Bridging strategy & execution: WestJet's strategic portfolio management journey

Hello everyone. Good morning, can you hear me okay? Yes, perfect. Firstly, massive thank you for coming to our WestJet Strategic Portfolio Management session. My name is James Parrott. I lead our SPM business for Deloitte in Canada, and I'm delighted to be joined by Oliver Bertram from WestJet, who leads their Corporate Portfolio Management office. When I first met Oliver at the WestJet offices, he actually pulled me aside and said, "James, we are a low-cost airline." It was actually quite aggressive. He said, "I cannot afford to have my WestJet project managers wasting time building status reports and roadmaps in PowerPoint." His words actually struck a chord with me, and that night I went home and I calculated over the course of my 15-year career, where have I actually spent my time? The results shocked me. Half my career aligning chevrons, a quarter of my career searching for PowerPoint icons, fixing paragraph spacing, and importantly, only a fraction of time where I should be spending it the most, adding genuine value. This was unacceptable to me, and I started to ask myself, why? Why is it that at this conference, this room, this ServiceNow ecosystem, we place such high value on a source of truth for IT infrastructure, and oh my goodness, you better have a robust CMDB and #AI and all that sort of good stuff, but when it comes to the source of truth for work within your company, for demand, for where on earth should we be prioritizing our investments, and do they align with our corporate strategy, and are we actually getting value? How much value in ROI did we get for that multi-million dollar CMDB thing? No idea, and truth be told, these have all been afterthoughts. My personal view on this is that the technology hasn't actually been up to par to digitally enable all of this. Even ServiceNow, with legacy versions of ITBM, they didn't quite hit the mark, but finally, with SPM, I think we might all have what we need, and in addition to what Oliver's gonna show you, gonna tell you, there are two additional things that I'm personally very excited about, shifts in the market, that I'm looking forward to. The first one relates to ServiceNow Go-Live cakes. Just by show of hands, who here has eaten a Go-Live cake? Probably about half of you. I challenge you to never eat a Go-Live cake ever again. By the way, this is not a health thing. I actually challenge you to add one more cake to your repertoire, to your diet. Haven't quite landed on the brand name yet, but something along the lines of The benefits we set out to achieve in the original business case have been realized cake. SPM is finally going to enable us to do this sort of stuff. We should not be celebrating technical pushes to production, whoop-dee-doo, we're no longer using this thing, we're now doing this thing in ServiceNow. We are in this business 'cause we're delivering value. So that's number one. And then the second thing I'm curious about, excited about, is actually closer to home, is about the partners, companies paying the big four, the McKinsey's, the Bain's, the BCG's, any partner in this room to come up with recommendations, plans, strategies on digital paper. I genuinely think we're at a point where you can look your partner in the eye and you can tell them, "No, no, no, no, no, I'm sorry. "That is not quite good enough for me. "You wouldn't give me a CMDB and PowerPoint. "I want you to digitize your recommendations "and put them in my SPM tool, in my SPM platform, "so you've actually given me something that I can run with, "something that's sustainable and something that's scalable." At Deloitte, we are seeing a massive rise in companies seeking to tackle these big C-suite, and I mean C-suite, exam questions, and I'm delighted to be joined and hand over to Oliver, who is gonna show you how WestJet have actually been tackling these. - First of all, good morning. My name is Oliver. I'm heading the PMO at WestJet. I'm reporting to the CFO at WestJet, so it's a CFO function. I'm also managing the decision-making body for investments and projects at WestJet, and this body contains five C-suite members, and those C-suite members, obviously, have the same questions that we see over here, but before I explain to you how we tackle those questions at WestJet, give me, please let me give you a brief overview about this company. So WestJet, we're a leading Canadian airline. We're Calgary-based. We are a private company. We are owned by a private equity corporation, Onyx. What we do, we offer affordable air travel. We have a strong focus on warm water destinations. This is the airline for Canadians that want to escape the cold. So we're going to the Caribbean. We're going to Mexico. We're going to Europe, everywhere. To all the leisure destinations. Over the last couple of years, WestJet went through an immense period of growth, but now, 28 years later, WestJet has reached a pivoting point in its business lifecycle. So we're currently facing things that we thought only the other legacy airlines are facing, such as diminishing cost advantage, huge unionization of our labor, legacy IT, who would have thought, and the need for cultural change from the startup that WestJet once was towards a mature, grown-up company. Who has flown WestJet? Hands up. Oh, quite a few. That's great. So in 2022, WestJet has redefined its strategy. And the reason why I tell you this is because the strategy pretty much defines our portfolio. So we're concentrating on the West, on leisure, and we wanna get back to our past strengths in being low-cost and affordable for Canadians to travel. So this means, for example, like concentrating on the West, that we needed to redefine or restructure our network. We needed to secure aircraft orders for the leisure market. Last year, WestJet acquired Sunwing. That's the largest tour operator in Canada. So we're now, our portfolio is now, we have many activities, post-merge activities, to merge airlines to one AOC. And of course, becoming low-cost means like a digitalization push. We are pushing for radical digitalization at WestJet at the moment. So if we look at the portfolio distribution, and this is not just only a nice donut chart that I present to you with a nicely distributed values here. We see that we invest over the next five years, triple-digit, million-value without the aircraft assets into our guest value proposition. As for example, into strengthening the attractiveness of our loyalty program, or into network fleet and growth by, for example, reconfiguration of our cabins, or harmonizing our aircraft fleet post-merger integration with Sunwing Airlines. Or on the efficiency and cost-based side, we're investing a lot across the business into automation. As for example, how do we manage irregularities of operations in future to automatically rebook passengers to other flights? If I show this to a WestJetter, the typical answer would be, let's roll up our sleeves and get it done. What a great attitude. But as companies mature and getting more complex, it is not so easy for a single business unit just to roll up the sleeves and get it done. You need more cross-functional coordination. You need more prioritization across the business units. You need to have decisions coordinated. You need clear accountabilities, organizational discipline, et cetera, PP. So at WestJet now, we put more emphasis into planning to be more confident in the implementation phase of projects. And our journey over the last 12 months, we've implemented the Portfolio Board as decision party for all investments at WestJet. We are also investing into the capabilities of our employees. More than 250 employees are targeted for basic and advanced project management trainings across all business units at WestJet. More than 100 colleagues of the leadership level are being trained in what is the role of a project sponsor. So these are measures to, like pieces of the puzzle to get a better understanding how we tackle projects, how we increase throughput at our organization. And last but not least, we've centralized budgets, we've centralized planning and execution and reporting data when it comes to projects and portfolios. And this is where SPM plays a vital role for us. This is where the SPM modules, resource management, project management, portfolio management, and demand management help us to increase confidence into our portfolio delivery. And I give you three examples where I show you how we did it in the past and how we're now doing it with SPM. So example number one, SPM helps us to resolve resource conflicts. So here you need to know that at WestJet, everybody who works on project also has line duties. So which means the number one uncertainty for each project is, are these resources available? Are they committed? Do they stay committed over the project duration? And in the past, how we tried to solve this issue was, I hope this works now. So we asked for resources via email. We created Excel sheets, resource sheets. We asked VPs to co-sign documents. We attached those resource sheets to decision papers. Changes during the project durations were not traceable anymore. Actually, the resource commitments were outdated only a few weeks after the decision has been made at the portfolio board. And what we faced with this approach, most projects were delayed due to resource conflicts at WestJet. Now, with SPM in place, I hope this works. So with SPM in place, managers of resources across the business are now allocating their resources to specific projects. The resource manager has full transparency of where his or her resources are being allocated and assigned to. The individual contributor, everybody who works on project knows exactly to what projects they are committed to. In what capacity. The project managers, they now have transparency whether or not the resources they have requested are allocated and committed. And the portfolio board as the major decision body at WestJet for projects has full transparency about upcoming demands and supplies in terms of resources for projects. Which means we are now able to set us goals. We want resource plans to be in confidence level of 95%. And if we have resource conflicts of higher than 5% in our plans, in our portfolio, this will trigger action. This will trigger action for correction. Example number two. SPM helps us raise the bar for higher quality. At WestJet, projects are being executed by project managers across different business units. They use, most of the time, their own standards. They can choose their own standards. And how they did it in the past was, as for example here, what you can see, creating plans in Excel or in MS projects. Or an MS project. We rarely saw projects with a critical path calculated. So we haven't had any early indicators if projects deviate from plan. Example, we've had a project with a single task being 76 days long. And for 75 days, this project reported green. And on the 76th day, it suddenly reported red. And we saw that all over the world. So we had a board. Now with SPM in place, now with SPM in place, all the project data, the planning data and reporting data has been completely shifted and moved to SPM. We require project managers to break down their work into increments, to connect the tasks, to assign the tasks to individuals, and to calculate the critical path. Which means the portfolio board or the steering committees of various projects have now early indicators in place whether or not a certain project deviates from plan. And the best thing of all is, we don't want project managers to work on PowerPoint presentations. No. Such a status report is now just one click away in SPM for the project managers to run through the steer codes or to report to other stakeholders. And our last example here is SPM helps us shift to long-term planning. So obviously, we at WestJet want to align our portfolio to our strategy. But our number three concern or our number three difficulty we face is the inability to plan forward accordingly. And I'm not talking about financial planning. So we're pretty good in setting financial targets. I'm more talking about how do we capture the right initiatives, projects across all business units and sequence them over time so that they create most value for the company. So in the past, and it was only just one year ago where we started collecting projects and initiatives across all business units in Excel. It was actually the first time that we saw all project in one Excel sheet with timelines behind that. And then, as you can see here, copied into PowerPoint presentation, discussed with the portfolio board members or with the executive board members. Now, with SPM in place, it's a complete different operating mode. We have now all demands, all upcoming demands for the next couple of years moved into SPM. We have roadmaps in SPM that are continuously managed by the PMO and by the business itself. And we can now forecast when is the right time to initiate one or the other project. So this helped us to bridge the gap between strategy presentations, fancy strategy presentations that are usually being discussed at XCOM level and the actual planning of our project portfolio at WestJet. And here, as I promised, we also had our Go-Live cake. James, yeah, it was delicious, but I hope it's being the last one. - Awesome, thank you, Oliver. Thank you, everyone. We are out of time, so much appreciated. Don't hesitate to reach out. Thank you. (audience applauding)