Digital Disruption is commonplace these days. It occurs so frequently that when it happens it’s not as impressive as it once was. However, it’s an incessant reminder to the C-suite of many traditional organizations of the need to transform in order to keep pace with a market that is unpredictable and in an environment that is far from stable.
Alfredo C. Tan, the newly-minted Chief Digital and Innovation Officer at WestJet, has been tasked with driving this new direction for the Canadian airline as it moves to become a global success story. In just two decades, WestJet established more than 13,000 employees, over 100 destinations in North America, Central America, the Caribbean and Europe and an additional 175 destinations in over 20 countries through partnerships.
As with almost all industries, the global tourism and travel landscape has witnessed significant changes. This $7.6 trillion sector has seen a pronounced shift in its business model, in part because of disruptors like Airbnb and Uber. The airline industry will not be immune. Crippled by legacy operations and heavy regulation, the desire to transform is not a feat that is surmountable in a short period of time.
This 2017 report published by the Centre for Aviation acknowledged these changes:
Above any other industry, airlines are captured within an arcane regulatory framework designed 70 years ago, and whose purpose was to achieve little else than protect against new entry. It is a capital intensive heavily unionized industry, and it is dominated by legacy models still focused on buying and flying expensive metal. But at its heart the airline offering is just another consumer retail product. As such, it is just as susceptible to upheaval… The airline industry as we know it will be unrecognizable by 2025, as fundamental features are uprooted. The process will be accelerated because of the confluence of disruption in each of the key aspects of commercial aviation: flying and selling.
I had the pleasure of sitting down with Alfredo C. Tan to explore his journey to WestJet and his vision to instigate some necessary upheaval in an already accomplished organization.
Obsessed to Join the Movement to Empower the Internet Generation
Alfredo remembers Cisco Systems “Empowering the Internet Generation” commercials. The powerful message depicted a world transformed by this eventual connectivity across networks and markets. As a student of forensic science and biology at the time, he felt he had missed the opportunity to be part of this incredible wave of dot.com companies being born.
When he graduated, he read an article in Fortune Magazine about top business school graduates turning down blue chip companies to go chase the new Gold Rush in Silicon Valley. Not one to let another opportunity go by, Alfredo learned how to code and immersed himself in computer and technical courses. Soon he landed at Bell Nexia in Systems Engineering and Design where he eventually led a team of engineers to help restore connectivity between telcos in NYC and Toronto during the World Trade Centre disaster. Along the way, Alfredo had looked to mentors willing to teach him:
Most things in the professional world you can excel at without a formal education in that field. With enough mentorship, intellectual curiosity, aptitude, grit and passion you can find success almost anywhere.
Whether it was Bell Canada where he learned to build large scale strategic alliances, enterprise marketing and strategy, or at MSN.ca where he was introduced to the disruptive world of online advertising, media sales and internet marketing, or at Yahoo! Inc. working on Mobile, Search, and corporate partnerships, Alfredo’s journey exemplified this learning mantra throughout his career.
Facebook: The Platform that Changed Everything
If you could see the future and know within a decade your company has just entered the S&P500, you would not hesitate to join. In 2008, this was hardly evident, and Alfredo grappled with the decision to leave an amazing job with endless opportunities within a company that was still an internet powerhouse for a social network that was perceived to be overvalued, had no clear monetization strategy, no real market differentiator and one that could have easily gone by the wayside like MySpace or Friendster. The defining moment for him came when he returned from a trip in 2008. As he remembers,
Before I returned from a trip in 2007, I exchanged email addresses among those I had just met. And by the time I went on a trip in 2008, everyone exchanged ONLY Facebook IDs. Within 12 months the movement from email to Facebook was unreal. What Facebook was really building was identity at scale. What it really has is people – 2.2 billion people. And as it continues to grow, it continues to be unassailable.
He chose to venture to Facebook despite all the guidance and advice otherwise. He remained there for 8 years, where he spent the last two years working with the leadership teams in the high growth markets of South East Asia and Latin America. The learnings were life changing and career defining.
Why Can’t Traditional Businesses Adapt to Market Changes?
For all the gains Facebook and social networks have made globally, business has still not fully embraced the changes required to keep pace with the dynamic market.
Alfredo points to disruptors like Google, Netflix, Facebook, Microsoft, Uber, Apple and Amazon. These companies have a different way of building their innovation culture. What’s common among them?
- They move with a sense of urgency
- They worship velocity
- They are unafraid of change
This is a polarized view of how traditional companies operate.
As the Chief Digital and Innovation Officer of WestJet, Alfredo’s experiences make him ripe for the challenge ahead. WestJet recognizes the need for change and a culture that supports the changes required. As a traditional company, it behaves much differently than the environments Alfredo was used to. Coming from the tech space, there is a common understanding, a common way of thinking because technology isn’t something you need to convince people to invest in.
It’s hard-coded in the DNA of the company.
In most traditional companies digital is not foundational to the success of the company. Success comes from other practices within the organization. The challenge becomes convincing a group of people in a company to invest in what you believe to be true.
Alfredo would argue the majority of leaders and employees understand the world has dramatically changed but it’s not clear how digital could be a competitive advantage. There’s a process in education and winning the hearts and minds of people to “believe it before they see it”. The executives were sold on change as the new normal at WestJet. Alfredo was inspired by the genuine interest and motivation by the employees to make this a reality.
WestJet’s First Ever Hackathon
Thinking differently takes time. You can’t make the assumption that people understand simply by saying. Just as he continues to learn about an infinitely complex industry, Alfredo and his team, in turn, need to educate and tell the story in a way that helps the entire company understand the impact of digital and innovation on the business, without the jargon and without the hype.
This came to fruition soon enough. WestJet’s VP of Loyalty, d’Arcy Monaghan and Rhonda Reynolds, Product Development Manager, approached Alfredo about developing solutions for the premium traveler, which could then trickle down to all of WestJet’s guests. Alfredo had only been in the job a few weeks and didn’t feel he and his already-constrained team were in a position to solve the problem on their own.
While the original idea was to hold a brainstorm among a group of people from various departments, it quickly morphed to include some of Alfredo’s friends from the tech industry. As more people heard about it, the more they wanted to participate. The kernel grew into this idea of a full day hackathon, a competition to develop a seamless premium guest experience and #HackInTheHangar was born.
Alfredo invited some of the biggest tech companies and systems integrators like Adobe, Facebook, Amazon, Deloitte Digital, Google, Panasonic Avionics, Twitter, LinkedIn, Snapchat, Hootsuite, IBM, Salesforce, Huge Inc. In all, 17 companies and their 120 people from technical, creative and design backgrounds were paired with 37 WestJetters and a dozen of WestJet’s premium travelers to participate in this one-day event. As Alfredo points out:
The initial, very simple idea gave birth to this movement in the company which aimed to answer a few key questions:
- How can we show 13,000 people that we can solve problems in a different way and co-create new experiences?
- More importantly, at a greater velocity:
- How do we get non-technical people to solve problems in a hack culture?
- How do we gain the respect of the global tech community to be be inspired and partner with us in our digital and innovation mandate and co-create the future of travel?
- How do I win the support from key executives in the organization who I would need in order to succeed?
The judges for the event were chosen with care and purpose. The objective was to demonstrate the amazing thinking and solutions that were developed within one day, and to have them understand and evangelize Alfredo’s vision for the company.
The Digital Company that Just Happens to Fly Planes
By the end of the day, the executives at WestJet needed little convincing. Louis Saint-Cyr, the Vice President of Guest Experience indicated that airlines with legacy behaviors limit what they can do for the customer. The hackathon revealed WestJet’s need to align with what will be an increasingly digital guest journey. He validated the industry’s current push and pull between innovation and regulation which has produced operating limitations. Despite this, Louis saw huge possibilities:
This hackathon revealed how we can innovate around these structural limitations. How do we digitally empower the front lines and augment soft skills WestJetters are known for with technology to tailor guest experiences?
…Think of the hurdles that go into a customer’s travel journey: the time to get to the airport, the waiting times for bags, the check-in – things that can add stress. By leveraging the emotional framework of social media and aligning it to the guest journey, we can address these hurdles in a direct way to transform air travel for guests.
…Overall, by amalgamating guest profiles with their expectations to what they’re experiencing on board, on the website, and in the airport we can make significant strides in the guest experience.
CEO of WestJet, Ed Sims closed the day and declared that in 24 months, WestJet will be a digital company that happens to fly planes. It sent a signal to the tech community and the leadership team that this hackathon wasn’t just a side project; this will literally be the future of the company.
WestJet’s first hackathon represents a cultural shift toward more innovative thinking at WestJet. We will move fast, learn fast and build fast. We now have an opportunity to do things differently and to innovate in the travel space like has never been done before. Our goal is to have products way ahead of guests’ expectations.” ~Ed Sims, WestJet President and CEO
Alfredo’s next steps?
The hackathon and the thinking it surfaced are all theatre and theory until you start to build. We have to build the capabilities that we saw were compelling plus other capabilities we will investigate in the future. Innovation is a cultural mindset more than anything else but it comes from building.
These brilliant ideas will lay the groundwork for developing those capabilities over the next five years. In addition, given the incredible demand to repeat more events after the hackathon WestJet is planning to host an annual event with different themes.
In a short period, the acceptance the hackathon generated, instilled an idea to embed the hack culture into the company as a way of addressing problems and empowering cross-functional groups to self-organize and invent solutions in a confined period of time.
We’ll find a way to make it pervasive in the organization so a flight crew member who wants to fix a process can gather a group of people to create a solution then present that for budget approval in a matter of days. It’s bringing the hackathon to smaller scale, smaller team sizes, with less fanfare. Hopefully, that will influence 13,000 people to start to think this way.
We are just getting started… In the end, I would have failed in my job if I was the only one responsible for the digital and innovation culture. It’s for all WestJetters to embrace it and the future.
For someone whose mantra is to be curious and continue learning, Alfredo C. Tan, in the first 90 days, has pushed the organization to think differently, learn new ways of doing things, and challenge the limits of their imagination.
Hessie Jones is the Founder of ArCompany advocating AI readiness, education and the ethical distribution of AI. She is also Director for the International Council, Global Privacy and Security by Design. As a seasoned digital strategist, author, tech geek and data junkie, she has spent the last 18 years on the internet at Yahoo!, Aegis Media, CIBC, and Citi, as well as tech startups including Cerebri, OverlayTV and Jugnoo. Hessie saw things change rapidly when search and social started to change the game for advertising and decided to figure out the way new market dynamics would change corporate environments forever: in process, in culture and in mindset. She launched her own business, ArCompany in social intelligence, and now, AI readiness. Through the weekly think tank discussions her team curated, she surfaced the generational divide in this changing technology landscape across a multitude of topics. Hessie is also a regular contributor to Towards Data Science on Medium and Cognitive World publications.
This article solely represents my views and in no way reflects those of DXJournal. Please feel free to contact me firstname.lastname@example.org
AI technology from IBM detects breast cancer risk before it happens
IBM has taken a step forward in disease prevention by designing an artificial intelligence technology that can predict the risk of breast cancer developing up to one year before the first signs of cancer appear.
With this new step in medical diagnosis, IBM has developed an artificial intelligence model which is capable of predicting malignant breast cancer within a year with an 87 percent accuracy rate (when the output from the machine is compared with expert radiologists.) In addition, the technology could correctly predict 77 percent of non-cancerous cases.
The prediction methods uses both mammogram images and medical records in order to make the assessment, based on a data review of the medical evidence. This is the first application of AI to draw upon both images and data to make a prediction in relation to breast cancer.
At the heart of the deep neural network technology is an algorithm, which was trained by IBM technologists along with medical professionals from Israel’s largest healthcare organizations. The training of the artificial intelligence took place using anonymized mammography images which were linked to biomarkers (like patient reproductive history) together with clinical data. The training data-set consisted of 52,936 images from 13,234 women who underwent at least one mammogram between 2013 and 2017.
The aim of the medtech is not to replace the physician, but to act as a ‘second pair of eyes’, providing a backup in the event that something has been missed through conventional patient assessment. This could prove especially useful in areas with staff shortages where a second medical professional is not available to provide a second assessment.
An assessment of the technology has been published in the journal Radiology. The research paper is titled “Predicting Breast Cancer by Applying Deep Learning to Linked Health Records and Mammograms.”
In related news, IBM is applying artificial intelligence to catch Type 1 diabetes much earlier. IBM’s other health technology project could help identify patients at risk and help chart a course for tracking the condition. The predictive tool is a joint project between IBM and JDRF (formerly known as the Juvenile Diabetes Research Foundation).
OECD issues report on AI in Society
The OECD has published a detailed report looking at how artificial intelligence is affecting global economies and societies. The report considers the acceleration in AI investment and the growth of startups.
The new OECD report is titled “Artificial Intelligence in Society“, issued on June 11, 2019. The report charts the acceleration in artificial intelligence investment since 2016, particularly in the areas of Canada, China, the European Union, Israel and the U.S. As a sign of growth in investment, the report shows how artificial intelligence startups have attracted 12 percent of global private equity investments in the first half of 2018, a figure that is up from just three percent in 2011.
The report additionally looks at the different sectors adopting artificial intelligence systems, the policy challenges of the technology, and issues like risk management and approaches to transparency. This is tune with the focus on how the technology affects society found in the report.
While it is acknowledged that artificial intelligence adoption can generate productivity gains, improve well-being and help address global challenges, such as climate change, resource scarcity and health crises; at the same time, artificial intelligence applications raise questions and challenges related to human values such as fairness. There are also considerations of human determination (self-will), privacy, safety and accountability.
The report follows on from the OECD, together with partner countries, formally adopting a new set of ‘Principles on Artificial Intelligence’. This activity took place at the Organization’s 2019 Ministerial Council Meeting on May 22 in Paris.
The goal of the new report is to help to construct a shared understanding of artificial intelligence and to encourage dialogue on important policy issues, like labour market developments and upskilling for the digital age. There are other issues like privacy, accountability and the responsibility, security and safety questions that artificial intelligence generates. These form part of a section of the report titled “Public policy considerations”.
An interesting section of the report, which runs to 152 pages, it titled “AI applications”. This section considers ten areas that are seeing a rapid uptake of artificial intelligence technologies. These areas are: transport, agriculture, finance, marketing and advertising, science, health, criminal justice, security, the public sector and augmented/virtual reality. The report looks at the benefits in these areas such as raising the efficiency of decision making, saving costs and enabling better resource allocation.
The report also looks at the big investment in startups, which is running somewhere between $26 billion to $39 billion, with three-quarters of this investment coming from big technology companies – primarily: Google, Apple, Baidu, Facebook, Amazon, Intel, Microsoft, Twitter and Salesforce.
The biggest sectors within which artificial intelligence startup companies are developing are cybersecurity (for example, Amazon and Oracle purchased Sqrrl and Zenedge, respectively); autonomous vehicles; and healthcare. While China and the U.S. are the biggest areas for startup investment (ahead of the European Union in third place), the most rapid growth has occurred in Israel, which has seen the share of investments in AI startups jump from five to 25 percent between 2011 and the first half of 2018.
Paris opens data center to host the city’s digital services
Paris has established its own data center, designed to host the city’s digital services and which will be run by local government officials. This is a strong sign that Paris wishes to chart and control its digital future.
As part of its mission to become a digital city and to lay down the foundations for the future, the local government of Paris has invested close to $18 million (€16 million) in a new data center. The aim is for the data center to be scalable and adaptable, in terms of future-state technology, for the next 50 years. The center, which from the outside resembles any other office building, is located north of Paris in the 18th arrondissement.
According to Paris IT head Joachim Labrunie, who is quoted by Co Fund: “We want to be able to tell citizens where their data is, we want to save some money and we want some stability by avoiding regular moves.”
The most interesting aspect about the project is that Paris has elected to invest heavily in a physical infrastructure, at the same time that many businesses are adopting cloud technology. The reasons for adopting this approach, according to a review by TechCrunch, is to ensure that Parisian officials maintain control of public data, rather than trusting the data to a third party to host elsewhere.
In addition, technologists have made the case that a physical infrastructure will enable more reliable services to be provided. There is additionally a case for lowering the environmental impact of an elaborate information technology system. The data centre controls its heat output through cold water. In order transfer the data centre’s heat, architects have designed a process that injects warm water, diverted from the water cooling system from the centre, into the heating system of residential buildings next door.
A further factor behind the creating of the data center is the desire to control costs. An alternative to building the data centre was renting one. When officials looked into the relative costs, and the tendency for rents to increase in four-year cycles, building a center from scratch in a building owned by the municipal authority remained the moist economic option.
A similar initiative has begun in London — the London Digital Security Centre, which has a narrower remit but is based on the same desire to control data directly. The London Digital Security Centre is a joint venture between the Mayor of London, the Metropolitan Police Service and the City of London Police. The aim is to assist businesses in growing and innovating through operating in a secure digital environment.
Frankfurt has also been developing a physical data center to serve its business district, signaling that several major cities appear to be eschewing the cloud option.
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