Southwest Airlines Builds a Customer-First Culture with Data and Technology

Transcript

Show ID [00:00:04]:

The power of data is undeniable, and unharnessed, it's nothing but chaos.

 The amount of data was crazy. 

Can I trust it? 

You will waste money. 

Held together with duct tape. Doomed to failure.

Show ID [00:00:17]:

This season, we're solving problems in real-time to reveal the art of the possible. Making data your ally, using it to lead with confidence and clarity, helping communities and people thrive. This is Data-Driven Leadership, a show by Resultant.

Jess Carter [00:00:33]:

Welcome back to Data-Driven Leadership. Today we're taking to the skies with a fascinating episode about a unique airline company that's been redefining travel for decades. Southwest Airlines is a name synonymous with innovation in the skies. Founded in 1967, Southwest revolutionized the airline industry with its low-cost, customer-friendly approach, making air travel more accessible to millions. Today it operates as one of the largest domestic airlines in the United States, serving over 100 destinations with a business model built on simplicity, efficiency, and legendary customer service.

Jess Carter [00:01:07]:

And yes, if you've ever watched the show How I Met Your Mother, when I say legendary, I say it with all of Barney's emphasis. But behind the scenes, Southwest has always been a pioneer in leveraging data. From its early days when it used data to streamline its point-to-point flight network, which is something I absolutely want to geek out about in a future episode, to today's advanced analytics driving everything from on-time departures to personalized customer experiences, Southwest has embraced data as a critical tool for decision-making. In this episode, we'll hear from France Grenot, managing director of technology and business data delivery at Southwest Airlines. 

France plays a pivotal role in the company's data-driven transformations, spearheading efforts to weave technology and analytics into every aspect of the airline's operations. We're going to dive into Southwest Airlines and how it uses data to stay ahead in a competitive industry, from predictive maintenance and optimized routings to delivering seamless, customer-focused experiences, we’ll also discuss Southwest's unwavering commitment to data privacy and security, ensuring that customer information is handled with the utmost care and integrity it deserves. And I really appreciate how France emphasizes that she, for instance, is both a customer and an employee and cares deeply about that protection. Along the way, you'll get an inside look at how the company's unique culture, where employees treat one another as customers, drives collaboration and innovation.

Jess Carter [00:02:30]:

And just when you think you've heard it all, we are going to reveal some exciting changes Southwest is making that could redefine the way you fly. Stay tuned and learn about their bold decision to rethink seating assignments, why they're doing it, how they made the call and what it takes to make such a transformational shift. This is an episode you're not going to want to miss.

Jess Carter [00:02:53]:

Welcome back to Data-Driven Leadership. I'm your host, Jess Carter. Today we have France Grenot, managing director of technology and data business delivery at Southwest Airlines. Welcome, France.

France Grenot [00:03:05]:

Thank you, Jess, for having me.

Jess Carter [00:03:07]:

We're so excited to have you. So, first of all, I am a big Southwest enthusiast. I use it all the time since I started traveling for business. But also, it's kind of a big deal. I think we've had some bigger brands joining us, but this is one of the biggest. And so I'm excited to get a chance to talk to you.

France Grenot [00:03:23]:

Yes, me too. I love talking about Southwest Airlines. That's my favorite thing to do. And talking about data too, so it's perfect.

Jess Carter [00:03:31]:

That's a dream. How long have you been there?

France Grenot [00:03:34]:

I've been there six years.

Jess Carter [00:03:37]:

Okay.

France Grenot [00:03:38]:

Now, but I started my career in the airline industry. I had Southwest Airlines as a customer of mine for over 12 years.

Jess Carter [00:03:48]:

Wow. What about your career led you into the airline industries? How did you land there? Pun intended?

France Grenot [00:03:55]:

Very, very good question. Actually, completely not planned. So I have an engineering background. And my final internship, I did it at Air France. So in France, in Paris for an airline. And I loved it. And it was none at all. It was more in supply chain and routes and scheduling.

France Grenot [00:04:18]:

Not at all in data or technology in general, you know, but out of that, a company in the south of France contacted me. Do you want to work for us? You're fresh out of college. Why not? And I thought, gosh, it sounds so good. The Mediterranean in the French Riviera. That's really how I got to work for the airline industry and for data in general and exchange of data and more IT.

Jess Carter [00:04:49]:

So if any companies are trying to attract talent, South of France is a nice place to set up your business. Is that right? Attracts good talent. 

France Grenot:

Very good place. 

Jess Carter:

Is the airline industry…when I think about it, my assumptions, not from the outside looking in, is that it's pretty fast paced. There's a lot of change all the time. I mean, is that part of it? Do you have to kind of love that fast-paced, you know, efficiency?

France Grenot [00:05:10]:

Okay, totally. It's really fast paced. And data in general is fast paced. But you know, in general, why I love my job and why I love what I do in the airline industry is because of traveling too, right? And when you travel, usually, I mean, you can have very laid back travel, vacation, but I travel a lot. And I like the, the fast pace in general in my life. So I think it's, it matches very well as a job.

Jess Carter [00:05:40]:

That's so cool. Well, so, I mean, as somebody who's used Southwest for, I don't know, a decade, two decades, one of the things that the brand is known for is its customer service, right? Like it is. It's stood apart in that way. It's been a critical component to its mission, vision, values. Do you see that in how Southwest uses data too?

France Grenot [00:06:02]:

Yes, totally. I'm really glad you asked, actually. Yeah. We are known for hospitality. I would say you see it as a customer. I see it internally, too. I have to provide the same hospitality to my internal customer. Because of that, we have obviously, like a lot of airlines, we have a lot of customer data in our warehouse.

France Grenot [00:06:26]:

So data we truly store for a long time, 80% of the data is about customers. So that's pretty significant. And around everything we are doing around customer and data, we tend to think that our hospitality is kind of a little competitive advantage. And so we try to highlight that in the way we treat data. We're going to come to more specific examples, but one of them is I have many customer values and I think every customer has a high customer value rank of some sort. Just because I've never seen that in any other airlines in my previous experiences. You know, it's like, well, actually we don't have one customer value and we rank you, you know, not at all. We have like so many because every customer is important in a different way.

France Grenot [00:07:21]:

And of course, you know, with customer value comes like, how do you calculate it? And all the data behind to calculate it, but also all the science, which nowadays we are more and more into science, so.

Jess Carter [00:07:33]:

Right. And if you think about, I mean, for me, I was raised in the 90s and it was like from Home Alone or anything that showed a ticket counter at an airport, it's always chaos. Somebody's yelling at the ticket counter, somebody is upset. It is this summary of stress in our culture. And I feel like Southwest has done a lot to rebrand the airline industry to say this can be a non-stressful thing. And I think others have picked up on that. So I totally agree with you. I think it's a, I think it's a successful competitive advantage, but it's interesting to think, you know, I don't know when Southwest sort of made that more of a deliberate move. You probably have longitudinally a decade and a half, two and a half decades worth of data to say, hey, like customer loyalty, I suspect, is substantial compared to. Is that fair?

France Grenot [00:08:21]:

Yes, totally. Customer loyalty is huge. We have a great loyalty program, so it's based on benefits, but I think it's also based on how we treat people and customers in general. Our frontline employees are really doing their best to treat the customers as they deserve in a really good way.

Jess Carter [00:08:42]:

One of the things I've noticed too, in the last decade is, you know, you'll see on social media these videos of Southwest. People are on the plane and somebody's doing something that's like inspirational, like, it's like it goes out of the way to create these sort of magic moments that are way far beyond what anyone would have expected in the industry. How do you scale that? It's like using data to create more meaningful human interaction. What's behind the curtain there?It's just amazing to me.

France Grenot [00:09:06]:

It's a full enterprise behind. So, yeah, we have. So first it started with the people, right? With that culture of being very hospitable in general. But since a few years, you know, as we handle more and more customers every year and as the technology is allowing us to do more, too. When I started my career, it was really much big data, you know, storing a lot, a lot of data. But nowadays it became really much smart data, you know, and what do we do with that data? Not only using it for exchange, but really using it to make decisions to treat people well, as you said, we really started to modernize what we have in-house to be more useful for all our business units, including our agents, our frontline employees. We started to really have a data foundation. And as I said, customer data are really ingrained in that foundation.

France Grenot [00:10:10]:

There are multiple things to that foundation, but all the data layer of Southwest Airlines kind of work the same way on the same platforms. So we've chosen specific technologies. So, one thing is we are event-driven and we have a lot of near real-time data and we have those kind of enterprise dataset that can be shared to any software that is handling any customers, for example. And when I say it's very important, right, that data exchange and to our crew are using a software, you see them with those little iPads. Our agents at the airport are using another kind of software. They need to board people. You see them with a little computer when they scan your boarding pass and at the ticketing counter, they are using another kind of software. There is a lot of data exchange, but you want to be sure that everybody has the same information about the customer.

France Grenot [00:11:15]:

And that's kind of hard to do. And you want to be sure they have kind of a complete picture of the customer that's also really hard to do. And that’s work in progress all the time, right? As we get more and more data, we need to adapt and join more and make sure we provide that kind of 360-piece of the customer. One of the recipe is this, I think: It's really real-time enrichment trying to be able to analyze those data. On top of that real-time layer, we have of course, a warehouse layer where we do a lot of analytics.

France Grenot [00:11:51]:

And we have now a data science platform, too. Our developers or data scientists that know the business, right, the domain, the business can create things that make sense for our customers in general.

Jess Carter [00:12:06]:

Well, and so one of the things I'm curious about because there's just so many angles we could take this conversation.  One of the things I have to ask you and you can tell me if you can't talk about it. There have been murmurs in the last quarter about some changes to seating. Like right now, one of the things that Southwest is known for is like the lack of assigned seats. And people tend to have either like a love/hate really, or love that or they absolutely hate it. But there's been some murmurs online that maybe that's going away and I would love to hear like, the data story behind if that's true and how we came to that decision. Is there anything you're willing to share?

France Grenot [00:12:42]:

Yeah, I can share a little bit. First, yeah, that's totally true. And actually I'm really glad you asked these questions because I'm wearing two hats right now. I'm doing data for customer and commercial. I handed off a little bit earlier this year more operational data to a colleague of mine so that I can concentrate on solutioning the new seating assignments for customers.

Jess Carter [00:13:05]:

Oh my gosh! Yeah, I'm talking to the right person.

France Grenot [00:13:08]:

Yeah, it's really great. It has been a fun assignment. And long story short, I think. So, I'm doing architecture solutioning technically. Right? We have several other teams that are doing like, business-wise and how will that work, et cetera, et cetera. So it's a lot of data as you can imagine. That's why I was kindly asked to help on solutioning, the IT solutioning of it. So it has been a great journey, starting with data and customer surveys.

France Grenot [00:13:40]:

Right. And is it truly an advantage for us to have open seating? Right. And starting with that and really looking at the data and saying that actually maybe customers don't love it as much as we thought, as much as probably we loved it. You must think, oh, but friends, it's so much easier to do no assigned seats. That's not quite true, you know, technically speaking. Yeah. Because every software you purchase, every application for airlines, you have seats in it, you know, so we had to kind of adapt some of that. Of course, we have a lot of in-house built pieces, too.

France Grenot [00:14:23]:

But you know, what we buy, we have to kind of adapt it. Now, it's still a huge change to change it back to a more standard way of handling it. But I think that going back to that analysis, handling data and having an organization led by data, there is kind of two kinds. There is the kind of, oh, we need exchange of data real time right now, we need now decisioning based on that, et cetera. And then we need also that kind of analysis part. Right? More analytics and warehousing.

France Grenot [00:14:58]:

And that part, right, is where we survey people and we do a lot of analysis around that. So it has been several times, since I'm at Southwest, we have been looking at should we do it, should we not do it? And finally, I think more data came in about probably we should. A lot of customers are asking for it. Back to adapting to what they want. We've been there. Right now we are in the journey on making it work. Adding as I'm sitting to everything I would say while I'm responsible for more technical solution and architecture, which I absolutely love doing.

France Grenot [00:15:41]:

I've been so much enjoying the new seats, like the way they look. I'm like, I'm such a fan of the way look. Kudos to my marketing colleagues and my colleagues for really having all of that come together. So it will not only be super useful, I think for customers, they will enjoy it, but hopefully they will also find that the new seats are very pretty like I do when they enter in the cabin.

Jess Carter [00:16:13]:

Well, I'm impressed because even as we're talking, I'm playing through the other decisions Southwest has made like, like the bags that fly free. That's a big change or, you know, competitive advantage, I would assume. But even, you know, as airlines think about the actual airplanes that they purchase and use and the seating space for individuals. As I think, I generally speaking, people's body types have changed a little bit over the last 50 to 70 years and how we're adapting. And I think it'd be easy, France, for people to hear that you guys are changing back to assigned seats and think what a sunk cost. We did all this work to get it unassigned and now we're. And actually it feels like the perspective you're sharing is this isn't sunk cost, we just keep listening.

Jess Carter [00:16:58]:

We're just going to keep listening to our customers, and if they change their mind, we're going to change with them. Is that what you're getting at?

France Grenot [00:17:05]:

Yeah, absolutely. That's really where we are. We love assigned seating. It has served us well also operationally. You know, we turn airplanes pretty fast, too. We need to keep that operational, right? This is kind of a challenge in data and seating.

France Grenot [00:17:20]:

You need to make sure your customers are happy, get good seats, right? But you need also to make sure that your airline is running and it runs smoothly. So no delays, nothing like that, right, because you've just changed your seating assignments. Right. So that's kind of like all that data that needs to go back and forth from the customer side to the more operational side.

France Grenot [00:17:45]:

It's fascinating. And yeah, yeah, that's who we are, really. Truly, as I said, even internally. Right. I'm super grateful to work at Southwest and make sure that, you know, we provide a good environment for employees and keep listening at feedback and adapting our behavior.

Jess Carter [00:18:05]:

I just think that that's, it's a testament to the company's culture and vision. I get excited, like. So one of the other things. Maybe this isn't how you look at it, because I have no idea, but one of the disadvantages to that change that I was in, I was kind of curious about. In my head, if you have unassigned seating, you're more likely to fill up a plane because people aren't going to, hey, I don't like the seat options here.

Jess Carter [00:18:30]:

I'll go to the next plane. So in my head, there would be some level of loss in income or the total number if you were to look at it as the revenue each plane generates. I don't know if that's how you guys look at it, but in my head, there are real fiscal costs associated, like long term, not just implementation. But it would be more expensive to change to a assigned seat. Is that the wrong way to. I realize you can price differently, too, but is that the wrong way to look at things?

France Grenot [00:19:00]:

I'm not sure I can talk in details about pricing, etc. But it's definitely a huge piece towards the solution, right? Making sure that we are not going to lose money so that we can continue operating our customers. Right. That's kind of important. Right. You want to still be alive to be able to grow that.

France Grenot [00:19:25]:

So there are multiple techniques. Right. And same here, going back to data.

Jess Carter [00:19:30]:

Yeah.

France Grenot [00:19:31]:

I think the data landscape has proven right now that we can be better at revenue managing airlines and selling seats and products. I don't want to say very expensive, right? We are a low-cost carrier, but I want to say at the right price, at the right time. That's kind of what we want to reach for. Right. And it's always a lower price compared to our competitors, hopefully, right?

France Grenot [00:19:57]:

We want to keep being that company for our customers. But, so, globally, it has been very interesting and we are trying new techniques, to be frank, that we are going to be able to operate in that environment. Right. With assigned seating. So it has been really fun. I've been enjoying that pricing side of it in terms of data very much so with things that are a little bit more real-time compared to what we used to do, too, in the airline industry. But I think in general. Right.

France Grenot [00:20:34]:

Prices are fairly static. But yeah, I think we are trying to be a little bit more adapting to the current demand. We have the customer in mind, right? And we want to make sure they can come in our planes, right? But yeah, the data piece on the pricing side has been very interesting for me. A little bit different and really nice to see.

Jess Carter [00:20:58]:

Right. There's some modeling, I imagine, and then it's sit back as you implement and watch the customer's choices. I mean it's just going to be so fun.

France Grenot [00:21:07]:

Exactly when I was saying like real time and adapting, this is it, right? And that we've already tried to put in place that right now to see, to make sure we will be. Because we don't have data. Right. On how they will behave. We can kind of look at other airlines look at that. But it's going to be different.

France Grenot [00:21:27]:

You know, we are pretty sure of that. So because our customers have different habits already, right? So we want to make sure that we can honor their habits too.

Jess Carter [00:21:37]:

Yeah.

France Grenot [00:21:37]:

We wanted to put in place really a good data structure so that we can react to what they want, you know, when we will launch the new seat assignments. So that's the idea behind the scene.

Jess Carter [00:21:51]:

This is so cool. And I really appreciate you sharing what you can today because I'm sure there's a lot more to do. I'm just really impressed, France. Like, it's a joy to talk to someone who, yes, we can talk about data and infrastructure and architecture, but it's all built on this foundation of listening. And so you're not just talking about near real-time data to talk about near real-time data because that's cool and hip. You're talking about it because that allows you to react to your customers’ needs. So just it feels like the values are in place first to build on, to actually adapt to assigned seats, not assigned seats, bags, whatever you need to to be successful.

Jess Carter [00:22:27]:

Which gives, probably, the company a lot of confidence in its future.

France Grenot [00:22:31]:

Yes, yes. Certainly for us we are very confident. But in general, when we chose kind of more event-driven architecture, we really looked at other companies that we liked. Honestly, not companies that are necessarily super profitable or super like, just companies that were treating the customer right. And that's what we really looked at. We had a few calls with other companies. It was kind of fun to see. How do you handle data? Like totally different companies? 

France Grenot [00:23:05]:

Not at all in our industry that's really important for us to look at. Not that we have a partnership or anything with them, but just as a team-building exercise to tell you how it is kind of on us. We decided, oh, let's get together with Chick-fil-A, you know…

Jess Carter:

Oh my gosh!

France Grenot:

And talk data. Yeah, we said, oh, that's, you know, sounds like their customers are happy. My team told me that, that their customers are happy. Then we'll organize it. We'll organize helping and we shared about data, et cetera. It was really nice, right? It was really the inside of how do they do it, what is their platforms, you know, what technology choices they made, etc.

France Grenot [00:23:53]:

I thought it was really cool to see our teams enjoying, you know, talking to each other and sharing kind of some not only best practices in terms of data, but you know, like warmth around customers and warmth around treating the employees well, too.

Jess Carter [00:24:10]:

There is something super cool about that because I think it's really easy to start to feel like you're pigeonholed in an industry when you're this large and you're just trying to replicate the bigger carriers. You're just trying to replicate the bigger people who've done it before who kind of know what they're doing and you probably attract talent from those places and it's easy t. And to fight that, to say hey, we want to do it differently on purpose and here's how going to continue to do that. It's just like I really appreciate you sharing.

France Grenot [00:24:37]:

I'm not going to say it's easy, right? But that's really where we try to be. As a leader, I have a small team since not very long that is helping to make quick development and quick decision. You know, it's kind of a new thing that we tried and it has worked really well, especially for seat assignments to try to experiment a little bit, innovate in conjunction to our innovation teams that we’re feeding a little bit of data, you know, so it was pretty cool to see and I was very grateful, again, to be able to, one, you need to show value right in those things? But it was really cool to see our management was behind, you know, if, if you're going to deliver faster, we can try to help. And I was super, super grateful. And it has proven well, I think so.

France Grenot [00:25:33]:

That's great.

Jess Carter [00:25:34]:

That's amazing. That's amazing. Well, I legitimately, I would like to request the permission to circle back after seat assignments are out and hear the rest of the story. But before we wrap, is there anything else that you want to talk about that we haven't.

France Grenot [00:25:49]:

Maybe one quick thing if you don't mind, because we talked a lot about hospitality and data and how to store data. But I want to maybe add, because I feel as someone that is working with data every day and is also using it, you know, in my life and a lot of probably your listeners will think about. But what about the privacy? So this is obviously a huge concern of us as individuals, you know, that we can relate. So I just wanted to. To be, explore that with our framework. As I said, we have kind of a foundational framework for our data. We've took that into account and it's again a work of multiple teams every day to ensure data will be private right?

France Grenot [00:26:40]:

All kind of data, right? Our employee data, our obviously customers data. We are actually having kind of the same discussions for employee data because they deserve to have the privacy they need. All the guardrails. You need to put around own data. Especially when you talk about data science nowadays, not only storage and privacy in storage, but also everything. Protecting ourselves, right.

France Grenot [00:27:09]:

From cyberattacks and things like that, but also using the data well. Right? Using the data in a meaningful way, being fair. We were talking about pricing, right? Price fairness is huge. It's top of mind for us as you can do more and more with data. I think those guardrails are super important right now.

Jess Carter [00:27:32]:

I really appreciate you sharing that, too. I think sometimes it's easy to get into the how or the why, and that can be tricky. But I think the reality that that's equally a value. It's neat to hear you say you're flying Southwest, too. You're both a employee and a customer and so you care. Others care about that as well. Because that's. That's your data too, right?

France Grenot [00:27:53]:

Yeah.

Jess Carter [00:27:53]:

That's awesome. Well, France, thank you for all of this. If people want to follow you, is there is your LinkedIn? How can they kind of keep tabs on you and your career?

France Grenot [00:28:03]:

I think my LinkedIn is the best to follow or to contact me or anything, you know. Thank you so much for having me, Jess. It was a wonderful time and I was super glad to share about data and Southwest Airlines.

Jess Carter [00:28:20]:

Thank you. We'll put your LinkedIn in the show notes so people can easily follow along and find you on LinkedIn. I'm really grateful that you joined us. 

Thank you for listening. I'm your host, Jess Carter. Don't forget to follow the Data-Driven Leadership wherever you get your podcasts and rate and review giving us feedback about how these data topics are transforming your business. We can't wait for you to join us on the next episode.