artistic raphic Airbus

How Big Data Could Adversely Impact The Industry

Increasing reliance on ‘big data’ by aerospace companies has benefits, but also risks, as recent events at Airbus have shown.

Printed headline:  Of Data and Men

Two of Airbus’ most senior managers are leaving the company, raising big questions as to where the group—and possibly the aerospace industry as a whole—is heading.

Like most industries these days, the aerospace community is obsessed with data, “big data” to be precise. What is it about? Simply the fact that in an increasingly digital world, data is perceived as the new source of competitive advantage. By harnessing data, it is thought that one can not only create value—in the form of lower operating costs for airlines, better travel experiences for passengers or streamlined supply chains for manufacturers—but also capture a substantial chunk of this valuable information, provided one owns or has privileged access to such data.

It is through this lens that recent M&A transactions, such as UTC’s acquisition of Rockwell Collins, should be analyzed. It also is what underpins a new breed of partnership between aerospace players and data analytics shops such as GE Aviation-Teradata and Airbus-Palantir, as well as recent investments such as UTC’s Digital Accelerator or Boeing’s AnalytX. All these players are in a race to capture, channel and exploit as much data about their products as possible. Data is seen as the new gold, and they are all making a rush for it. This is the new “digital scale” game. To play and win it, aerospace companies feel compelled to make bold and fast moves because time is of the essence, sometimes to the point of turning their organizations upside down.

Airbus

In that context, the announced departure of two of Airbus’ most senior managers is of particular significance, because they epitomize the clash of cultures that characterizes the current state of the industry and the big questions it presents moving forward. While sharing the same employer, these two managers could not be more different in temperament.

One of them—John Leahy, 67 years old—has been with the OEM for 32 years. He is celebrated as the most successful salesman in commercial aviation history, having sold several hundred billion dollars’ worth of passenger jets since arriving in 1985. He raised Airbus’ share of the commercial airplanes market from 18% in 1995 to more than 50% a few years later. Under his tenure, more than 15,000 Airbus aircraft were sold. He is from the aerospace industry’s “old school,” from a time when selling airplanes was more an art than a science, when the ability to connect with a customer at a personal level was more important than the ability to decipher datasheets churned out by a software program. As he grew into his job over several decades, so did the company he represented and the culture he embodied: a culture of technological excellence, incremental innovation and shrewd marketing.

Airbus photos

John Leahy (left) exemplified the “old school” at Airbus; Paul Eremenko represented the “new school.”

The other one is Paul Eremenko, 38, who is leaving Airbus after a stint of 16 months as its chief technology officer—some would say chief disruption officer. He was brought in from Google by CEO Tom Enders to align the group more with the digital age. In that process, he destroyed a few things—noticeably Airbus’ main corporate R&D center, shook up many people and challenged the group’s historical culture. He is representative of the aerospace industry’s “new school,” the one that worships “big data” as the new holy grail of corporate success, the one that swears by “disruptive innovation,” data analytics and artificial intelligence. He is also representative of a generation of managers whose loyalty and commitment to an employer seem to go only as far as the next paycheck and for whom corporate culture is something to be fought rather than nurtured. Because in the age of big data and artificial intelligence, who needs culture anyway? 

But this is exactly where the industry could get it all wrong. While mastering and monetizing data is clearly a huge business challenge and opportunity, it should not for one second convince us that the future of aerospace belongs to or should be left to data scientists. They have a key role to play, but to grow and succeed sustainably, a company needs more than mercenary tech gurus, flying in and out, preaching the virtues of disruption, and applying a scorched-earth policy to everything inherited from the past.

To grow and succeed in the digital age, especially in a data-intensive industry like aerospace, companies need leaders who, when appropriate, are able to free themselves from the tyranny of data, who know when to stop reading a spreadsheet and start telling a story. Artificial intelligence is no substitute for emotional intelligence. Knowledge gained from data is no substitute for wisdom and common sense.

Antoine Gélain is managing director at Paragon European Partners, based in London

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