Ep 11: Building a More Customer-Centric Company with Technology with Air Canada CIO Mel Crocker

Saam Motamedi: Hi there and welcome to Enterprise Software Innovators, a show where top technology executives share how they innovate at scale. In each episode, enterprise CIOs share how they’ve applied exciting new technologies and what they’ve learned along the way. I’m Saam Motamedi, a general partner at Greylock Partners.

Evan Reiser: And I’m Evan Reiser, the CEO and Founder of Abnormal Security.

Saam: Today on the show, we’re bringing you a conversation with Mel Crocker, CIO of Air Canada. Mel’s been with the company for almost five years, where he’s helped lead the company’s digital transformation initiatives.

Evan: In this conversation, Mel shares insights into the future of air travel, how he’s driving a culture of innovation at Air Canada and how they use technology to enhance the customer experience.

Well cool, maybe we should kick it off. Do you want to give us a quick overview about what your role is at Air Canada?

Mel Crocker: As the CIO of Air Canada, I've got multiple places or functions that we look after here. One is data and analytics and AI. That's a big chunk of what we do and I could talk about that a bit later. That's a big part of our innovation, big part of getting better as an airline rapidly, well, obviously we run cybersecurity, so that's a big part of our function, is keeping passengers and their information safe, secure, reliable, so that's a big part of things.

Then it's really that all the dimensions associated with moving planes and passengers safely. Picture a good 300 plus systems that are tied into getting everything from a passenger checked in on the day of flight all the way through to their destination, ideally with their bag, which has been a challenge for the industry in the last little while. Then the last part is the retail part, which is really, we sell tickets, we move cargo as well. We do things like that so that dimension of selling tickets and competing aggressively when in a very tough market is one that we put a lot of energy into as well. A collection of systems and analytics and things there as well. That's pretty much what my accountability is.

Evan: That's really cool. I think like most businesses, right, the scope of things you do are probably a lot more than people think from the outside and probably more than they really appreciate. Is there any examples you can share of maybe some surprising ways that you guys use technology that someone from the outside might not fully appreciate or understand?

Mel: Sometimes things are simpler than you think and in other cases they're actually quite complicated behind the scenes. One of the things we're looking at right now, and it almost feels like a step backwards in technology, but when a plane is at a gate and you're getting ready to launch off the plane, you've got to do a whole bunch of things to make that happen. The aircraft has to get fueled, you have to remove any sewage that may have come in when the flight was docking. You've got to be able to make sure the food's been delivered on time. There may be icing or deicing required. You've got to load the passengers, you've got to send the manifest back to the appropriate government regulations.

During all of that, you think we could just tick those things off in systems to say, "Yes that's done, and that's done and that's done," but what's happened with the airline industry, and I've only been here five years, I'm continuing to learn a lot about it pretty much every day. With the airline industry, it's not that old. It's certainly not a dot com industry, but it's not as old as many industries. A lot of those processes that I just talked about are still quite manual. One of the things we're looking aggressively at right now is, if you set up a camera that's watching the gate such that you can watch those events, certainly the ones outside the plane happen.

Then if any one of those is delayed or running quite long, like baggage loading or things like that, you can get the right folks involved to try and expedite that so that the aircraft gets off on time. Funny enough, that video image right, then throw machine learning and AI at it behind the scenes so that you can actually understand what's happening, is far more productive than trying to figure out how to get the data from all of those different data points together. That's an example of where it's a funny use of technology, but because you would've thought there's systems that the food gets delivered, somebody checks yes on an iPad and boom, it gets flowed into our systems. We see it not quite that clean in older legacy systems.

Evan: You've been there for about five years. Is there anything that you learned about where you were like, wow, this is a really cool way that we're using technology that I didn't expect when I took the job? Anything that's been surprising for you personally or more maybe more sophisticated or a more interesting use of technology that you didn't expect when you first started?

Mel: Some of this is work in progress stuff as we ease ourselves into the future. One that I would've thought would've been well created, but it's actually not as smooth as you think, but real example of it is when you get on an aircraft and you sit in your seat, there could be a number of things wrong. Maybe the in-flight entertainment in front of you is not working well, maybe the seat is not quite right, something's a bit odd, the seat belt's a bit odd.

When you think about how that gets detected, it's often a customer or the cleaning crew that goes ahead of time that would detect that, we didn't have a smooth way to get it from that detection, that initial detection to an electronic format such that we can move the replacement seat or whatever's required very quickly. The one thing that I was pleasantly surprised to see is, we've got an iPad that carries the right application on it, such that on detection, which can be done by flight crew during a flight, somebody will detect an issue that needs to be fixed.

What we're able to do is ticket, get the information down to the ground team and if things are working really well, preposition the replacement part at the gate, such that during the turn we can make that change so that the next passenger who sits in that particular seat doesn't experience the same negative thing. That's the thing we're trying to get really fast, take advantage of simple technologies that are well known by everybody and make that happen. I won't walk through all the things that have to be true for that to work, but all the way from communication from the aircraft to ground has to be reliable and work very well. All of that stuff to the right system, into the inventory management system, to the right person who's going to deliver the bag, all of that takes place in near real-time to try and make that happen. Are we as good as we want to be? Not even close, but that's the thing. The bones are in place to do that and do it well. Now it's all about parts optimization, inventory optimization, all of this stuff to try and even get ahead of that ask, but when it does come in, we can react much faster.

Saam: Mel, I think it'd be interesting just to take a step up for a moment. One of the things we think a lot about on this show is, how do organizations build the cultures, processes, foundations that enable really fast iteration and innovation? And when we think about digital transformation, that’s what we think digital transformation really means. And so, I'm curious, how do you think about and define the concept of digital transformation more broadly? And over the last several years at Air Canada, what are the things you've put in place, either foundational technology elements, cultural changes, key processes that you think have been important in terms of enabling this pace of change and innovation?

Mel: I'll try and hit it in a couple of different dimensions. First, we do have a lot of systems. You've got to keep those running and safe, secure, reliable operations all the time. From an innovation perspective, we've been growing our team quite a bit over the last few years. The company itself came through a great journey. If you go back about 11 years, very difficult financial environment, got to a stage where we had to do something different, changed our aircraft, changed our relationships with the unions at the time and then got to the place where we had to invest in technology to drive some of the optimization that really let us compete on the level that we needed to compete on. We're in that phase right now. It's a very cool time to be with Air Canada. With that in mind was how do you do this.

Well, ideas generally come from people. How do you create an environment such that, not just on the IT side, but on the business side, those folks can kick out an idea, do it in a way that they don't feel they have to defend it too strongly, and we can actually try it. We can give it a go and see if it makes sense. This year we implemented. We've done it a few times with the business where-- There's so many ideas that come from our business partners. It's like an endless stream of things that can be done because there's so many areas for improvement or optimization. Those always get prioritized and worked up in a normal portfolio assessment.

When you talk about things that are a little more leading edge, quantum computing or things like that, often those ideas come in and people don't know or not really well thought through, "This is exactly the problem it's going to solve, here's how we're going to do this." Those kinds of things, we created a simple innovation program largely in IT right now and we hope to expand it out a little broader into the company in the next little while, where we collected ideas from anybody who wanted to submit them, put them through a bit of a process where they brought their ideas to the table, we put a bit of a panel together to listen and then we took 10 ideas.

Out of those 10 ideas, two were put back on the shelf because we didn't think they were quite time to get going on them. The other eight, two went for rapid implementation and the six that we said, "You know what? Let's factor those into the right teams with the right folks because they're a great idea and it just needs to be put into almost a subset of work that's going on." The beauty is, of 10 ideas that were put together by the team, picture a slide that gets created with a bit of the story behind it, we were able to take eight of those 10 and do something meaningful in the organization. You have a net summary, tap into the people and do it in a way that they see real actions out of their ideas. I think that self-fulfilling destiny, where we get more and more of that.

Saam: Mel, you spoke about building a separate innovation program. In my mind, playing back what you said, I think about these moonshot, bigger impact, longer-term ideas; you talked about quantum as one example. Help us and our listeners dream a little bit about the future of air travel. What are some of the things that if you take a decade, two-decade long time horizon, you think could be really big technology bets that, if they work, lead to step changes in the way we all experience air travel?

Mel: I'll talk about a couple of things. This is always a guessing game of what's going to really catch on and what's not, over time. There's no doubt you've seen eVTOL, these electric vehicles or electric vertical takeoff and landing technologies. On a small scale, I think that's quite real. I think people are going to be able to order a flight in the same way that they order an Uber, then go from point A to point B through the air versus on the ground. I don't think it's that far from reality now. There's a lot of companies pushing hard on this, I think it's real.

For an airline, and specifically for Air Canada, we're staying away from that. We're more about group travel that goes a bit of a longer distance. With that in mind, that space, because it's always interesting to see those things and think they're going to have a huge impact on the Aviation Industry, but I'm not sure they're going to have a huge impact. They're certainly going to put a lot more devices in the air, which we've got to be thoughtful about, from a safe, secure, reliability perspective. One of the areas that I think is going to be very interesting to watch over the next little while is exactly how we do environment, sustainable aviation and how we drive things.

There's an energy density required. The engines have to push a certain amount of thrust, just the physics of lifting an aircraft off the ground. When you're trying to do that, it takes a tremendous amount of energy. A lot of people have looked into, can we use batteries? Batteries weigh a lot. Will you see aircraft for particular purposes that can run on batteries and carry a certain amount of cargo? I think so.

Are you going to see it in the passenger world on an aggressive way? I'm not so sure. Batteries are heavy, passengers are heavy, we're dense people. At the end of the day, I think it's about sustainable aviation fuel. I think there's a lot of focus there.

There's a lot of focus in the world on this but just the consumption of fuel and Aviation Industry, is one that I think is going to start to drive the economics on that to a level where it's real. Then if you think about it, you might even be able to, with carbon capture and sequestration and those kinds of concepts, get to a new level of travel such that when somebody decides to travel, their experience is such they don't feel like they're taking something away from the environment. In fact, you could get to a net contributor, meaning taking more carbon out than you're putting in. That's part of what we think about in the long term journey.

Most of the changes I think you're going to see, are going to be on the experience of getting onto the aircraft and getting off the aircraft. Biometrics have come a long ways. The cameras are amazing now. Conceivably, I could literally show up in an Uber or some vehicle that gets me to the airport. Many airports have bulk transportation that gets you there quite easily. You walk in, you don't have to dig out your passport, you don't have to dig out your PNR, recognizes my face, all done in a secure way, and in fact more secure than what we do today in identifying people. I can go all the way through check-in, through security, through the gate, onto the aircraft. It knows exactly who I am. It knows exactly what my ticket was, the system knows exactly where I'm seated.

It's a very smooth and easy experience where you don't actually have to come through anything significant. There's some baggage scanning technology that is starting to be looking very real where you don't, and you've all been through this, you come up to security, you dig out your laptop, sometimes you dig out your phone, maybe you take your shoes off. Those kinds of processes are all able to be made much, much better with technology.

I think the biggest changes you're going to see is not so much that we move to a foundationally different kind of technology with the aircraft, although there's some interesting stuff on supersonic that has certainly caught my eye.

I think aircraft are going to change a little in look and probably speed and efficiency. I'm not sure that the idea of people getting together just because it's an energy density challenge, they're still going to fly. That experience to get onto the aircraft and get up in the air, reliably, predictably, it's on time. You have a great experience. I think that's where you're going to see some big advances.

Saam: Going back to something you talked about earlier, I think you said data analytics and AI are key thrusts of the technology focus at Air Canada. I'd love for you to expand on that for a moment, and how do you think AI specifically is going to transform the customer experience over the coming years?

Mel: AI for us, I think about it in four dimensions. There's machine learning, there is almost advanced visualization, so almost advanced analytics, there's optimization and then there's simulation. When I think about it in those four groups of things, the one we do a lot of and we have a lot of problems around this is optimization, but I shouldn't say we do a lot of it. We have a lot of problems and we're doing more and more of it as time goes on.

We have a ton of optimization problems. Picture scheduling aircraft, scheduling flight crew, trying to line those things up, smart in time and space and everything else. It's a giant group of optimization challenges. Simulation is one where you've got the ability, you need to make a flight schedule change. Where are you going to fly to? How often are you going to fly there? What capacity of aircraft are you going to use? Is there enough maintenance on the other end to actually keep that aircraft running? Those are complicated simulations where really you want to be able to constantly think and put in place the best flight schedule, the best network, we often call it, such that you're addressing the needs of the customer or community, but you're also able to run a good business and create a good experience. A good example of experience that can go astray. If you're not very thoughtful about that network and you're not really thoughtful about how often you're going to fly, you can not serve a market the way it needs to be served.

India is a really good example for us with immigration, the way it's gone in Canada over the last few years. We have a lot of folks that want to go back to India and a long flight from Canada, it doesn't matter how you cut it and whether you choose an interim stop to get there or not, that's the sort of thing that a lot of thought goes into and a lot of simulation went into, how do we do it such that the flight lands at the right time, we get the right gate in the right locations in Delhi, et cetera.

It creates an experience that's useful for people. They get off a plane, they get on a plane here at a right time of day that it's not ruining their lives, pretty much sleep at least part of the journey across, when they get off in Delhi, it's a time of day that makes sense. These things is what can take a long flight from misery into something that's-- I don't know if a long flight's ever truly enjoyable, but at least it's less miserable. I think if we do that simulation, we run that AI right, then that happens.

Another simple example, we do a lot of maintenance, needless to say, the standards on maintenance on aircraft, for good reasons, are very, very high. To be able to do that and preposition parts in the right places and avoid what we call as an aircraft on ground, that's basically some key part has failed or something has happened that requires a part to come from another location to get resolved. Well that's all about almost machine learning, picture how are you going to track all of your inventory, watch what happens throughout a year, and then preposition the parts where they're probably most needed as time goes on, such that if you do have to cancel an aircraft, you can either fix it very rapidly or if you have to delay a flight, you can fix it very rapidly. or at the very least you've got another aircraft somewhat available.

When you're running a complex network, you don't have planes all over the place. That becomes almost unsustainable. You've got to be incredibly thoughtful about maintenance and things like that. That's where we absolutely throw a lot of AI at to try and get very smart at this.

Evan: That's so fascinating because I have to imagine like small optimizations in some of the coordination logistics. You getting 5% better utilization out of the fleet of aircraft, that turns into real impact. That's either value you can put back to the customer experience in different ways, whether it's in-flight experience or the price of the tickets or something else. It's pretty fascinating just machine learning problem.

Mel: It really is. The good thing is, if you're a technology person, like there's just no shortage of opportunities all over the place. There's some things we do well in Air Canada and there's things we aspire to do well, on-time performance is not one of our best right now. Not just pandemic, it's even pre-pandemic, we were not where we wanted to be. We're continuing to drive that to a much higher level, that's all about, well I shouldn't say it's all, but it's heavily about data, data, the right algorithms, the right kind of run-ins with either analytics or AI, or a smart plan, a smart schedule, a smart network and then on top of that, an incredibly slick operation technologies throughout that, the planning, the implementation, all of that.

Evan: Yes, it seems very intellectually stimulating to be honest. Very complex, yet I imagine fun problem to at least in the abstract, I'm sure it's difficult for many people, but--

Mel: It always makes me laugh. You hear stories of, we hold some love for rocket scientists, they got to figure this out. It's a one time you take off from here, you fly to the moon, you slingshot around, you come back. Well if you think about it, try and do that with 240 aircraft that are going to various destinations. You have to coordinate the passengers with their bags, ideally, then you've got to follow all the regulations from all the different countries to make sure you're not breaking any of those and then right in the middle of it, Russia attacks Ukraine and you have to change your network on the fly and make all this happen. Some days I wish I worked for NASA, it'd be a lot simpler.

Evan: Okay, that is going to be the quote of the episode right there. That was basically no, now we have like maybe 10 minutes after or so. One thing we like to do at the end of the episode is do a bit of like a lightning round just to get a couple like quick hits. Maybe Saam we can transition to that and just want to get a couple like shorter answers. Although I know these are a little bit meaty topics, but Saam do you want to start first.

Saam: Mel, how do you define success for a CIO?

Mel: First I think business metrics are exactly what we want them to be. We've got great on-time performance, all those kinds of things. But if we're satisfying the needs of the business, I think IT is doing it's job. Every once in a while we bring something to the business, a crazy idea where, and I'd call that a plus. You go from an A if you're doing exactly what's required for that business to thrive and succeed and evolve. You get an A plus if you can, on occasion, bring some really cool technology to the table that will change it.

Evan: Is there a common mistake that you see new CIOs making when they first step into the role?

Mel: You want to learn the company you're going into. The thing I'm happy about is that I had the opportunity before I joined I was made CIO after I joined Air Canada and I was given an opportunity to learn before being in a position where you really had to make some pretty serious decisions. I'd say that the biggest thing I've seen it doesn't go well is the incoming CIO thinks this company is like their previous company, and they're all very different

Saam: After you become CIO, is there one specific, whether it’s a process or cultural change you drove that you think had a really outsized impact on the team?

Mel: It's going to sound funny, but I think it's more leadership than anything. In process of driving, I'm not sure I would say we're there yet, but I would say even deep respect for the individuals that are in the team. The team members themselves that are trying to drive to a high performance. If we can achieve that, high-performing teams, high-performing individuals. Everybody feels good, they're deeply respected, they're adding values. Everything is working very, very well from a human perspective, I'd call that success for me. I'm a techie by nature, so that part I don't often talk about a ton, with the people parts are the ones that need more attention from me because it's not natural to me.

Evan: Is there a recent book you've read that's had a significant impact on you and can you maybe share which one and why?

Mel: I started to read Peak Mind. It's kind of a focus book. There's just enough about brains and how they work and things like that, but what I was finding, I'm sure it's true for any CIO, you have a lot of demands on your time and trying to figure out how to stay focused on a particular topic to get it to closure to then move on to the next topic really requires a person to eliminate the distractions and get it done.

Saam: We talked a lot today about what's coming from a technology perspective in the airline industry. Maybe just more generally, on a personal level, what emerging technology are you personally most excited about?

Mel: That's a really good question. I almost need to give you two answers. One is the human body biology, like some of the advances with DNA, genetic, and well eventually genetic engineering. Our understanding of the human body is making leaps and bounds now relative to the past. I am very optimistic that's going to have a huge impact on people's lives across the board. From an Air Canada perspective, hopefully, we'll have less people have issues, part or other while they're in flight and [laughs] that sort of thing.

The other one is quantum. I've always been very, very interested in quantum mechanics originally and quantum information through all these kinds of things. I think compute will go to a whole different scale in the areas where it's applicable and that could change the world from chemistry all the way to material science and everything else. Those two areas for me are the ones I spend a lot of time reading about.

Saam: Those are both really good ones. And on the first, if you haven't read Walter Isaacson's book, The Code Breaker, I'd highly recommend it. Looks like you have.

Mel: I have. She's one of my favorite authors.

Evan: Mel, thank you so much for taking time to speak with us. Really enjoyed having you on the show and appreciate you sharing your advice and wisdom with the world.

Mel: Evan and Saam I really appreciate joining you today. It’s been a lot of fun for me. 

Evan: That was Mel Crocker, CIO of Air Canada. 

Saam: Thanks for listening to the Enterprise Software Innovators podcast. I’m Saam Motamedi, a general partner at Greylock Partners.

Evan: And I’m Evan Reiser, the CEO and founder of Abnormal Security. 

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Saam: This show is produced by Luke Reiser and Josh Meer. See you next time!