Robert M. Reeder, Senior VP & CIO (retired)

June 2009TELA

• Alaska Airlines Quick Facts• Breakthrough Timeline

Alaska’s Quick Facts

• First to sell tickets on the Internet

• First to successfully use airport kiosks

• First check-in from home or office

• First airline to offer wireless check-in

What does Breakthrough mean?

A sudden advance, especially in knowledge or technique

From Innovation to Breakthrough

Adoption

The Breakthrough Timeline

Time

Impa

ct

Idea

“What if we?”

Innovation

“Let’s try this” “Leverage

the success”

Front end Development Commercialization

Adoption

The Breakthrough Timeline

Time

Impa

ct

Idea

“What if we?”

Innovation

“Let’s try this” “Leverage

the success”

Compress

Getting Started

Premise• A business process is a logically related set of activities that

define how specific tasks are performed*• Every business can be seen as a collection of business

processes that support a business model*• The potential impact of a business initiative (Innovation) is

directly proportional to one or more of the following:– The extent of change in business processes or the

business model– The commitment of capital– The resulting organizational change – The scope of change for customers– The scope of change for employees– And, perhaps, the scope of the technology

* Management Information Systems Laudon & Laudon

Return

Risk

Impact

Initiatives that have smallimpact probably havesmall returns

Return

Risk

Impact

Return

Risk

Impact

Helping people perform their tasks more efficiently and effectively

Can be foundational for an objective that has a greater return

Automation

Automation• Updating an existing transaction system• Creating a data warehouse• Improving the automation of a business function• Changing an output from paper to on-line

Return

Risk

Impact

Automation

ChangingProcesses

Processes are created, streamlined, combined, or eliminated.Business model may change.

Changing Processes• Modifying processes to take advantage of a new

system• Alaska - Line Maintenance Operation automation• Alaska - baggage Ramp Action Center • Alaska - Customer Care call center integration• Boeing - 777 on line CAD (CATIA)

• Boeing - 737 assembly line

• FoxMeyer Drug – ERP

Return

Risk

Impact

Rethinking the nature of the business, new business model, or changing the very nature of the organization

Automation

ChangingProcesses

ChangingParadigm

Changing Paradigms• Amazon.com• NetFlics• Boeing 787 composite construction• Boeing 787 supply chain – modular construction• alaskaair.com• Alaska – airport kiosks

• Home Grocer / Web Van

Return

Risk

Impact

Automation

ChangingProcesses

ChangingParadigm

Return

Risk

Impact

Automation

ChangingProcesses

ChangingParadigm

Getting StartedVisionary LeadershipTalent hits a target no one else can hit, genius hits a target no one else can see - Schopenhauer

• The right idea, right time, right plan

• The right people who can get it done

• Clear, consistent, supportive leadership

Have a method for Process Improvement

Purposeful Innovation - Balanced Portfolio

Adoption

Time

Imp

act

Idea

“What if we?”

Innovation“Let’s try this” “Leverage

the success”

Compressing the TimelineThe potential impact of a business objective is directly

proportional to one or more of the following:• The extent of change in business processes or the business

model• The commitment of capital• The resulting organizational change• The scope of change for customers• The scope of change for employees• And, perhaps, the scope of technology

Adoption

Time

Imp

act

Idea

“What if we?”

Innovation“Let’s try this” “Leverage

the success”

Compressing the Timeline

The sooner you identify and address the needs of the various stakeholders, the shorter the path will be to adoption and Breakthrough

Adoption

Time

Imp

act

Idea

“What if we?”

Innovation“Let’s try this” “Leverage

the success”

Percentage of Sales on alaskaair.com

0

5

10

15

20

25

30

35

40

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Adoption

www.alaskaair.com

Time

Impa

ct

Idea

“What if we?”

Innovation

“Let’s try this” “Leverage

the success”

6/95 - 12/95 v1 12/95 - 9/99 9/99 - presentWe’re going to be 1st! Channel conflict Let’s hit 50% by 2005

Organization change 11/99

SummaryBest practices for success• Create a balanced portfolio of projects• Find people with vision and passion for change• Augment them with people who can finish• Move the back-end work forward

– Business Process– Business Model– Organization– People– Capital– Customer

SummaryIT’s role in changing the business• Know the business• Help people see the possibilities• Develop solid executive support• Use iterative development with short cycles• Develop expertise in process improvement• Identify and involve all stakeholders - early• Use project management

• Go the extra mile to fill in the gaps

– make it happen