Bain & Company expert expects electronic flight delays

29 December 2017

The aerospace and aviation sectors have seen profits fall amid rising costs, with automation and electrification viewed as key strategies for reversing this. However, while this has seen investment in electric, autonomous and vertical-takeoff-and-landing concepts, the delivery of such projects remains a distant prospect.

A number of established aerospace players are presently making moves to prepare for an electronic revolution in the industry. Firms are aiming to take off in one or all of three emerging technologies, with early investors already pouring tens of millions of dollars into electric, autonomous and vertical-takeoff-and-landing (VTOL) concepts like Zunum Aero, Volocopter and Aurora Flight Sciences.

A failure to keep up with digital disruption in the aviation sector has already proven fatal for long-term market incumbents such as UK airline Monarch. In an attempt to avoid being similarly left behind, Boeing, one of Zunum's main investors, represents one of many legacy aerospace companies aiming to keep up with an industry-wide push to evolve electric technology. Fellow aerospace giant, Airbus, claims its quadrotor flying taxi is on track to make its first flight by the end of 2018, with plans to start flying the craft in cities by 2023 – with professional services firms Rockwell Collins and Honeywell also looking to benefit from advancements in autonomous technology.

Increasing costs have seen commercial aerospace profits fall slightly over the past year, and many industry players view electrification, automation and innovation as methods of cutting costs relating to labour, as well as drawing more business to their respective brands. Italian airways giant Alitalia entered bankruptcy earlier in 2017, following their failure to execute a $2.2 billion saving scheme drawn up by Roland Berger, involving cuts in pay and conditions, along with over 1,700 job-losses.

Bain & Company expert expects electronic flight delays

"Don't get carried away"

However, while an industrial arms-race to leverage new technology in order to drive down operating fees is understandable, an Aerospace and Defense Partner at Bain & Company has that suggested firms would do well to avoid getting carried away on the matter. Recommending the aviation sector does not neglect the provision of its usual services in the meantime, as consumers will likely have to wait longer than some more boastful companies might suggest for electronic flights, Jim Harris said, "2022 feels early to me. We're likely 15 to 20 years out for something like an electric aircraft being used for commercial passenger transportation."

Electrically fueled flights will also necessitate a structural overhaul of the present infrastructure available to airlines, as is the case with other forms of electronic travel. "The level of maintenance required is going to be significantly higher than on automobiles and you'll need the infrastructure to do that," Harris confirmed.

E-vehicles require serious investment to build out the infrastructure to refuel and service. In the UK alone, the Highways Agency has had to commit to a £15 million infrastructure programme designed to ensure that drivers are never more than 20 miles from a charging point on the UK’s A roads. Similarly, measures announced in the 2017 Queen’s Speech will see motorway services compelled to install a number of chargers for electric vehicles to supplement those already in place from Ecotricity with its Electric Highway, and other charging network providers.

New legacies

"The legacy in aerospace is hardware with a little software. Now software is becoming a much bigger part of this," Harris said, before adding legacy aerospace companies will be required to reposition to a model based on software. However, while this is going to necessitate a sustained period of sustained investment, most of which is currently taking place outside of the traditional aerospace areas, spikes in venture capital expenditure and M&A activity in the sector over the coming years are unlikely to see an immediate return on their commitment.

Harris warned that, regardless of the substantial resources involved in supporting projects developing electric, autonomous and vertical-takeoff-and-landing concepts, the first-generation of vehicles produced are unlikely to turn the world of aviation on its head. Instead, Harris anticipated that progress is more likely to come through adapting these technology advances to legacy aircraft, as a steady evolution, rather than revolution, occurs. "That will change how Americans, and people globally, get around," Harris concluded.


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Two thirds of UK employees not empowered enough to innovate

18 March 2019

A culture of equality can drive innovation at work, but only a third of UK employees feel empowered to innovate at present. This demonstrates a significant disconnect between workers and their bosses in the UK, with 76% of business leaders also claiming they empower employees to be innovative.

Despite innovation increasingly being seen as integral to the survival of businesses, innovation remains relatively difficult to achieve. A lagging disconnect between management and staff remains the driving force behind this. One study by PA Consulting previously confirmed that while 66% of companies believe they will not survive without innovation, only 24% said they had the skills needed for that, and only half thought they had the right leadership in place to change that in time.

In order to find a way around this problem, global consultancy Accenture has completed its own study into innovation, polling around 700 bosses and workers across the UK to do so. The key finding of the research is that companies with a culture of equality can see an individual’s willingness and ability to innovate improved by seven times that of the least equitable workplace cultures. At the same time, an innovation mindset is almost twice as high in the most-equal companies as in typical ones.

91% of employees want to innovate but just 34% in typical United Kingdom companies feel empowered to

What remains clear, however, is that most companies are failing to adequately create an equal culture, where staff of all ranks feel comfortable contributing new ideas. 91% of employees want to innovate but just 34% in typical UK companies feel empowered to. That is higher in the most equal companies, where 75% of staff feel confident making suggestions, compared to just 5% of the least equal, and 34% of typical companies. Since those equal companies are comparatively fewer, when averaged out, only a third of UK staff feel they are empowered to innovate.

That figure stands in stark contrast to the perceptions of UK executives, however.  76% of business leaders in Britain believe that they do indeed regularly empower their employees to innovate. As a result, it seems that leaders mistakenly believe that some circumstances encourage innovation more than they actually do. For instance, they overestimate financial rewards and underestimate purpose.

The opportunity which is presented by addressing this divorce is enormous. Accenture calculates that global gross domestic product would increase by up to £6 trillion over 10 years if the innovation mindset in all countries were raised by 10%.Top 10 workplace culture factors - by strength of impact on innovation mindsetAccording to Accenture, the best way to impact positively on a company’s innovation mindset is through the provision of relevant training – associated with a 10.5% uplift to staff’s confidence innovating. Allowing the freedom for employees to be creative followed, contributing an 8.1% boost, while ensuring that training times are flexible and the firm allows a healthy work-life balance both see a more than 7% improvement. Similarly, remote working being available and being common practice will buoy creativity by 6.9% – further demonstrating the importance of flexible working to improve innovation culture at a firm.

Commenting on the report, Rebecca Tully, executive sponsor for Human Capital and Diversity for Accenture in the UK and Ireland, said, “Our research reveals that a workplace culture of equality is an overlooked driver of innovation within companies. By understanding what motivates their employees and fostering an environment where people feel empowered, business leaders have the opportunity to unleash the innovation required to compete effectively in an era of disruption.”

The research came as part of a global survey by Accenture, which queried more than 18,000 professionals in 27 countries and 150 C-suite executives in eight countries. The overall research determined that an empowering environment is by far the most important of the three culture-of-equality categories in increasing an innovation mindset, which consists of six elements: purpose, autonomy, resources, inspiration, collaboration and experimentation. The more empowering the workplace environment, the higher the innovation mindset score.