Main content

How American Airlines is using HR as a driver for change - a SuccessConnect 2018 use case

Jon Reed Profile picture for user jreed September 21, 2018
Airlines have an uphill battle with customer sentiment. But there's no better place to start than the employee experience. After his keynote segment at SuccessConnect 2018, American Airlines' Mark Mitchell shared his HR transformation in progress - and what it means to customers.

Change ahead sign with clouds in sky © bahrialtay –
On the SAP SuccessConnect keynote stage, American Airlines' Mark Mitchell said something that made an impression:

We're the biggest airline, but we're on a mission to become the best.

That's a slight paraphrase, but the point is - after the keynote, I had the chance to ask Mitchell exactly what he meant by that. Mitchell, who is American Airlines' Managing Director, HR Shared Services, told me:

When you look back at American's history, there is without question facts and data that would say back in the 70's and 80's, the airline of choice, the greatest airline was American Airlines. So we recognize that the journey in the last couple of decades with the mergers, the acquisitions, the changes, that we aren't where we want to be.

So what exactly is the "greatest airline in the world"?

Most of us have strong opinions on airlines based on our flying experiences - I certainly do. That's what American Airlines wants to change. Mitchell told me that a major turning point was the American Airlines' merger with US Airways:

Doug Parker who's our chairman and CEO, set a very clear tone early on to bring the two companies together, and he picked his words very carefully. That his stated goal was to restore American Airlines to the greatest airline in the world.

But if we don't equate biggest with greatest, then what is the true definition of the "greatest airline in the world"? How do we get there? Mitchell cites these factors:

  • A terrific product - "We have the youngest fleet; we continue to buy new planes and invest in our fleet."
  • Largest flying network - "It's having a network that gets consumers to where they want to be in an effective and a timely and efficient manner. I think the largest network does matter, it gives people more options."
  • Superior customer experience - "Most importantly, when it comes back to the greatest airline in the world, it does center around the customer experience."

I'm not sure if airlines feel as much pressure on customer experience as they should, but I'll park that for now. Where I agree with Mitchell 100 percent is that customer experience directly ties to employee morale:

The greatest airline in the world looks like a company that has a great team... We believe that the people delivering that customer experience then lead to the financial objectives.

Changing the HR platform - "The cloud mattered to us"

And how does SuccessFactors fit into all that?

We honed in on SuccessFactors for three or four key reasons. We are a long storied partner with SAP. We were the first company to implement North American payroll with SAP in the late 90s.

More importantly, the cloud mattered to us. We needed to be part of an evolving employee experience that SuccessFactors could help enable. We had to revolutionize parts of our business when it comes to transforming how we do succession planning, and hiring the right skills.

The second reason? Extensibility. That's a must when you have about 150 interfaces to your HR data. American Airlines is now live with SuccessFactors, service center case manager, Fieldglass, and payroll. It's the integration of all those product and interfaces that's the key.

Third? Global reach. Their HR systems serve 130,00 global employees in 60 countries:

We're able to make a global experience local with what SuccessFactors can bring to life like localized payroll systems... We want to be known as a global airline that appeals to consumers. To do this, you've got to have an employee experience around the globe that meets those expectations.

American Airline's first SuccessFactors go-live was the Talent suite in September of 2016. Next up: Performance Management and Compensation in the first quarter of 2017. Employee Central went live March 26th, and payroll two weeks late on SAP private cloud (HANA Enterprise Cloud, or HEC). Whew! "We had a lot going on," says Mitchell.

Opting into cloud functionality - a big differentiator

Today, SuccessFactors touches 140,000 American Airlines employees, or "team members" as Mitchell calls them, but if you count those receiving pensions, and travel benefits, that number exceeds 200,000.

During Mitchell's appearance on a customer panel for media/analysts, he said something that made an impression on SuccessFactors expert and customer advocate Jarret Pazahanick. Pazahanick pointed out to me that American Airlines seemed to be absorbing - aka "opting in" - to a good chunk of the functionality updates in each quarterly release. Not all customers are able to do that. I asked Mitchell: did his team have to work to get to that point?

Absolutely. We were very conservative during the go-live period, so from the time we went live, we were basically taking only the required functionality to be very careful we didn't overcomplicate our go-live with Employee Central.

Now that we are live, clearly the first benefit we got from a quarterly release was GDPR compliance, both delivered functionality and opt-in functionalities. So that's perfect for us. We're about to go through our second quarterly release, now that we're live on 1808.

The mandate to activate new SuccessFactors functionality is now more aggressive:

Our admin team is doing what they now have been tasked to do, which is: "Don't be conservative as you were; work at what makes sense. You know each of the core modules of benefits and business partners and compensation; you know their business. Bring to life the kind of things that make sense from an opt-in perspective each quarter going forward, so we've clearly gotten more aggressive. Again, it's two quarters that - we're a work in progress.

Whenever you're a "work in progress," you need the firm support of management, including the CIO and CFO. Mitchell told the media session that the support has been unwavering, despite some budget expansions:

Our CIO, our CHRO, our financial team on the CFO side, has been fully supportive. The investment is a little bit larger than we expected in the beginning, but I think now we are live, we have begun to see the benefits in changing the culture - whether it's the single user experience, single version of the truth with our employees' data as they interact with us, whether it's operating on the service center platform and seeing how it handling seamlessly 600 cases a day, rebuilding that trust one case at a time. They are seeing that result.

Mitchell expects more quantifiable benefits to come in time:

I think the financials and the measurable, more tangible methods, will come as we get more mature with Workforce Analytics and have the second year of our employee surveys. That's a bit more futuristic, but without question they are fully supportive. We're measuring the right things going forward.

He expects SAP's Workforce Analytics to play a key role:

Workforce Analytics helps us become more measurable, but also identify the areas where we can make a change, and have the biggest impact on supporting the business.

The wrap

Given Mitchell's interest in analytics, I figured he'd have a reaction to one of the bigger announcements of the conference: the upcoming release of SuccessFactors analytics/reporting combo (aka People Analytics), built on the SAP Analytics Cloud (which will eventually replace Workforce Analytics). Though the announced roadmap will take time for SAP to achieve, Mitchell is watching closely:

On the one hand, I'm thinking, "Another project?" But on the other hand, it's about how you incorporate reporting and analytics under a single common tool that Greg Tomb talked about, and bringing that to life.

That lines up well with American Airlines' planned booth in analytics talent:

2019 is going to be a very exciting year for us, because in addition to new tools, we are building a stronger analytics team at American within the people department, so the two of those together should bring some powerful results as we go forward. That's exciting.

Mitchell and I had a good debate on the how accountable airlines are to their customers. He made some key points on why airlines have to put customer experience first. That also ties to his own change management efforts. It's enough fodder for another piece. I'm flying American Airlines next week, so I'll be able to put Mitchell's views to the personal test.

UNLEASH Amsterdam 2018 banner - diginomica supports
A grey colored placeholder image