnair’s digital transformation journey during this rollercoaster of a year and learn more about how they’re preparing for the future.
Listen to the new episode of the Diggintravel Podcast about how Finnair adapted their digital transformation during the pandemic, or read on for key highlights from our talk with Esamatti:
And don’t forget to subscribe to the Diggintravel Podcast in your preferred podcast app to stay on top of the latest airline digital transformation trends!
Finnair’s digital transformation journey started way before the pandemic, and the focus on digital resulted in a record-breaking digital year in 2019:
Last year [2019] was record breaking for the digital business at Finnair. We grew both conversion rate [+35%] and average order value [+20%], so we were not only able to get the most out of our traffic, but also sell more value per item to our customers. We also got really nice feedback from our customers, not to mention our mobile app got an NPS score of 62, which is pretty good in our industry.
The growth was a result of Finnair’s digital transformation journey, which included building its own digital platform and digital team:
The focus on digital, especially in 2019, has been on our dot com [Finnair website]. In the past we used off-the-shelf solutions for our website, but then we decided to take a different approach. We wanted to build it ourselves; we wanted to have a product-based approach. So, we built an in-house digital product team. In our best days we had close to 100 people working in-house on our digital touchpoints (finnair.com, mobile app, in-flight entertainment).
Of course, the pandemic meant Finnair needed to downsize their digital teams and rethink their priorities:
Just in a few weeks, we lost over 90% of our business, so we needed to think really carefully [about] what we wanted to do and where we’ll put our focus.
However, because of the digital transformation Finnair had already completed before the pandemic, the key elements of their customer-centric digital approach remained the same, even with a smaller digital team. This means listening to customers and having an agile process of short research, development, and testing cycles:
One of the essential things of our in-house development team is that we can innovate, develop and test in short cycles. If you have a good idea, a good hypothesis, we can just walk by the airport and test it on our customers, on a prototype or even on paper. And then we can develop it in a short cycle and test again on customers. Having customers close to us and having a short feedback loop has enabled us to have a really short time to market.
Source: Esamatti Vuolle
The concept of agile planning with fast iterations and customer feedback loops was really interesting to me. If you follow any of our Diggintravel digital optimization research or articles, you know that digital optimization is all about fast loops of analytics, agile user research, optimization, and testing.
This is why I wanted to learn more about how this process looks in practice at Finnair.
We plan our digital development in 12-week cycles and we define objectives per cycle, so what we want to achieve. Our teams are empowered and they know how to solve the problems to achieve the objectives. We are empowering them to find the solutions. We wanted the cadence of 12-weeks cycles because we need to give them ‘peace’ to work which is long enough to try things, try to find solutions, and work on different problems.
However, the actual delivery – the discovery, definition and design – those are done in 2-week cycles, 2-week sprints. So we have short time to market, short iterations and we get product out as fast as possible.
Source: Finnair
You can see that Finnair’s digital transformation was not only about building its own digital platform or in-house digital teams, but also about a different mindset. Adopting this customer-centric mindset and changing the way you work is usually the most difficult part of any digital transformation.
My next question for Esamatti was quite obvious – what was the biggest challenge they faced during this journey?
One of the biggest challenges has been that everybody has an opinion about digital. Everyone who knows how Netflix or Facebook works has an opinion. They have an opinion on the product or they have an opinion on the UX.
That is really challenging because you need to think [about] which opinion really matters. Should you ask the CEO, should you ask the executive board, or who should you ask? That was a huge learning, because you don’t need to ask anyone.
While I was listening to Esamatti talk about opinions and challenges, I remembered this infographic on ‘The dangerous animals of product management’ by Productboard.
Source: product board
We often talk about the challenge of the HIPPO decision-making process (highest paid person’s opinion), which happens in authoritarian, hierarchical organizations. But as you can see from this image, there are other dangerous opinions when it comes to digital product management.
To become customer-centric, to really build solutions that solve customer problems, you need to listen to your customers and not build solutions based on opinions.
What was Esamatti’s approach to dealing with opinions and making more fact-driven decisions for Finnair’s digital products?
First thing you need to learn is to go away [from opinions] and dig into data. You need to build data-native skills. That means that all people in your group, team, squad, however you call it, are data native. So they can learn from the data. Not only just look into data, but are able to convert it into insights and then into actions. This means we are not building our products on opinions anymore, but rather facts.
Data is not the only truth, but it’s as close as we can get. And to be able to test those [hypotheses based on data and insights] fast, and if you can try multiple things in a short time… that has been one of our key learnings: that we are able to get away from opinions and let data speak.
Esamatti raised one interesting point when he was talking about data and skills. He said everybody in the digital team needs data-native skills. In our Airline Digital Academy, we talked about a similar model of the T-shaped skillset airline digital professionals need in order to face complex digital problems (see the model below).
Source: Diggintravel Airline Digital Academy
In my opinion, airline digital pros will need a broad skillset and understanding of many areas. In the past, we’ve seen a lot of specialization and, as a result, a lot of siloed, partial views on the airline digital journey. Esamatti shares a similar view on this challenge:
If you have many people who have niche skillsets, then we also have many more ‘grey’ areas between those skillsets. That is a lost opportunity.
I definitely agree with Esamatti that digital analytics should be one of the key tools in your digital tool belt.
My last question for Esamatti was: how does he see the evolution of airline digital skills in the future?
First, airlines are going to be much smaller than they used to be, so that’s already one effect. People will need to have multiple skills, and we are seeing a change from specialist to more generalist roles. In Diggintravel Academy we’ve been discussing a ‘T-shaped person’ who has a broad range of different skills and one deep expertise where they can really dive deep into certain topics. This is one key thing: that people will need to learn and handle multiple things.
If you liked this interview and want more insights on case studies similar to this one on Finnair’s digital transformation:
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