Having your head in the clouds while keeping your feet on the ground
By Jirka Stradal & Simone van Neerven
Innovation plays a fundamental role in helping organizations stay relevant, and it will continue to dominate the future of our economy. Leading innovation requires dreaming big (having your head in the clouds) while you work on practical solutions today (keeping your feet on the ground).
A wake up call for the world
The covid-19 pandemic has resulted in more simultaneous shutdowns and lockdowns worldwide in history. By 26 March, 1,7 billion people worldwide were under some form of lockdown, which increased to 3,9 billion people by the first week of April — more than half of the world’s population. (1)
The skies were eerily empty, as thousands of grounded planes were parked wingtip to wingtip on runways and in storage facilities. At the peak of the crisis, more than 16.000 passenger jets were grounded, representing about 62% of the world’s planes worldwide. (2)
Pressure is on
The debate about whether this was a black swan or a grey rhino event is not that relevant. More important is to realise that every now and then, the world will be shaken-up by an impactful event such as a war, a meteor impact, a major hack, or a virus, to name some of the possible disruptive events . Also, many industries were already and are constantly under a lot of pressure. The aviation industry is no exception to that. This comes from a number of forces,from the economic, political, legal, competitive, technological, social, environmental, and global environments.
Only the countries and companies who either mitigated for or hedged against these risks, are resilient and moving towards a healthy future. Moreover, as a company or country, the ongoing thriving state should be antifragile, rather than a coping survival mode.
Furthermore, the belief introduced by Friedman in the seventies that a business’ sole responsibility is making profit and a focus on shareholders return is being questioned more and more. Research by Edelman shows that 73 percent of employees are saying that they want the opportunity to actively change society, and nearly two-thirds of consumers are identifying themselves as belief-driven buyers. Nearly half of respondents are even willing to accept a smaller salary to work for an environmentally and socially responsible company. (3)
This belief is even stronger for the younger generations. 64% will not take a job from a company that does not have strong CSR practices. Meaningful engagement around CSR is a business – and bottom line – imperative, impacting a company’s ability to appeal to, retain and inspire younger talent. (4)
CEOs begin to realise that their mandate has changed. They are expected to lead from the front. Over nine in ten employees say CEOs should speak out on broader issues of the day, including retraining, the ethical use of technology and income inequality. Three-quarters of the general population believe CEOs should take the lead on change instead of waiting for the government to impose it.
Shifting towards an infinite mindset
Organisations need to think differently to build a healthy organization. Doing business is not about winning. Winning means there is an end to the game. The focus should be on how to keep playing. In finite games, like football or chess, the players are known, the rules are fixed, and the endpoint is clear. The winners and losers are easily identified. In infinite games, like business or politics or life itself, the players come and go, the rules are changeable, and there is no defined endpoint. There are no winners or losers in an infinite game; there is only ahead and behind. In these types of games you have to prove your worthiness to participate and to aim to stay ahead of other participants.
Many of the struggles that organizations face exist simply because their leaders are playing with a finite mindset in an infinite game. These organizations tend to lag behind in innovation, discretionary effort, morale and ultimately performance. (5) (6)
Reframe what you do
So the question should be, how to play to succeed in the game we are in? This requires you to begin reframing what you do. As Steven van Belleghem states, become a partner in the life of your customers. Every customer has dreams, fears and ambitions. You need to have continuous insight into the needs and emotions of your customers.
To become a partner in life, it is necessary to understand the bigger issues that play a role in the customer’s thinking. For example, as a bank it might be interesting to learn about people’s dreams and ambitions – a new house, a trip around the world, etc. – so that you can see how the bank can help the customer to achieve their realisation. (7)
Two great examples of companies that have formulated their purpose around becoming a partner in the life of the customer are “to make every part of people’s life as easy as possible” (Google), and “to make it easy for everyone to discover the world” (AirBnB).
Typically, airlines are mainly focussed on transporting people from airport to airport and providing a good experience to the customer. However, airlines should stop seeing only the physical customer journey, but to start seeing it as a customer’s life journey. This no longer has anything to do with the optimisation of the operational processes. Instead, it aims to reduce the frustrations and help realise the larger life dreams of your customer.
For an airline, this change of focus means to divert from terms such as aircrafts, airports, suitcases, bagage, air, network, carrier and so on. Their restated purpose could be something like ‘to bring meaningful experiences and connections everywhere, everyday’.
Looking at business with an infinite mindset will be a game changer and can open up the entire landscape of services an airline could offer, or even mean that it will need to completely reinvent itself. Making the right choices is key, and understanding that there are a number of forces at work will be essential.
May the force be with you
The world is constantly changing and developing. To maintain or build a successful business, it is crucial to gain a basic understanding of the drivers of humans and the trends and forces that are shaping the world. We distinguish three types of forces:
- The human drivers are more internally driven and based on fundamental human needs or desires. We distinguish eight of them. Keen observation, research, and centuries of history show us that we are motivated by a desire to meet fundamental human needs. That is, humans are motivated to do things by a desire to meet their intrinsic needs. These needs are not wants but needs that we all have by just being human.
- The current technology drivers, examples of current key technologies that are foundational to shaping a number of trends. Examples are innovations in processing and computing architecture, advances in semiconductors and electronic systems, new kinds of batteries and electronics, machine vision and speech technologies, (general) artificial intelligence and machine learning, haptics, 5G, IoT and robotics, and many more. These technologies are constantly under development and have profound enabling power, the differentiation they can create, and their potential to catalyze change, often without the final users having a direct interaction with these technologies.
- There are twelve trends or forces that will forever change how we live, work, learn and communicate. The future will bring with it even more screens, tracking, and a lack of privacy. These forces should not be thought of as separate boxes to deal with in isolation from each other. Instead, they are all mixed and interrelated. (8)
Staying relevant today, tomorrow and the day after tomorrow
The last 20 years have been a relatively easy shift in digital transformation. ‘Easy’ problems could be solved with ‘easy’ solutions. The real challenges are starting now, where more complex problems need to be resolved. Today, we are in the best possible time to start something or invent something. The opportunities open to us now are enormous. The forces give direction on how the world is going to change. Most likely most of the greatest products running the lives of people in 2050 will be invented after 2020.
However, most of us focus on today. On the meetings we will be having, the e-mails we will respond to, the price offers we need to send out while deadlines are breathing down our neck. And we should. Today is what pays our bills. We also think about tomorrow, about our future value, how we must adapt to an increasingly digital world, and how – or even if – our company will survive disruption. Fears about tomorrow are what keep us awake at night. But let’s face it, most of us do not think (much) beyond that. (9) With an infinite mindset you start looking at the possibilities in business as a lifetime game, where no one wins or loses, and where you have to make sure you stay relevant to the infinite.
For that, we need to be aware (and not afraid) of the unrelenting pace of change of technology and the enhancement of human life and intelligence by these technologies. This will bring the imminent opportunities and threats for those businesses that choose to embrace or ignore. The forces as identified in the previous chapter can be used as guiding principles in shaping the horizons and making the right decisions.
Working in the three horizons at the same time
When talking about today, tomorrow and the day after tomorrow, this also refers to the well known three horizons framework, originally conceived by McKinsey. It provides a method to distinguish how daily actions impact current, medium and long-term goals for long-term success. It shows how to bucket today’s actions into three distinct categories.
Horizon 1 is about subsistence. Horizon 1 activities have a short-term impact, and are typically low-risk – there is a large degree of control over execution and results. So, they should be done as quickly as possible, but with consistency, reliability, and high-quality levels. Survival in this stage is made up of daily iteration of tasks, maintenance, and follow-up. Neglecting to execute each of these with consistency will, in turn, make you extremely vulnerable.
Bold, new initiatives – this is what horizon 2 is all about. Here you make moves into new markets, which can mean introducing a totally new product category or innovating your business model. For more established enterprises, mergers and acquisitions are also Horizon 2. These activities always come with a significant risk – it is uncertain how the market will react and whether the organization can pull it off.
Horizon 3 activities are designed for long-term impact. Think about conducting exploratory travel, meeting people in new fields of expertise, or investing time into wild ideas. These activities have a highly uncertain outcome and are categorised as low probability, so there is a realistic possibility of not happening? (10)
So how could this 3 horizons framework be applied to the aviation industry? We use the forces as ingredients to imagine the different horizons.
Horizon 1. Can you offer transactional perfection?
Ingredients: surviving, defending, tracking, screening, accessing, becoming, signifying
When thinking of horizon 1 for the airline industry, the major challenge (and opportunity) is to improve the current customer journey to an end-to-end frictionless travel journey. Reduce all the waste, get the basics right, and be able to anticipate quickly any changing customer behaviour, such as caused by the covid-19 crisis where the center of gravity shifted towards touchless and hygiene priorities.
Two major focus points are crucial. All too often, in the airline industry the focus is on planes and operations, whereas it should be much more on people: “We don’t fly planes, we fly people”. (11) Secondly, there is still far too much friction in the entire journey of a customer. This is also caused by the sole focus of an airline to transport people from airport to airport.
In the near future, the entire customer’s travel journey will need to be smooth. Information and context flow directly to the customer through screens and gadgets. Existing touchpoints are optimized, and all transactions are perfectly and seamlessly connected, both digitally and physically. This journey starts from the customer choosing a destiny, anticipation, planning, getting there by plane, receiving the latest contextual information of the destination, paperwork pain-relievers, arranged transport from the airport to the hotel, local travel, helping make meaningful experiences, all the way back to buying a ticket again.
Horizon 2. Are you ready to flip the industry upside down?
Ingredients: feeling, learning, acquiring, flowing, remixing, filtering, sharing
Many airlines are working towards the perfect customer experience. All focus is on transactional perfection as described in horizon 1. (Digital) frustrations and non-logical activities such as having to enter the same information several times or having to use multiple sources of information will no longer be there.
Horizon 2 is about becoming truly customer-centered. “People will forget what you said, people will forget what you did, but people will never forget how you made them feel.” Real interaction, two-way information flow and feedback will be key. Companies can surpass their peers in customer experience design by really listening to and observing the customer in the given context. The journey will be hyper-personalised, acknowledging that needs differ per person and the context that person is in. For instance recognising that when the same person is travelling alone or with friends or family, and whether the purpose of the trip is for work, to relax, or a combination of both.
Exploring new touchpoints and subsequently optimizing existing and personal touchpoints by instant customer feedback, will give rise to a dynamic connected ecosystem. Tailored, personalised products, services and experiences are proactively provided to smoothen the entire journey from consideration of travel to journey back to reconsideration of travel. The ecosystem will keep expanding, and emerging businesses will be constantly added.
This will not be limited to just making onboard reservations for transport to the final destination, also booking all kinds of other activities and experiences on board have become a normality. Technology will be used to ensure a frictionless experience, for instance by using facial recognition during the entire journey, from identification for the pickup transportation to the entrance of a hotel or a co-working space. The ecosystem of services keeps growing and will be based on expanded partnerships. By understanding the needs and desires of the customer in real-time, products and services from the ecosystem can be offered to smoothen the journey even further, leading to higher customer satisfaction and higher revenues at the same time.
And what if you push customer centricity even further?
Today, flight schedules are created months in advance. They are inflexible and airlines are not capable of changing schedules overnight. What would it take for an airline to anticipate on real-time customer demand? This would require an airline to schedule on daily and maybe even hourly fluctuations. The entire airline operating model should be radically altered, especially all activities that nowadays depend on long-term planning require a drastic makeover. The (re-)opening of a new destination or route should be done overnight. Deployment of aircraft, crew and maintenance needs to become hyper-flexible, or rather just in time and demand-driven. And of course, the process of slot allocation and planning, a highly regulated process, will have to change. No longer will it be needed to reward customers with lower prices the more they book in advance. It will be much more lucrative to promote certain flights at short notice, based on changing customer needs to optimise the fleet on the day of operations.
Only with very advanced algorithms, this can be efficiently managed. Moreover, human behaviour needs to change. We are so used to the current entrenched airline model, that we are in the habit of booking all our trips well in advance to get the best price. And consequently, we plan everything around these dates. It will become extremely important to be able to identify, predict and meet the real and specific needs of the customers.
The benefit for an airline, besides becoming truly customer-centric, is the flexibility it will bring. Nowadays, whenever there is a sudden change or disruption, it takes a lot of effort to anticipate and reschedule. A lot of effort and energy is subsequently put into informing both customers and employees.
Even though this will be a rigorous and complete makeover of the airline industry, we still regard it as a horizon 2 topic since it is still about flying, whereas in horizon 3 we truly go beyond the core business of flying.
Horizon 3. Will you still be an airline in 10 years from now?
Ingredients: bonding, being unique, contributing, interacting, beginning, questioning
In horizon 3 it is all about daring to ask provoking questions and really reframing what you do. This will lead to new business models and might even make you divert from the current core business of flying people around the globe.
During the covid-19 crisis, people were forced to radically change their behaviours. In a moment, the world changed and working from home became a normality, Zoom became a verb and the market cap value of Zoom exceeded the value of the seven largest American airlines. Microsoft reported that they saw two years’ worth of digital transformation in two months. From remote teamwork and learning to sales and customer service, to critical cloud infrastructure and security. Ever since Microsoft has been working alongside customers to help them adapt and stay open for business in a world of remote everything.
Another interesting development was seen with virtual reality. In 2019, 14 million people visited the Louvre in Paris. The museum was closed due to the lockdown. The museum offered an alternative to visit the museum virtually. Within the first two months of the lockdown, already almost 12 million people had virtually visited the museum on the digital platform!
The question that arises from this is whether will it become a normality for people to enjoy a “micro-experience” whenever they have 15 to 30 spare minutes by virtually travelling to Venice or visiting the van Gogh Museum in Amsterdam for a quick recharge? This might not be a very radical thought. When people started to use the smartphone, our behaviour changed. What used to be our predictable, daily sessions online have been replaced by many fragmented interactions that now occur instantaneously. There are hundreds of these moments every day – watching something, buying something, learning or discovering something new, texting a spouse, chatting with friends on social media. Google calls these “micro-moments”. (12)
Our human behaviour is constantly provoking and adjusting to changes. People are now used to meeting in a virtual space. The human needs such as feeling, bonding, learning, and being unique are still fulfilled, and technology helps to do so in different ways. Virtual reality is a great example of this, and therefore becoming a realistic alternative to physical travel.
Looking at your business by following future trends, originating from developments in technology and human needs, will open up and can bring tremendous opportunities. A great way to start is by immersing yourself in the customer’s life and thinking about becoming their partner in life. It is crucial to understand why they are flying (or why not) and identify the possible alternatives.
The future will probably not be that people will never travel again. But there will be many alternatives to choose from. Could the train be a really good alternative to air travel? And if not yet, are there developments going on that might change this in the future, such as a high-speed train or a hyperloop? Will VTOL (vertical take-off and landing) or self-driving electric cars become realistic alternatives? And will the experience of meeting in virtual reality become so realistic, that more often people will decide to opt for this? By defining the airline’s purpose as ‘to bring meaningful experiences and connections everywhere, every day’, these become interesting options to create genuinely new business models.
Open up to new perspectives and embrace polarities
We live in the never-normal, a time when nothing but uncertainty is certain. How you react as a company — and how quickly — will make the difference between success and failure. The world is getting far too complex for linear or binary thinking.
The three horizons model is an excellent tool to support leaders in holding a bold vision and delivering short-term results. To have their head in the clouds and their feet on the ground. But this is not the only polarity a leader has to deal with. Polarities are everywhere. Leaders also need to be able to maintain stability and galvanize change. To honour what is working and seek the freedom to create something new. We need to strive for excellence and be willing to fail. To gain trust and be willing to disappoint.
The challenge is that choosing between these opposing goals is not a problem to be solved. A problem is linear and can have a “right”, or at least a “best” answer. Instead, these opposing goals are ongoing polarities to be managed. One pole is not better than the other, or truer or more worthy to be chosen over the other. The poles are interdependent and complimentary, and they work together as part of a system. (13)
Once we begin to embrace the concept of dealing with polarities and acknowledge that this is an important developmental opportunity, it prevents us from binary or linear thinking and it will be easier to open up for new perspectives.
Tapping into the wisdom of the group
To be innovative, a diverse team needs to consist of people who are diverse within themselves. Our thinking can be diversified by making sure that we do not turn to a slave to one area of interest, crossing conceptual borders if not geographical borders. This was a routine Charles Darwin used. Switching his research between botany, zoology, geology, and psychology provided him with a new perspective and enabled him to bring ideas together across fields.
When we form a cognitively diverse team, we expand our expertise to make our blind spots disappear. We increase what is called group wisdom, that is the extensive range of views in the team gives it full coverage. However, this collective intelligence does not only occur from academic knowledge. True group wisdom needs a profound knowledge of human behaviour.
Demographic diversity is not sufficient
It is a divisive and polarizing time in which we respond by constantly seeking like-mindedness. We have a growing number of ways to meet up with people similar to ourselves: we are drawn to people with the same interests, same tastes, same politics. Every time we buy something online, we are told what other people like me also bought. (14)
It is human nature to find people we recognize to be “like me”. Ironically, the wider our social options, the less likely we are to seek diverse friendship groups. Although it is human tendency to interact with people of the same interests and values, it shows that we are at risk of being in an echo chamber. Echo chambers occur when our own beliefs are regularly repeated by the people who surround us, whether in person or online. And surprisingly, if contradictory beliefs find their way into our echo chamber, they do not allow us to question our positions; they essentially oppose and polarise us more.
This kind of behaviour forms collective blindness and hinders the success of a team, a nation and global humanity. Even if a team consists of extremely intelligent people, if they all think alike, they won’t know their blind spots, what they are not seeing. So dealing with complex problems needs more than only intelligence and skill. It needs a deliberate seeking of diversity. This diversity should not be restricted to demographic features, like gender, race, age, sexual orientation or religion. It needs to be a diversity of the mind or cognitive diversity. (15)
If we truly want to improve our collective intelligence, the combined intelligence of a group, we need to defeat bias. When we need to decide with imperfect information, we unknowingly rely on our prejudices or biases, for example, we trust someone more if they are an authority figure than if they’re not, or we assume someone’s gender based on their profession. When we set our biases apart and surround ourselves with minds that have understanding and experience that is different from our own, we form a team with wider and deeper understanding.
Another way to minimize the effect of biases can come from technology. Algorithms are less affected by these kinds of biases when the models are trained well. Complex emergent properties from human-AI interactions will challenge our binary and linear thinking. This is a great example of where AI can help to enhance human intelligence.
Regularly engaging with diverse ideas and people working in different fields enhances our brains, which helps us to come up with better solutions and ideas. A leader should encourage people to get out of their comfort zones now and then. People who are not regularly outside their comfort zones are less likely to feel these surges of inspiration since their minds have developed into what they are used to.
Getting comfortable with being uncomfortable
Many airlines are constrained by their incrementalism, protecting existing lines of business, silo thinking, old hierarchies and thinking small. The airline industry is under a lot of pressure, even more so due to the impact of COVID-19. Surviving and thriving asks for a different kind of mindset. It is not about what we know, but how we know. We do not need more skills or information. We need transformation. Transformation is not about adding more to our minds, it is about changing the very mode or operating system of our minds.
The ability to step away from binary thinking and embrace polarities will help to deal with the growing complexity of our world. But changing the way you have dealt with challenges for a long time and opening up to new perspectives can feel uncomfortable.
If leaders can create psychological safety in their teams, the advantages of cognitive diversity can be fully exploited. The environment forms the basis for non-leaders to voice out their opinions, it will support the sharing of ideas and encourage open communication to prevent brilliant thoughts and ideas from being lost. The key to this lies in working with one another to open up through empathy and trust to create meaningful connections with people regardless of being different.
At this time of change and reflection, the call to thought leaders is to understand that doing business is not linear, but rather like playing an infinite game, where you have your head in the clouds and keep your feet on the ground at the same time. This requires us all to see that the emerging human and technical forces that are shaping the world are a positive opportunity to build a sustainable business, rather than a threat. The forces at play, create a landscape of new and unfamiliar possibilities in the traveller’s journey and beyond, as well as tearing down previously segmented markets. Defining a bold and inspiring purpose as a leader will help to mobilise the organisation, and working with polarity and communication with the three horizons is a pragmatic way to connect the future with the here and now.
(1) https://en.wikipedia.org/wiki/National_responses_to_the_COVID-19_pandemic
(2) https://www.bloomberg.com/news/features/2020-04-16/coronavirus-travel-what-happens-to-planes-grounded-by-covid-19
(3) https://www.edelman.com/news-awards/2020-edelman-trust-barometer
(4) https://sustainablebrands.com/read/organizational-change/3-4-of-millennials-would-take-a-pay-cut-to-work-for-a-socially-responsible-company
(5) Book ‘Finite and Infinite Games’ by J.P. Carse
(6) Book ‘Infinite Game’ by Simon Sinek
(7) https://www.stevenvanbelleghem.com/blog/three-steps-to-define-your-partner-in-life-strategy/
(8) https://www.whatyouwilllearn.com/book/the-inevitable/
(9) Book ‘The Day After Tomorrow’ by Peter Hinssen
(10) https://www.thnk.org/insights/the-three-horizons/
(11) quote by guido woska
(12) https://www.thinkwithgoogle.com/marketing-strategies/app-and-mobile/how-micromoments-are-changing-rules/
(13) https://www.thnk.org/blog/innovation-and-inner-polarities-why-innovation-is-the-ultimate-place-for-growth/
(14) Book ‘Collaborating with the Enemy’ by Adam Kahane
(15) Book ‘Rebel Ideas’ by Matthew Syed
This thought leadership article was originally published in the book “Airlines in a Post-Pandemic World” by Nawal Taneja
