How Delta Air Lines is Prioritizing Innovation in an Operationally-Intensive Culture

Matt Muta outside the Delta Flight Museum in Atlanta. (Photo by Tim Redman for Innovation Leader.)

By Scott Kirsner, Editor

It’s hard to think of a more complicated, operationally-intensive business than air transport. It’s regulated and overseen by a federal agency. Customers expect on-time arrivals, food, and frequent flier miles—and increasingly, in-flight wifi. Many of the employees are unionized. You don’t control the facilities you fly into and out of. And every new plane you add to the fleet can cost $75 million or more, and needs to be inspected regularly.

In that environment, what role does innovation play? That’s the very big question that Matt Muta, VP of Innovation and Operations Technology at Delta Air Lines, has been responsible for answering since March 2014, when he joined the company from Microsoft.

From the outset, Muta has acknowledged that the company doesn’t need an innovation group that “chases shiny objects,” he says. “We were focused on solving business problems: what are the challenges facing our airline? What are the things we could do differently?”

Impact technologies, not emerging technologies

Muta began his career in the grocery industry, working for Idaho-based Albertson’s, where he rose to the position of Vice President of E-Business. Before joining Delta, he was the Global Managing Director for Microsoft’s hospitality business.

“My background at Microsoft was always working with customers on what we call ‘impact technologies’—the kind of things that can really have a meaningful near-term impact to an organization—not emerging technologies or trailblazing technologies,” says Muta. He reports in to Delta’s IT organization.

It isn’t a cultural fit, he adds, for his team to say, “’Let’s play with emerging technologies and try to put something like cognitive computing everywhere.” Instead, the approach has been to look at other industries that involve serving customers, engaging employees, and increasing operational efficiency through use of technology, and exploring whether the approaches and tools they are using can be applied within Delta.

As an example, he cites RFID tags on luggage as a potential replacement for bar-coded stickers that need to be scanned by a human. “The passenger can know his bag is on the plane at ATL, and he knows it will arrive with him,” Muta says. “That reduces anxiety, and there’s the benefit to our staff in knowing where the bag is, if it misses the plane and needs to be rerouted. That’s what we mean by impact technology.” Delta announced a $50 million roll-out of RFID luggage tracking technology in 2016.

Muta says he sees opportunities for innovation from the moment a passenger drives up to an airport terminal. “As soon as you get curbside, immediately, you have the opportunity for interaction with us as a brand—the curbside team, ticketing, checking a bag, going through tsa, spending time in the lounge.” A big part of upgrading those interactions will involve mobile devices, Muta says: finding ways to communicate better with passengers on their own devices, and ways to equip Delta staff with mobile devices and useful apps.

Already, Muta’s team has been working with others in the IT organization on what Delta calls the “messaging engine” that sends information out to employees. A key challenge has been making sure that everyone, whether gate agent or pilot or baggage handler, has “one consistent version of the truth,” so that everyone is on the same page. “That was and continues to be a big emphasis for us,” he says.

Another project has been to port an application called snapp, which Delta’s agents use throughout the airport, onto mobile devices. Up until now, agents have been tethered to desktop PCs to take care of tasks like rebooking a passenger on an earlier flight. After two pilot tests, Delta began deploying a production version this spring, starting at its Atlanta hub.

‘Let’s resolve that as quickly as we can’

Airline seats at The Hangar, located in Atlanta’s Tech Square complex.

Muta says that more than 95 percent of his team’s projects involve “working directly with the business, and so we’re tied to the same business metrics that they are. They’re not going to do anything that isn’t going to add value, and so we’re trying to show them alternate ways of gaining that value: a different process, a technology, a vendor solution.”

But one dynamic of Delta’s operationally oriented culture—the company and its regional affiliates operate more than 5,500 flights daily—is that employees in various functions or business units try to solve problems as quickly as possible. “A lot of teams will come in with a problem statement,” Muta says, “and the operational Delta mindset is always, ‘Let’s resolve that as quickly as we can and get it into production.’” Digging deeper and trying to understand the user’s real needs is not necessarily an established approach within the company.

To introduce a new way of addressing problems and opportunities, Delta opened up an innovation lab called The Hangar in 2016, on the edge of the campus of Georgia Tech. Shortly afterward, Delta brought in Nicole Jones to run the lab.

“What Nicole and the team are doing with The Hangar is saying, ‘Let’s really try to understand what the issue is from the user’s perspective,’” Muta says. “They’ll engage with the business team, understand what their problem statement is, and say, ‘We hear you saying this. Let’s dig a little deeper. What does it actually mean?’”

Jones explains that the initial screening for any projects that The Hangar gets involved with is to “compare it to Delta’s 2017 flight plan, our company goals.” She says that projects often involve not just Hangar staff and employees from other parts of Delta, but consultants and agency staffers, student interns from Georgia Tech, and startups.

On one project, The Hangar explored ways to squeeze more stuff into an aircraft galley. “We engaged Georgia Tech students to work with us and figure out, what are some things we could do to create more space in the galley?”Jones says. “One of the things they came up with was turning the coffee mugs inward so the handles faced each other. That gave us almost two more carts worth of space on the airplane.”

Another project explored how technology might be able to track usage of Delta’s frequent flier lounges. The team from The Hangar visited 11 different Sky Club locations “and really dug in and shadowed the people in that environment,” says Muta. “They are bringing in this notion of customer-centricity and design thinking. Sometimes you thought your problem was X, based on the corporate problem statement, and it really is Y. The goal is really to get that understanding.”

And while The Hangar is located about 10 miles away from Delta’s headquarters and the Atlanta airport, Muta says it’s easy to get proof-of-concepts developed at The Hangar tested in a production environment, with both customers and Delta employees.

“We’re trying to start small, think big, and learn fast,” Muta says.

What do you measure?

Since most of Delta’s innovation projects tie in to challenges experienced by the core business, Muta cares about the same metrics the business cares about: things like operational efficiency indicators or improving Delta’s Net Promoter Score among its customers.

“There’s a whole set of metrics that we as a company align against,” he says. “So we think about those a lot. We’re not a group that is about shiny objects.”

But “speed and impact” are also important to Muta’s innovation team. “Speed of resolution is really a big push for us,” he says. Another is the organizational impact they can have by developing “solutions that address challenges that we haven’t been able to address previously.”

One way that Delta’s innovation program affects the company isn’t easy to measure: the impact on recruiting. But Muta is convinced that as the company showcases more of the ways it is using technology and testing new

ideas, the company will “attract a different type of individual who may not otherwise look at Delta as a path for their career.”

“The kinds of roles that we’re creating are very non-traditional Delta roles,” he says. “They’re roles where you come in and have a lot of freedom to explore, to learn a broad array of business practices. Versus when you’re hired to be a developer in IT, and you’re focused on one specific area. These individuals [on the innovation team] are coming in and getting exposed to all different aspects of the business, both commercial and operational.”

Democratizing innovation

Delta has a culture that can lay claim to a long history of pivots, experiments, and industry firsts. It was founded in 1924 as a crop-dusting venture; five years later, it flew its first passengers. It pioneered the hub-and-spoke system in the 1950s, flew the first regional jets in North America in the 1990s, and twice launched low-fare spin-offs (Delta Express in 1996 and Song in 2003) to try to compete with budget airlines like Southwest Airlines.

Looking ahead, Muta says one key to broadening the innovation team’s impact at Delta has been identifying more people throughout the company to work with Jones’ team at The Hangar, and getting a slice of their time dedicated to that partnership. “That may be someone who reports in to Airport Ops or In-Flight Service, but they’ll work together with Nicole’s team on these initiatives. It really helps the momentum on our side, when we have someone on the inside helping us.”

Muta also expects to have more involvement with startups as the program evolves, and more time “to think proactively about the what-if scenarios” around technologies like autonomous vehicles, and their impact on Delta’s business.

But three years into his tenure at the airline, Muta believes he’s already been successful at showing the need for a new approach to innovation. “We’ve been able to influence our business partners, I think, about why it is important to do this,” he says.

“We talk all the time about democratizing innovation throughout the company,” Muta says. “Yes, you should always have one foot grounded in the day-to-day operations. But you need to have a foot that is pivoted forward. You should always be asking, ‘What do I need to be doing to address the needs of tomorrow?’”

Whiteboard wall at The Hangar. (Photo by Tim Redman for Innovation Leader.)

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