One question I’ve been asked most during Tea with Me session is about my thoughts on the future of airline KPIs. Actually, a question I love to provide my thoughts on because I think airline KPIs are going to change tremendously soon. And promised, this has nothing to do with COVID-19 and the challenges airlines are facing currently.
However, the first part of my answer regularly confuses. I don’t think that we will see lots of entirely new airline KPIs in the future. Of course, Corona, changing customer needs, or climate change will bring up a few new KPIs. Nevertheless, on top-level airlines will continue to monitor so-called Evergreen KPIs (Punctuality, Regularity, Seat Load Factor, etc.).
The reason why I think that airline KPIs are going to change is highly related to today’s usage. Why that? Because the current use tremendously limits the potential of KPIs.
Today’s approaches limit the usage of airline KPIs
With today’s approach, KPIs are presented in a fixed way. Powerpoint presentation, PDF documents, or solutions that show KPIs in a web-browser. All of the options limit the number of KPIs. Of course, you can create a Powerpoint presentation that contains 200 KPIs. However, I think we can agree that no one ever will flip through the slides. And yes, you can prepare several different web-based dashboards. But we’ll face the same issue here: No one will click through all of them.
Long story short: The current solutions limit the amount of KPIs that are displayed and, subsequently, the value KPIs provide. Period.
Talking about future airline KPIs is about starting a usage discussion
That’s why I’m convinced that the future of KPIs is primarily about different usage. Based on new solutions (which allow a different usage), entirely new use cases will be developed that ultimately unleashes the full potential of KPIs.
But let’s do that step by step and start with a little journey. Close your eyes and think about the way you consume information nowadays?
I’m pretty sure that you picture yourself with a smartphone in your hand and scrolling through a news feed. And it doesn’t matter what kind of newsfeed: Your favorite news app, Facebook, Instagram, Twitter, LinkedIn, and so on. The approach is always similar: Tailored information (even with many news apps) and a sheer unlimited amount of information you can scroll through.
Facebook changed the way we consume information
One of the colossal advantages Facebook and all the other apps provide lies in the fact that they do not have to limit their content. On the contrary, they want to have as much content as possible created, distributed and viewed. That’s why all the social networks invest enormous efforts in developing smart algorithms that calculate the relevance of content.
If we transfer this approach to the world of airline KPIs, we open the door to a world of unbelievable new opportunities. There’s no longer a necessity to stick to 12, 18, or 24 KPIs shown in a PDF document. Actually, you can create 1,000 KPIs shown in an endless KPI-feed — as long as you can ensure that most-relevant KPIs are displayed first.
Now you may ask, where should these 1,000 KPIs come from? A very good question that brings us to the second part airline’s KPI future.
Utilizing the feed-based approach provides the possibility to introduce so-called “Smart KPIs”
I’ll explain that concept with a short example: The On-Time Performance, undoubtedly, is a super-relevant KPI. However, in 90% of the cases, this KPI is boring since the value is an acceptable corridor. But your traditional solutions (Powerpoint, Dashboards, etc.) show the On-Time Performance at every point in time — regardless of the value.
Smart KPIs are significantly different. Smart KPIs means assessing KPIs and taking a look at KPIs from different perspectives.
Here are some examples to understand that powerful concept:
- Details: Probably, the overall OTP is quite ok at the moment. Still, the OTP for a specific sub fleet is dropping; a particular route is performing below standard, or a particular country is massively accounting for delays.
- Comparisons: Comparisons are a source of additional insights and value. Let’s say it’s Monday noon, and the OTP is 88.9%. On a high-level, this value seems to be ok. However, comparing that value to the last ten Mondays (same time) shows that the OTP is 10% below average. And there are dozens of comparison possibilities: Average of the same day, last month, last week, annual average, etc.
- Links: Another super-valuable approach is to link KPIs with each other. Although the overall OTP seems to be ok, a detailed assessment shows that more passengers than average are affected by the few delays.
These are only a few examples of how Smart KPIs can be used to increase the number of KPIs exponentially — and simultaneously, the value contained.
Combining situational awareness and analytical insights
Smart KPIs, from my point of view, combines two worlds: Holistic situational awareness and analytical insights. And the crazy part: Those analytical insights are provided automatically.
Nonetheless, the introduction of Smart KPIs, with all its benefits, only makes sense —and actually only is possible— if we change the way how we use KPIs — moving away from solutions that provide a fixed set of KPIs to dynamic and flexible concepts.
Additionally, Smart KPIs allow a super-contextual discussion. Since Smart KPIs are extremely specific, they enable discussing root causes instead of high-level conversations.
But let’s continue our journey we started in the beginning. Close your eyes again and imagine opening an app on your smartphone. You scroll through that app as you do on Facebook or Twitter. But hey, instead of cat videos, you scroll through a feed of smart KPIs and other operational information.
What’s needed to bring that concept to life?
To be true with you: This is nothing that happens overnight. We’ve been working on that concept for several months and entered the beta-test phase now. What we’ve experienced is that three aspects mainly drive the complexity of this concept:
- Smart KPIs: Besides having the infrastructure that allows calculating the different types of Smart KPIs, it requires a considerable effort to define and configure Smart KPIs. However, the entire concept stands and falls with the quantity and quality of Smart KPIs. That’s why we put enormous effort into it and are now able to calculate thousands of different Smart KPIs.
- Defining the relevance: With the growing number of Smart KPIs, subsequently, the number of potential KPIs that are shown in a user’s timeline grows. Accordingly, developing algorithms that define the relevance of content —and consequently, the position in a user’s feed— requires lots of brainpower.
- Real-time is a must. The whole concept only works with a real-time calculation of KPIs.
The future of airline KPIs — Summarized
The two concepts (feed-based visualization and Smart KPIs) enable an entirely new way to discover KPIs. Additionally, the value KPIs are providing is increased exponentially. Frankly speaking, the approach reflects a real game-changer when it comes to awareness and smart insights in real-time.