Innoboard: There is no generally accepted definition of innovation. Every industry and every department perceive it differently. How do you define innovation at Lufthansa in your position as EVP and Head of Information Management at Lufthansa Group Airlines?
Dr. Schütz: We are consumers of technology, and we deploy and enable it in our business. When it comes to innovation, we need strong partners who can understand our business processes and address our needs. With the current growth of digital technology, we strive for fruitful collaborations with technology companies by setting up innovation labs and creating an ecosystem of specialists from other industries. Innovation is not easy. It is a collaborative exercise, and the knowledge and the ideas have to come from various sources. We contribute our industry process knowledge and deep business insights, and combine that with ideas from outside. We need the capabilities of modern technology and a deeper understanding of use cases and end customer needs in approaches like Design Thinking to pave the way to new offerings for the customer. But we cannot be successful without external support.
Within my organization, we have established an IT innovation process. A five factors approach will ensure the success of the IT innovation management process. The process starts with screening of the industry for trends. The identified trends and the derivation of scenarios are input factors for the ideation phase. Ideation is done in a workshop using Design Thinking methods. After creating a complete idea longlist, only feasible and attractive ideas will be prioritized and continued to be developed. To improve prototyping, a clear allocation of ownership per topic and process as well as a suitable governance structure are needed.
There are many possible benefits of big data and digitization such as optimization, enhancing customer experience and developing new business models. On which opportunities do you focus?
Optimization and enhancing customer experience is certainly a focus area, and big data/analytics and digitization are enablers in that journey. Opportunities are multifold in terms of getting closer to our customers, constantly communicating and engaging through different channels with appropriate content at the most relevant time. Helping innovate new products and services that offer our customers a personalized experience and making travel pleasant. Augmenting decision process through data driven culture to drive insights and impacts on operational efficiency and being a preferred (premium) airline of choice by customers.
What are the challenges and pitfalls of digitization for Lufthansa?
The challenges are to structure a companywide digitization approach. Many departments try to accelerate digitization by building standalone apps using individual data. From an IT perspective, it is important to develop an overall architecture and governance to support digitization. The pitfalls of digitization are for instance, that service agents will no longer have an advantage of being better informed than the customers. Therefore the focus can shift from informing a customer to supporting him.
Besides product and service innovation, which role does business model innovation play at Lufthansa?
As all of an airline’s critical business processes rely on IT, IT Innovation is the strategic imperative for Lufthansa to survive and compete. IT innovations are needed for business transformation including cutting operation costs, providing excellent customer experience, expanding ancillary revenues, delivering mobility and self-service solutions. Lufthansa transformed from selling tickets to their new customer-centric business model—everything revolves around how to make the customer experience the best. The implementation of Premium Economy Class was e.g. an important business model innovation for Lufthansa.
What is your personal goal for this year regarding innovation?
The main goal for 2016 is to enhance the implemented innovation process. In addition we conducted many design thinking workshops and recently completed one with my entire management starting with the team leads. Further I will consolidate all initiatives regarding digital innovation within the Lufthansa Airline Group and develop a roadmap for the next years.
About the interviewee:
Roland Schuetz was born August 1968 in Germany. After his education in natural sciences and supercomputing he worked as scientist. In 1996 he changed to financial industry and held several management positions in IT service delivery organisations.
In 2005 he joined Lufthansa Group as Chief Operating Officer of Lufthansa Systems. In 2010 Roland was appointed Chief Information Officer of Lufthansa Cargo. In 2014 he was appointed Chief Information Officer of Lufthansa Passage. Since 2016 he is appointed as Chief Information Officer and in charge of all digitial activities of all Lufthansa Group Airlines.