CUSTOMER EXPERIENCE TRANSFORMATION

IN THE AVIATION INDUSTRY: BUSINESS

STRATEGY REALIZATION THROUGH DESIGN
THINKING, INNOVATION MANAGEMENT, AND
HPT
Stanley Kan, PhD David Chung Gabriel Chung

Hong Kong Airlines (HKA) is only 10 years young and has recently begun the transition from regional
to global carrier. To achieve this transformation, HKA set clear goals and strategies for service
enhancement and innovation. An innovation funnel produced design-thinking sessions that resulted in a
custom program called “Sweeten You Up.” This program has helped identify Hong Kong Airlines as the
airline that will “go beyond.”

THE AVIATION INDUSTRY IN HONG KONG
As one of the regional hubs for Asia, Hong Kong is
connected with most urban centers in Asia and half of
the world’s population within five hours of flight time.
Currently, more than 100 airlines operate about 1,100
flights daily, linking the Hong Kong International Airport
(HKIA) to about 190 destinations worldwide, including 40
destinations on the Chinese mainland. HKIA’s passenger
and cargo throughput rose 2.9% and 3.2% to, respectively,
70.5 million passengers and 4.52 million tons in 2016. The
HKIA’s two runways are largely full, leaving airlines little
room to add new flights. HKIA is building an $18 billion
expansion which includes a third runway (see Figure 1),
which will be ready in 2024 at the earliest.
In 2016, Hong Kong Airlines commemorated its 10th
anniversary. It also received the highly esteemed 4-star rat-
ing from SKYTRAX for five consecutive years. The an-
niversary celebration was used to launch the next phase of
growth and expansion for Hong Kong Airlines, the theme
being "Flying Beyond.” Hong Kong Airlines is taking up
a fresh challenge to become the market leader through
service innovation.
STRATEGY FORMULATION
Investor Connections
Hong Kong Airlines devised an innovation strategy based
on the concept of “Flying Beyond,” a phrase used to high-
light its dedication to passengers. Going “beyond” means
constantly exceeding customer expectations, always going
the extra mile, and pushing boundaries. It represents the
desire of Hong Kong Airlines to deliver an amazing expe-
rience, one that makes every journey more enjoyable and
helps its passengers achieve their personal aspirations.
“Flying Beyond” extended beyond the passenger ex-
perience to route expansion of current and new mar-
kets; fleet growth; aircraft upgrades to the Airbus A350
(see Figure 2); and enhanced customer service, ameni-
ties, and facilities. The strategy also incorporated Hong
Kong Airlines’s freight department, New Cargo, and

Performance Improvement, vol. 00, no. 0, xxx 2018

© 2018 International Society for Performance Improvement
Published online in Wiley Online Library (wileyonlinelibrary.com) • DOI: 10.1002/pfi.21823 1
 FIGURE 1. THREE-RUNWAY SYSTEM OF THE HONG KONG INTERNATIONAL AIRPORT

FIGURE 2. HONG KONG AIRLINES

included opportunities for it to offer the highest standards
of freight service. The New Cargo network spans nearly
30 cities throughout mainland China and the rest of Asia,
providing scope for sustainable growth and improved
returns on investment.
Hong Kong Airline’s Strengths
While its competitors could be seen as somewhat staid,
Hong Kong Airlines has a reputation for being fresh
and “very Hong Kong.” It operates one of the youngest
fleets in the world and continues to progressively ex-
pand with the acquisition of various models of new
aircraft and a growing network, which ensures that the
business remains energetic. Although it is one of the ma-
jor home-based airlines in Hong Kong, it is small enough
to offer flexible and personalized service to its customers.
Hong Kong Airlines also strives to keep abreast of market
trends, while investing resources into ensuring that it
offers a straightforward and reliable service. The strength
can reflect Hong Kong Airlines’ company core values:
energetic, flexible, and reliable.
New Corporate Strategy
To realize these opportunities and succeed in its mission of
“Flying Beyond,” Hong Kong Airlines effectively pursued
focus-based strategies in conjunction with differentiation

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 Innovation strategy for
surviving and thriving in an
age of experience is to
proactively drive a fully
connected business, staff, and
customer base.
FIGURE 3. INNOVATION MATRIX FOR STRATEGIC
strategies. Focus-based strategies are most effective when ALIGNMENT
consumers have distinctive preferences or requirements
and where rival firms are not attempting to specialize in
the same target segment. Differentiation does not guaran- • Employee (Internal Customer) connections: how
tee competitive advantage, especially if standard products the company personally connects with its employees
sufficiently meet customer needs or if rapid imitation by beyond the scope of the work that they do.
competitors is possible.
If customer or employee connections in a particular ini-
A successful focus strategy depends on a customer seg-
tiative are lacking, the effort is unlikely to succeed. The
ment that is of sufficient size, has good growth potential,
four groups of the matrix are described in the following
and is not crucial to the success of other major com-
list.
petitors. Most airline companies select the first/business
classes as strategic focus. Hong Kong Airlines’ focus is not 1. Stand out: In this state, both customer connections
limited to these classes; its corporate strategies extend to and employee connections are high, which results in
economy class, which includes passengers such as young innovation and performance better than that of sim-
couples, young executives, families with kids, musicians, ilar companies. To survive, a company must balance
photographers, and so forth. its focus between customer connections and employee
The challenge of innovation realization is to find the connections. When a company maintains a high level
connection between strategy and execution. Executing of both, it will consistently outperform all others.
ideas throughout daily operations without this being in
2. Burn out: In this undesirable state, both customer
alignment with the new strategy can negatively affect em-
and employee connections are low. Companies fall
ployees’ morale and their willingness to offer their best to
into this category when they are merely maintain-
Hong Kong Airlines. This not only hurts the company cul-
ing the status quo. The world, however, does not
ture, it hurts the bottom line.
stay the same. Competitors change tactics, customers
change buyers, governments change policies, strikes
Strategic Innovation
stop production, and occasionally natural disasters
The first step is to ensure strategic alignment at the ex- wreak havoc. No matter how big or small, companies
ecutive level so that the needs of both external and inter- in “burn out” mode are at risk of being eliminated.
nal stakeholders can be met. This type of initiative aligns
3. Phase out: Here, customer connections are low, but
with a “stand out” state, as shown in the innovation matrix
employee connections are high. Those who work for
(Chung & Ngan, 2018) (see Figure 3). This ultimate result
companies in this category appear to be on autopi-
requires tying transformation actions and objectives to a
lot and functioning on their own direction. In the ab-
business rationale and rooting them in employee connec-
sence of shared goals that are defined by customer
tions.
connections and business, results are unpredictable.
All four distinct groups of the matrix shown below are
These companies often lose their best employees be-
based on
cause there’s no overall vision and the employees be-
lieve that the company is going nowhere. They feel as
• Customer connections: how the company emotion- though they’re spinning their wheels when they work
ally connects with its customer beyond the product it hard because there’s no sense of shared purpose. To
offers them. move from phase-out to stand-out status, companies

Performance Improvement • Volume 00 • Number 0 • DOI: 10.1002/pfi 3


The proper way of increasing
return on innovation is to
streamline design thinking and
to use the innovation funnel.
need to innovate and focus on creating products and
services that address unmet customer needs. This will
increase customer connections and give employees a
better chance to do a good job, thus lowering the like-
lihood of phase out.
4. Branch out: Customer connections are high in this
state, but employee connections are low. Companies
in this category often stall because employees are con-
fused, anxious, resistant, and frustrated, which leads
to false starts and inefficiencies. Although many in-
novative people do not have the patience, political
skills, and know-how to move an idea through com-
plex systems in the workplace, they typically know
which idea to push. When employee connections are
lacking, innovations slow down and fear of failure in-
creases. These challenges, however, can be overcome
with people-oriented change-management initiatives.
Hong Kong Airlines believes innovation is the only way
to disrupt the aviation industry. Therefore, from the four
types of innovation strategy (proactive, active, reactive, or
passive) (Dodgson, 2008), they selected a proactive in-
novation strategy. Companies with proactive innovation
strategies tend to have strong research orientation, self-
renewal, and first-mover advantage. They access knowl-
edge from a broad range of sources.
FIGURE 4. 5I MODEL FOR CUSTOMER EXPERIENCE
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Innovation is a complex process, one that carries
risks and needs careful and systematic management.
It is an extended process of picking up on ideas for
change and turning them into effective reality. Both de-
sign thinking and innovation management PD CEN/TS
16555-1:2013 (TS16555) set the strategy implementation
framework.
Customer Connections
Customer experience consists of the customer’s percep-
tions and related feelings caused by the one-off and cu-
mulative effects of interactions with a provider’s employ-
ees, channels, systems, or products. The interaction is
made up of three parts: (1) the customer journey, (2)
the brand touchpoints the customer interacts with, and
(3) the environments (both physical and digital). The 5i
Model for customer experience (Chung & Chung, 2018)
(see Figure 4) illustrates the needs of the customers when
they interact with a product or service. It includes three
categories: (1) did not meet expectations, (2) met expec-
tations, and (3) exceeded expectations.
Expectations unmet category
Level 1 meets customer expectations with current cus-
tomer service passively. It is reactive to customer inquiries
and meets them satisfactorily. Most organizations operate
at or below this level of customer service. This means cus-
tomers feel negative functional satisfaction and may leave
the airport and not use Hong Kong Airlines again if it is
in this category. It negatively impacts corporate branding
and business performance and threatens the organization’s
survival.
 FIGURE 5. IN SEARCH OF FULLY-CONNECTED
Expectations met category
This category represents proactive steps taken from a
variety of feedback to anticipate and resolve customers’
issues. It is about “standing in the customer’s shoes”; only
a few organizations operate here consistently. Level 2
represents basic services delivered, while Level 3 repre-
sents services that exemplify ease of use. When the brand
differentiation reflects this category, the customer will
continue to use Hong Kong Airlines, but it’s only one of a
number of potential choices for future travel.
Expectations exceeded category
The third category represents having a regular exchange
of information through conversations and interactions,
but being “in the head” of the customers is critical in
recognizing their needs before the customers themselves
do. Level 4 is about anticipating customers’ unrecognized
needs with a sense of meaning, while Level 5 is about inter-
nalization. Internalization is characterized by full internal
acceptance and adoption of the airline’s beliefs by the indi-
vidual. In this case, the customers become evangelists for
the airline, the way Apple customers are for Apple prod-
ucts. It reflects a higher-order emotional connection and
moves customer experience from great to WOW. Hong
Kong Airlines is targeting the economic class for its WOW
experience.
Designing the WOW customer experience is about in-
jecting purpose and empathy into everything the airline
business does. It is the practice of designing products and
services with the focus on the quality and awareness of the
customer experience.
STRATEGY IMPLEMENTATION
An innovation funnel can help raise the success rate of
innovation programs that meet the original goals and
business intent from 33% to 92% (Project Management
Institute, 2017). The diagram above (see Figure 5) shows
how design thinking, TS16555, and human performance
technology (HPT) frameworks interact to create an ideal
environment for strategy implementation, resulting in a
fully connected overlap of people, business, and technical
capabilities. This process
• Enhances growth, revenues, and profit from innova-
tions.
• Proactively captures value from better understanding
of future market needs and possibilities.
• Motivates employee involvement in the organization
and fosters teamwork and collaboration.
The innovation funnel is highly dependent on such
aspects as the type of innovation, the kind of organiza-
tion, or its internal structure, so there are many ways to
proceed. However, some common aspects integrating
the typical “innovation funnel“ (see Figure 6) can be
described; these include framing and insight generation,
idea management, development of the innovation project,
protection and exploitation of the outcomes, and market
introduction.
WOW the Customer
At this stage, the key question to be addressed is “Why do
users need the new innovative product or service?”
A differentiation strategy should be pursued only after
making a careful study of buyers’ needs and preferences to
determine the feasibility of incorporating one or more dif-
ferentiating features into a unique product that showcases
the desired attributes. Design thinking (d.School, 2009)
(see Figure 7) steps in with a bold, newly systematized and
nonlinear human-centered approach. This will help Hong
Kong Airlines radically change the way it explores prob-
lems and creates solutions to those problems.
Hong Kong Airlines’ management recognized that not
every staff member had the opportunity to integrate an
actual business change while completing training. There-
fore, experiential learning opportunities offered partici-
pants assignments and activities based on real-life busi-
ness challenges and tasked them with creating innovative
ideas from the beginning to the end of a problem and its
solution. This approach in teaching encouraged employ-
ees to exchange their ideas and experiences with people
who may come from various backgrounds. This experi-
ence was labeled a “hackathon.”
Here is how the hackathon worked. After the design
stages of empathize and define, the team crafted “how
Performance Improvement • Volume 00 • Number 0 • DOI: 10.1002/pfi 5
 FIGURE 6. INNOVATION FUNNEL
FIGURE 7. FIVE STAGES OF DESIGN THINKING
might we” statements—for example, “How might we give
a sweet surprise to a family?” This follows brainstorming
to discover the top ideas for solving the team’s problems.
At the end of the brainstorming session, the team prepared
a final proposal with four services (see Figure 8). One of
those solutions was called the “Sweet Birthday Fun” ser-
vice. After analyzing passengers’ details and travel pur-
pose, they discovered that quite a number of passengers’
traveled on birthdays or for honeymoons.
One of the key deliverables of the hackathon was
prototypes. The team produced a number of inexpensive,
scaled-down versions of the products or services to give
to passengers on their birthday, such as free VIP lounge
service and souvenirs or a surprise greeting card signed by
cockpit and cabin crew with a “congratulations” message
to the wedding or anniversary couple in flight. By the end
of the prototype stage, the team had a better and more in-
formed perspective of how real users would behave, think,
and feel when interacting with the “Sweet Birthday Fun”
service. The final stage of the design thinking process was
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the test stage. This refines the prototypes and solution.
All four proposals were arranged to pitch ideas to top
management (see Figure 9) for screening for the next
phase of the innovation funnel (i.e., idea management).
A growing number of businesses are using the
hackathon approach to break through corporate
bottlenecks and instill a more result-driven innovation
culture. Hackathons should not be limited to employee
awareness and identifying internal change agents. When
searching for new product or service ideas, it is beneficial
for an organization to look to the outside world to suggest
business opportunities. Specifically, this involves commu-
nicating with customers to understand how and why they
use products or services which can produce great strides
in idea generation, and it might turn customers into
evangelists.
Project Selection
At this stage, the key question to be addressed is “What
innovation results do we want to achieve?”
A successful differentiation strategy allows a company
to charge an additional price for its product and helps gain
customer referrals because consumers may recommend
the business through their social networks. The “Sweet
Birthday Fun” service is not limited to a signature service
of Hong Kong Airlines but could also became an addi-
tional revenue stream as a paid service for economy class.
The method and criteria for the evaluation and selection
of ideas were compiled within the idea management and
development of projects phase.
 FIGURE 8. EVENT DAY ONE: DISCUSSION AND BRAINSTORM

FIGURE 9. EVENT DAY TWO: PROTOTYPES AND PITCHING

Micro-selection criteria concept or theory has practical potential. A proof of con-

Proof of concept is a realization of a certain method or cept is usually small and may or may not be complete.
idea in order to demonstrate its feasibility, or a demon- A service innovation design for “Sweet Birthday Fun”
stration in principle with the aim of verifying that some (see Figure 10) included a customer-journey map, mock-

Performance Improvement • Volume 00 • Number 0 • DOI: 10.1002/pfi 7

 FIGURE 10. SERVICE INNOVATION DESIGN
up environment, role-play video, and feedback from
others.
A customer-journey map is a very simple idea; it
is a diagram that illustrates the steps your customer(s)
go through in engaging with your company, whether it
be a product, an online experience, a retail experience,
a service, or any combination thereof. The more touch-
points you have, the more complicated but necessary such
a map becomes.
The customer journey map is an oriented graph that
describes the journey of users by representing the differ-
ent touchpoints that characterize their interaction with the
service. In other words, it is a plan for “moments of truth”;
these are the positive interactions that create good feelings
in customers and that you can use at touchpoints where
frustrations exist. The customer-journey map could be ap-
plied to
• Shift a company’s perspective from inside-out to
outside-in.
• Break down silos to create one shared, organization-
wide vision.
• Assign ownership of key touchpoints to internal de-
partments.
• Target specific customers.
• Understand quantitative data.
The “Sweet Birthday Fun” service not only represents
Hong Kong Airlines’ care for passengers; it also generates
new revenue growth as both services provide pre-ordered
flowers, champagne, and birthday cakes. For just a small
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surcharge, customers can enjoy champagne and birthday
cake with their loved one.
Macro-selection criteria
A multi-project situation, which is called program man-
agement according to the Project Management Institute
(PMI) (see Figure 11), is mostly reached in the innova-
tion funnel. A strategic innovation panel was formed for
performing fitness with priorities according to the cho-
sen innovation strategy, balance of short-term and long-
term projects, high-risk vs. low-risk projects, monitoring
of the progress of the projects, and considering new ele-
ments and optimization of shared resources.
The gated funding model (or phase-gate model) as a
strong tool of portfolio management means that an idea
has to pass through a set of predetermined goals or “gates”
to progress to becoming an actual product. The gated
funding model limits risk by forcing ideas to meet pre-
determined standards. If an idea passes a gate, it gets ad-
ditional resources (people, budget, etc.) and a new set of
goals that the team will need to achieve to move on to the
next gate. The decision is made on forecasts and informa-
tion available at the time, including the business case. The
business-case presentation should answer five key ques-
tions (Drucker, 2008):
1. What is our mission?
2. Who is our customer?
3. What does the customer value?
4. What are our results?
5. What is our plan?

FIGURE 11. RELATIONSHIPS AMONG PORTFOLIOS,
PROGRAMS, AND PROJECTS
Throughout various “WOW the Customer” sessions, a
number of other customer problem-solving services were
implemented, including “Musical Instrument Protection
Case,” “24-hour WeChat customer service,” and “Happy
Angel.”
According to the general service standard of most
airlines, passengers are not allowed to bring their musical
instruments into the cabin; they must be checked in. This
rule annoys the musicians because musical instruments
are often damaged during regular baggage check-in. To
those musicians who are flying to perform overseas, such
damages can create a disaster. The Hong Kong Airlines
“Musical Instrument Protection Service“ provides pro-
tection cases (see Figure 12) free of charge for musical
instruments that are within specified dimensions and
weight. Feedback was positive, so this service extended to
both the China and the Asia regions. Besides musical in-
struments, Hong Kong Airlines has also prepared special
baggage protection cases for precision instruments. Pas-
sengers can even purchase a seat for the special baggage
protection cases.
The “24-hour WeChat customer service” has become
an innovative communication channel between the airline
and passengers. Passengers can now send their problems
to WeChat customer service, which has staff members
to help with passengers’ emergencies around the clock.
The 24-hour WeChat customer service is easy to use.
Customers simply note down their problem in the Hong
Kong Airlines WeChat subscription number, and the
customer-service staff will respond to them immediately.
The customer-service staff will contact other relevant de-
partments to help solve passengers’ problems. Passengers
no longer have to keep calling hotlines and waiting for the
telephone operator to answer the phone.
On many airline journeys, children cry and make a lot
of noise, making their parents feel helpless and affecting
other passengers’ rest in a cramped cabin. Children below
the age of three usually cry and yell on a plane because
they are small people with limited patience, there is a lack
of playing space for them, and the change in air pressure
makes them uncomfortable; older children can get bored
and restless and become attention-seeking. The “Happy
Angel” service aims to provide special care and service to
kids between newborn and 11 so as to reduce their parents’
or guardians’ burdens. A Happy Angel, wearing a specially
designed pin for easy recognition, will be assigned to every
flight to bring a carefree journey to family passengers.
The “Happy Angel” program will proactively assist kids
to settle in their seats and offers pre-ordered kids’ meals
and travel journal gift sets to give children a sweet and
happy journey. A special kid’s meal (see Figure 13) for
children 11 years old and under can be ordered and
enjoyed during the flight journey. Kids between 3 and
11 years old can receive a travel journal and colored
pencils from their Happy Angel. Kids can enjoy vari-
ous games and fill in information about their flight jour-
ney in the journal. They can approach the Happy An-
gel to ask the Captain to sign the corresponding journey
page.
Whether it is “Happy Angel,” “Sweet Birthday Fun,”
or “Give a Sweet Surprise,” the services represent a sense
of sweetness. These three services form the “Sweeten You
Up” program, which has become a feature service of Hong
Kong Airlines and a promotional highlight of the airline’s
official website. Hong Kong Airlines’ energetic services
present visible sweetness to passengers.
A clear marker of an aligned project selection is one that
is aligned with strategic priorities. Aligned selections en-
able you, your team, and the entire organization to move
in the right direction. Project selection helps people get
organized and remain focused. They lead to better use of
resources, reduce scrambling, help people anticipate prob-
lems, and prompt them to proceed with more confidence.
This is particularly important given the rapid change and
volatility, uncertainty, complexity, and ambiguity preva-
lent in the business life cycle.
Execution Excellence
At this stage, the key question to be addressed is “How do
we boost performance through scale-up and spread of in-
novative products/services?”
An innovative solution should be deployed in internal
processes or be introduced in the market and produce a
return to the organization. Managing and supporting the
scale-up of innovations produces new challenges that are
quite different from those incubating early stage pilots.
One of the leveraging tools is workflow automation. This
involves transforming the customer-journey map into an
Performance Improvement • Volume 00 • Number 0 • DOI: 10.1002/pfi 9
executable workflow and standard operating procedure
(SOP) (see Figure 14).
Service capabilities
Hong Kong Airlines takes advantage of new IT technolo-
gies to enhance the intelligence level of services and ser-
vice effectiveness. For example, instead of phone calls and
emails, more passengers are now using mobile apps to get
information. Therefore, Hong Kong Airlines built an om-
nichannel passenger interactive system (see Figure 15),
through which passengers can choose different means, in-
cluding the internet, mobile phones, social media, and
telephone hotlines to receive the latest information on
new services or new promotions, or to give feedback and
suggestions. This system will ensure zero-distance com-
munication between passengers and airlines.
Service culture
Knowing the most effective and efficient processes to get
things done with a focus on continuous improvement is
vital, but no matter the maturity level of the workflow,
FIGURE 12. “MUSICAL INSTRUMENT PROTECTION SERVICE“ PROTECTION CASES
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it can’t be perfect and address all situations. The for-
mula of effectiveness of service (see Figure 16) shows that
two components can contribute total effectiveness. The
weighting of each component is dependent on the other.
Its aim is to adapt approach and demeanor in real time to
match the shifting demands of different situations. Those
skilled at situational adaptability recognize the need to be
flexible and act differently because no two situations are
exactly alike. They know that using the same approach,
tone, and style in different settings may be consistent
but not necessarily effective. Quickly adjusting and fine-
tuning service behavior in real time allows you to be ver-
satile in different situations and interactions with others.
Situational adaptability means paying attention to
circumstances and adjusting accordingly, thus bringing
empathy in times of stress and change, firm direction in
times of uncertainty, or diplomacy in times of conflict.
Effective customer service requires continuously gauging
the impact on the customer and staying alert to make
adjustments. The outcome will be ease of transaction and
effectiveness of interaction.
 FIGURE 13. “HAPPY ANGEL“ PROVIDES PRE-ORDER KIDS’ MEALS SERVICE
FIGURE 14. “SWEET BIRTHDAY FUN“ SERVICE SOP
FIGURE 15. ALL CHANNELS IT INTERACTIVE SYSTEM
(OMNI CHANNEL)
For Hong Kong Airlines, the P.E.O.P.L.E. Culture (see
Figure 17) is at the forefront of its service effectiveness.
In terms of development, Hong Kong Airlines is a young
airline, with a team of young and energetic staff members
operating one of the youngest fleets in the world. Although
staff members and fleets will become old, the vitality and
passion of the airline as well as its pursuit of active and
passionate services will never change.
Performance Improvement • Volume 00 • Number 0 • DOI: 10.1002/pfi 11

FIGURE 16. FORMULA OF EFFECTIVENESS OF SERVICE
FIGURE 17. P.E.O.P.L.E. CULTURE
From the perspective of the people-oriented
P.E.O.P.L.E. service, the core characteristic of Hong
Kong Airlines’ service is flexibility. Frontline staff do not
handle all matters strictly by the standard operating pro-
cedure (SOP) when serving passengers. Instead they show
initiative in making changes for passengers’ benefits. They
offer more options for passengers to choose according to
their personalities and characteristics. From the perspec-
tive of pursuing excellence, Hong Kong Airlines is not
complacent about its present achievements. Targets in the
airline’s performance pledge rely on all staff members to
achieve, and the people-oriented promise is something for
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all staff members to keep in their daily work. Combining
the airline’s performance pledge, corporate image, and
pursuit, Hong Kong Airlines created a P.E.O.P.L.E. service
culture as a concrete guideline for service delivery.
• Passion to deliver: Treat customers with passion,
a sincere attitude, fairness, and kindness.
• Extra to give: Be proactive, providing comprehensive
services before passengers request them, be happy to
help others, and persevere in providing convenience
for passengers.
• Options to offer: Practice good observation and analy-
sis of passengers’ psychological characteristics, be able
to discover their needs from their look or manner, offer
more options to passengers so as to make the service as
comprehensive and perfect as possible.
• Promise to fulfill: Provide services according to pas-
senger needs and requests, striving to achieve a satis-
factory result.
• Lasting impression to create: Serving with smiles and
enthusiasm, let your service give passengers a long-
lasting and unforgettable impression.
• Emotional quotient to serve: Treat every person
equally and with goodwill, treat people with special
service needs with kindness, treat passengers with pa-
tience and calmness no matter how busy or stressed out
you are.
Market introduction
Market introduction includes identifying the intellectual-
property environment on the target markets; developing
the marketing and sales plan; securing funding and
organizational resources for market introduction and
expansion; establishing production, supply chain, cus-
tomer support and feedback; and training the involved
disciplines as required.
Customer-relationship management (CRM) is an ap-
proach for managing a company’s interaction with current
and potential customers. It uses data analysis about cus-
tomers’ history (big data) with a company to improve busi-
ness relationships with customers, specifically focusing on
customer retention and ultimately driving sales growth.
Customer-facing staff will need to make sense of the busi-
ness’s innovations, which, as customer touchpoints, come
through as new products and services. Some common
concerns faced by airline employees relate to price, time
to introduce the service or product (customer awareness),
and lack of confidence in the new service.
The answers to these concerns have the same basis.
Hong Kong Airlines must earn its customers’ trust. With-
out that, none of these ambitions can be realized, such
 FIGURE 18. TRAINING FOR TRUSTED ADVISOR TRANSFORMATION
as “WOWing” customers with their first purchase. Trust
means interacting with others in a way that gives them
confidence in one’s intentions and those of the organi-
zation. The emotional-intelligence training is one of the
tools that can help to transform the sales and service teams
into trusted advisors (see Figure 18).
A strong and aligned culture is a significant enabler of
strategy execution. A well-defined culture can enhance the
organization’s reputation and brand in the marketplace in
the eyes of customers and investors. The more a culture
is aligned with the corporate strategy, innovation strategy,
and needs of the customer, the more effective the organi-
zation will be. A strong culture allows strategy execution
to happen more quickly and efficiently.
STRATEGY EVALUATION
The results of the innovation funnel for the organiza-
tion are both financial and non-financial. The organiza-
tion should specify what, how often, against what, and by
whom results should be assessed.
As the strategic leaders began implementing changes
and building the capabilities and culture of innovation,
they needed to define measurable business results so man-
agement can track progress.
The balanced scorecard is a proven tool for measuring
the business results of an initiative. Its one-page format
also enables business leaders to easily communicate their
strategy both internally and externally, which helps to en-
gage staff and other stakeholders in carrying out that strat-
egy. It is difficult for people to help implement a strategy
they do not understand, and a balanced scorecard can help
connect them to their organization’s objectives.
A scorecard, however, is an after-the-event form of
measurement that covers such factors as return on invest-
ment, revenue growth, customer satisfaction, customer
growth, new product or service revenue, and revenue per
employee. To influence those results and ensure that goals
are achieved, it is necessary to evaluate strategic initiatives
earlier in the process.
Assessing Levels of Result
The balanced scorecard method was used to ensure that
activities were in place to achieve the right outcomes
(Kaplan & Norton, 1996). Even after the Transformation
Change initiative had been running for a year and solu-
tions were being undertaken in various parts of the change
pipeline, the team continued to enhance customer expe-
rience through innovative customer connections. They
monitored the results of the Transformation Change ini-
tiative by using Kirkpatrick’s four-level project evalua-
tion model (Kirkpatrick & Kirkpatrick, 2006). They then
combined four elements of the balanced scorecard ap-
proach with three from the Kirkpatrick model to monitor
activities and results on seven levels (Chung & Kong,
2016) (see Figure 19 and Table 1).
LEADING BUSINESS TRANSFORMATION
Many executive leaders today are aggressively trying
to transform their companies, seeking to radically im-
prove performance by changing behavior and capabilities
throughout the organization. Unfortunately, most lead-
ership groups lack a proven way of thinking about the
challenge.
Performance Improvement • Volume 00 • Number 0 • DOI: 10.1002/pfi 13

FIGURE 19. SEVEN LEVELS OF RESULT
The transformation approach (see Figure 20) was
systematic and applied human performance technology
(HPT) (ISPI, 2013) in strategic innovation. The HPT pro-
cess begins with a comparison of the present and the de-
sired levels (5i and Matrix) of individual and organiza-
tional performance to identify the performance gap. A
cause analysis is then done to determine the impact the
work environment and the people are having on perfor-
mance. This aim is to help various stakeholders to see it.
FIGURE 20. STRATEGIC INNOVATION TRANSFORMATION
14 www.ispi.org • DOI: 10.1002/pfi • XXX 2018
Once the performance gap and the causes have been de-
termined, the appropriate interventions are designed (de-
sign thinking/hackathon) and developed (innovation fun-
nel). These may include new tools and equipment, award
and reward systems, selection and placement of employ-
ees, and training and development. The interventions are
then implemented, and the change pipeline is managed.
This aim is to help various stakeholders to do it.
Evaluation is done after each phase of the process. Eval-
uation focuses on the immediate response of employees
and their ability and willingness to do the desired behav-
iors. The final evaluations are centered on improvement
of business outcomes (such as quality, productivity, sales,
customer retention, profitability, and market share) as well
as determining return on investment for the intervention
(the 7 Levels of Result). This aim is to help various stake-
holders to get it.
The organization should identify next gaps, provide
feedback loops, and establish actions in order to eliminate
the causes of the gaps found or should establish improve-
ment actions in order to improve the efficiency and the
results of the innovation. This aim is to help various stake-
holders to mind it.
Innovation Management Gap
Competitive monitoring and regular reappraisal of strat-
egy helps management avoid complacency. If the organi-
zation has implemented a management system (e.g., one
according to EN ISO 9001), the gap assessment of the
TS16555 can be integrated with the internal audit of that
general management system.
 TABLE 1 SOME KEY PERFORMANCE INDICATORS (KPI)
|
LEVEL OF RESULT KEY PERFORMANCE INDICATOR

Level 7 (L7) (BSC Financial Accumulated 7 million passengers in 2017, which represented a 10% climb year-on-year,
Perspective) and witnessed passenger growth that exceeded the industry average of 7.5%

Level 6 (L6) (BSC Customer Enterprising Hong Kong Brand Awards—“Best HK Professional Services Brand,“ SCMP
Perspective) Ranked the 2nd in Skytrax “Best Regional Airline: Asia,“ Skytrax World Airline Awards
HKIA Customer Service Excellence Programme 2017 “Cross-company Excellence
Awards—Best Customer Service of the Year,“ HKIA
Hong Kong Top Service Brand Awards 2016—Hong Kong Top Service Brand Award,
CMAHK
Customer Service Excellence Award 2016—“Grand Award – Gold Award,” Family Council
and the Home Affairs Bureau
Enterprising Hong Kong Brand Awards—“Best HK Professional Services Brandm,“ SCMP
“Corporate Excellence Award—Outstanding Customer Service 2016,” HKIA
“Cross-Company Excellence Award—Outstanding Customer Service 2016,“ HKIA
Capital Weekly Service Awards 2016, Capital Weekly
2015 Customer Relationship Excellence Awards, APCSC
2016 Feike Travel Awards—“Most Liked International/Regional Airline,“ Civil Aviation
Management Magazine
“My Favorite Regional Business Class“ at the “My Favorite Travel Brand Awards 2015,“
Flyagain.la!
Achieved a 100% satisfaction rate of Sweeten You Up service

Level 5 (L5) (BSC Internal Process
Perspective)
IATA Fast Travel Gold Certificate, International Air Transport Association (IATA)
2016/17 Airport Safety Recognition Scheme—“Corporate Safety Performance Award,“
Airport Authority Hong Kong
International Certification of ISO9001:2008 Quality Management System (QMS) achieved
by Ground Operations Department and Information Technology (IT) Department, HKACE
Met the target of inbound on-time performance

Level 4 (L4) (BSC-Learning & HR Innovation Awards 2017 “Gold—Excellence in Employee Development,“ HR Mag
Growth Perspective) The Award for Excellence in Training and Development 2017 HKA’s—Best Presentation
Award, Most Innovative & Award Gold Award, HKMA
Met the target of competent people

Level 3 (L3) (Kirkpatrick Behavior) Met the target of mystery shopper for new customer experience

Level 2 (L2) (Kirkpatrick Learning) Met the target of employees adapt to change
Met the target of knowledge/role play examination

Level 1 (L1) (Kirkpatrick Reaction) Met the target of satisfaction on change solutions

Employee Connections of organizations are anticipated as is the demand for

Successful innovation doesn’t just happen overnight in
organizations. Most executives view the transforma-
tion as too slow. They are seeking to radically improve
performance by changing processes or installing new
technologies throughout the organization. Unfortunately,
better processes and systems won’t remove the barriers to
innovation. Every so often employees are sent to “Brain-
storm Island,” an off-site location replete with trendy
lectures and creative workshops. But once they return, it’s
back to business as usual. Real value is lost, and, ultimately,
things drift back to the default disconnected status.
To break out, TS16555 vividly illustrates the five ele-
ments (see Figure 21) that underlie innovation culture.
A younger and more diverse workforce along with the
growing use of digitalization in day-to-day operations
interaction and integration in daily operations. Avoid the
temptation to separate “innovation” efforts from everyday
work. Instead, recognize that innovation is part of the
real world and create an ecosystem in which people en-
gage in key innovation behaviors. In the end, innovation
will either thrive or be threatened in any given working
environment. Top management should foster innovation
using the following elements.
Metal: Idea support
Full participation requires every staff member to be owner
minded. When staff members have an owner mental-
ity, they will do the best for themselves and hope the
company develops well. They will also pay more atten-
tion to innovation opportunities and inspirations. Such a

Performance Improvement • Volume 00 • Number 0 • DOI: 10.1002/pfi 15

 FIGURE 21. FIVE ELEMENTS FOR INNOVATION CULTURE
mentality comes from the respect and sharing of the re-
sults of the company’s development. In addition, there
should be a practical and feasible system of encouraging
full participation. For example, Hong Kong Airlines de-
signed an innovation marketing scheme to ensure full par-
ticipation. Every innovation will be given a mark accord-
ing to its contribution, and accumulated marks will result
in rewards. The company can also open up a mark-enquiry
system for staff members to check their own or their de-
partment’s accumulated marks.
Wood: Communication
Hong Kong Airlines is willing to accept new ideas without
any burden and to make new attempts that can better con-
nect passengers. Towards this direction, a Service Inno-
vation Department was created. This department curates
benchmark exemplars from outside organizations around
the world and facilitates frank exchange of ideas and so-
lutions amongst other departments internally. The theme
is to be an intelligent airline service company that solves
passengers’ problems with innovative approaches.
Water: Openness and collaboration
Hong Kong Airlines organized a service-design con-
ference with full participation from all levels and
departments including service, branding, commercial,
and IT departments with the CEO’s full participation.
After the conference, more than 500 common problems
were listed, and 600 solutions were proposed in group
discussions. The conference not only confirmed the
reform direction as “digital and very Hong Kong,” but
also concluded 40 tasks from a series of improvement
proposals and measures.
16 www.ispi.org • DOI: 10.1002/pfi • XXX 2018
Fire: Conflict consciousness
Changing status quo also creates conflict. Hong Kong
Airlines believes that some level of conflict fosters de-
bate and creativity and is essential to the innovation
process. A 360-degree sense of customer service aware-
ness feedback was developed, with stakeholders that
included passengers, staff, business partners, suppli-
ers, government organizations, and communities. It
should be actively managed as a potential source of
innovation.
Earth: Failure tolerance
Innovation brings risk. A company should be tolerant of
any innovation’s failure. Only when the company has such
tolerance will its staff’s passion for innovation not be de-
stroyed. Instead of gossiping or mocking, the company
must gather the strength of the entire staff to create a cul-
ture of daring to attempt and break through to new heights
while not fearing failure. An innovation-friendly organi-
zation focuses on the learning aspect of failure and is cau-
tious about negative sanctions.
Whether it is a case of a new CEO taking charge to
transform the company, an executive redirecting a ma-
jor business or function, or one of the hundreds of man-
agers and thousands of employees trying to make sense
of a transformation and contribute to it, leading business
transformation is an excellent step to equipping CEOs and
executive leaders to make strategy happen in a way that’s
both predictable and fast.
CONCLUSION
Hong Kong Airlines’ push to become a market leader
through service innovation is embodied in its theme of
“Flying Beyond.” In order for this to impact the air travel
community, there must be a strong connection between
the company, its employees (internal customers), and its
customers. The processes that define strategies for the
implementation of “Flying Beyond” are made straight-
forward with the innovation funnel, which aims to fully
connect its human, business, and technical capabilities.
If the business is lacking a strong innovation culture
or is not using an innovation funnel to realize its strategic
ambitions, it runs the risk of becoming disconnected
from its human, business, and technical capabilities. This
can lead to a collapse in the strategy itself; after that,
stagnation and decline are soon to follow.
Innovation in the form of new products and services
should be introduced to customers in a way that makes
them excited about Hong Kong Airlines, eventually be-
coming advocates for the airline itself. To do this, cus-
tomers need to have trust in the product, the staff, and the
business, which can happen only when the company is ex-
ceeding the customers’ expectations.
Hong Kong Airlines first defined its economic objec-
tives related to the four perspectives of the balanced score-
card: financial, customer, internal, and learning develop-
ment. After, design thinking, the hackathon, innovation
management, and the transformation approach all helped
the business realize its strategic innovations. Pursuing the
idea of becoming a fully connected airline means that
Hong Kong Airlines will continue “Flying Beyond” for
years.
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Performance Improvement • Volume 00 • Number 0 • DOI: 10.1002/pfi 17
 STANLEY KAN, PhD, director of service delivery for Hong Kong Airlines, is a veteran in the aviation industry
with more than 20 years of professional experience. He and his team are dedicated to continuously enhanc-
ing quality customer service, thereby contributing to Hong Kong Airlines being internationally recognized
as Skytrax 4-star carrier for six consecutive years and the “World’s Best Regional Airlines“ in 2017. He
graduated from the University of Nanjing with a PhD in International Human Resources Management and
has made significant contributions in service innovation initiatives over the years. He has published in lead-
ing newspapers and journals, including the article on the provision of diversified employment opportunities
for Hong Kong Lantau residents in Report on Cooperation and Development of Guangdong, Hong Kong
and Macau and the exploratory study on Hong Kong’s traditional civil aviation development in Bauhinia
Magazine. He is currently a columnist of Metro Daily Hong Kong where he advocates aviation insights and
service innovation. He may be reached at stanley.kan@hkairlines.com
DAVID CHUNG is a practitioner, author, and consultant in the business-innovation and customer-experience
management fields. He is a principal consultant of InnoEdge Consulting and has more than 15 years
of experience in consulting and training across different sectors, including retail, beauty and cosmetics,
hospitality, and financial services. He was the head of SGS Academy Hong Kong, head of enterprise
learning and consulting at Dun & Bradstreet Hong Kong, and head of marketing at two of Hong Kong’s
leading retail and service companies. He is co-author of the book Demand Chain Management and the
inventor of Hong Kong’s first patented method of customer-life-value evaluation. He serves as president of
the Hong Kong Institute of Business Innovation and chairman of the Innovation Committee at the Startup
and SME Association, He may be reached at david.chung@innoedge.com.hk
GABRIEL CHUNG, director of the Hong Kong Innovation and Performance Improvement Association, is
a practitioner and author in the innovation and organizational performance fields. The transformation
projects he has led have helped align client firms with the performance-driven changes required for strategic
success and have earned several awards, including the ISPI Award of Excellence. A Six Sigma Certified
Black Belt and seasoned facilitator, he holds professional designations in project management, business
analysis, change management, and learning and performance, with experience in the apparel, hospitality,
food and beverage, IT service, and telecommunication sectors. He may be reached at gabriel@hkipi.org

18 www.ispi.org • DOI: 10.1002/pfi • XXX 2018