Traditional approaches to sustain profitability are losing relevance in our ever-changing macroeconomic and socio-political landscape. All companies that attempt to compete in a global space are faced with similar challenges and economic forces. Corporate executives are now required to embrace new ways of delivering their promise to shareholders. This requires a holistic examination of people, processes and systems and conscious efforts to have innovation and technology drive sustained profitability.
John Thomas Jr, Vice President Finance, Europe & the Americas at Etihad Airways has spent two decades working in the aviation world – an industry that is notorious for its tight profit margins and volatility. John has learned the importance of embracing technology changes to drive a business forward and will be presenting at Finance Innovation & Tech Fest, speaking about the use of innovation and tech to unlock untapped profitability potential and sustained growth. In the lead up to the event he shared some of his insights into innovative finance with us.
Tell us about your journey in the finance space. What has led you to your current role and what do you enjoy most about your work?
I spent my early career in diverse leadership roles, but the majority of my working years have been spent in the aviation industry. Prior to joining Etihad Airlines in 2011, I spent over a decade with British Airways where I built a professional reputation around developing financial and accounting control policies, financial reporting strategies and operating models that protect company against changing industry, market and customer conditions.
In my current role as Vice President Finance for the Americas and Europe at Etihad Airways, I am responsible for about one third of the company’s global portfolio. Here, I’ve worked at establishing a robust control environment and financial infrastructure to support the company’s aggressive growth plan. Wearing multiple hats as finance leader, business partner and executive management team member is an exciting challenge – I strive to act as a catalyst for change across the company in key functional areas.
What have you learnt about the aviation industry over your long career working for airlines? And what lessons can be applied to other industries as well?
I’ve learned over the last two decades that aviation is a volatile space. We operate off very slim margins – the profit per passenger is so small. I’ve seen airlines go out of business, and the majority of these have folded because they were not able to embrace change and innovation, they were not able to keep abreast of the changing dynamics of technology.
With that in mind a major focus of mine is that my team and the organisation as a whole must embrace cutting edge technology and ideas to remain competitive. In an industry where profit margins are so small, embracing technology innovation with a focus on optimizing profitability is the only way to survive.
Tell us about some of the innovative approaches you have taken to drive change, growth and profitability in the companies you’ve worked for.
There are a five key areas that we’ve focused on when it comes to driving technology innovation and growth in a competitive industry:
1. Embrace information technology to drive change
We have a well adopted ERP system that cuts across all support functions of the business, not just finance. Systems are well integrated across divisions and – very importantly – are fit for purpose and specialised to the needs of the division, the organisation and the industry. The ERP system is integrated across the support divisions within the organisation from IT, HR, Pricing and Finance departments, and it exists to support the overall revenue and profitability mandates of the organisation as a whole.
2. Link organisational culture to technology advancement
I’ve learned that the organisational culture and processes in place can fundamentally affect the ability of a company to be agile and move forward with innovative technology and ideas. In a volatile industry it is so important to be able to pivot quickly in the face of adversity, to change and remain competitive.
Particularly the culture around approval processes can become so complicated that it impedes the innovative ideas that can grow a company. Traditionally the role of finance has been to protect the company, and this can translate into a risk adverse culture. In the quest to protect the company against unnecessary spending, finance approval processes can be made incredibly complicated. But if the approval processes impede the business’s ability to move technology innovation forward quickly, companies will find that by the time something has been approved and implemented the needs of the business or the technology offering itself has changed, leaving the business behind the curve, and behind competitors.
We counteract this by practicing a culture that is driven by agility and technological advancement so that we remain competitive. We prioritise efficiency when it comes to approval processes around technology implementations that will drive the business forward. We flatten approval structures and speed up decision making by ensuring that only people who have the subject matter expertise to make quick decisions are involved in approval processes.
3. Optimise your human capital by focusing on people’s strengths
When it comes to innovation around people and teams we like to put working groups together around specific projects, for example business intelligence and financial analysis projects. We focus less on functional responsibilities, rather basing an individual’s role on their key strengths, which define their job description. Teams are more diverse and holistic and the outcomes are more innovative and complete. We pull together team members who can best drive forward the initiative. We also benefit from a profitability perspective because our people operate more efficiently in this way, as they have a high propensity to succeed in the work they are doing when it plays to their individual strengths.
4. Outsource where needed
Realise where your strengths and weaknesses are and don’t be afraid to seek the support of external resources where needed. If you don’t have the internal technology or resources then reach out to external sources who have proven their ability across your sector to deliver the solution. We outsource what we are not best at – this drives down costs and allows us to tap into skill sets, information and technology that we don’t have internally.
5. Lastly – deliver on what matters and focus on the bottom line.
We look forward to seeing you in Australia later this year for Finance Innovation & Tech Fest. What motivated you to make the trip and what are you most looking forward to?
I’ve experienced two decades of story building within an interesting industry. Between 2011 and now there has been exponential growth within Etihad Airlines. I started with a mandate to increase the company’s footprint across Europe and America – and we’ve seen record breaking growth in those regions over that time.
I’m looking forward to sharing some of the secrets to growing companies exponentially – how to unlock the true creative and profitability potential of a company. I hope that attendees will find it valuable and be able to replicate some of my learnings within their own companies.
About the Speaker
In his current role as Vice President Finance for the Americas and Europe at Etihad Airways, John Thomas Jr. has been instrumental in establishing a robust control environment and financial infrastructure to support the company’s aggressive growth plan. Wearing multiple hats as finance leader, business partner and executive management team member, he oversees a multi-million dollar portfolio and serves as a catalyst for change across the company in key functional areas.