Qantas CIO, Luc Hennekens, is possibly one of the most travelled IT leaders in Australia. So it’s appropriate his current role is in the cockpit of the country’s largest airline, helping to steer the technology team to become custodians of business and customer experience.
Hennekens grew up in the Netherlands and studied industrial engineering, but in his eagerness to pursue an international career, he moved into IT.
His first job in the 1990s followed a week-long student placement at Procter and Gamble, which led to an internship with the FMCG company’s IT function in Spain working not only with technologists but also architects, biologists and psychiatrists.
“I’m not the kind of guy that likes specialism,” Hennekens comments. “IT at P&G was interesting because the internal IT organisation was seen as one that figures out how the business gets more value through technology.
“I worked a lot with marketing and R&D on customer data, as P&G was making a science out of customer understanding.”
After stints in France, Latin America and the UK to join P&G’s newly formed Global Business Services team, Hennekens moved to Manila to help set up the shared IT services unit in the Philippines.
He then switched to HP in a business and commercial role, spending three years in the US. It was when he was looking to head back to Europe that he was asked to join a New Zealand energy company as CIO.
“The more we talked about it, the more I understood the transformation agenda and thought why not,” Hennekens says.
“Going from a market that’s highly competitive in the US, with plenty of capability, to a very small market, where we were a big fish in a small pond, brings a whole new set of challenges.
“One was reporting to a board, which I hadn’t done when I worked for HP or P&G, but it was a great experience.”
Hennekens joined Qantas in January 2013, initially as CTO.
“My first reaction was that I’m not by nature a CTO – I haven’t grown up through deep technology and have always been more on the business side,” he says.
“But I got talking to Paul Jones [former CIO and now executive general manager of strategy and planning] and we were on the same wavelength. I loved what he was doing here in Qantas.
“Qantas was clearly going through a huge transformation from being a government organisation in a monopoly and duopoly position, and into a market that has opened up to a lot more competition.
For someone who wants to work in technology and business, it’s a great opportunity.” It was also apparent the CTO role was a clear path to CIO, and Hennekens was promoted to the job nine months later.
Putting a stamp on the CIO role
While it’s inevitable any new CIO will bring an individual flair to the role, Hennekens tells CIO it’s important to be mindful of change for change’s sake.
“The first thing is not to replace strategy with something else and yank the organisation in another direction, unless it’s completely wrong,” he claims.
“Most IT strategies are not that different; the fundamentals are always in there. We are taking our costs to benchmark levels, which means taking out all costs that aren’t adding any value. Any good business needs to do that.”
Employee engagement is another strategic pillar, as is operational excellence, especially given the airline’s dependence on IT.
“Innovation and technology leadership are also going to be there, so the strategy is not by itself a big surprise, it’s how you execute it,” Hennekens continues.
“The first two years were really about getting the basics in place. The phase we’re in now is very much about taking IT from an organisation that looks after the technology, to an organisation that drives business growth.”
With 90 per cent of IT capability outsourced, Hennekens is doing this through two metrics: Customer experience and bottom-line improvement.
“You have to shift the organisation away from the intricacies and complexities of managing technology, and start with ‘what do we want to get out of that technology and how it benefits our business and our customer’,” he says.
“It’s easy to say that, but you have to review your outsourcing agreements at a contractual, governance and relationship level. It also means you have to review your organisational structure, creating completely different roles.
It means getting IT staff around every leadership table of every leadership team in the business, which we have also done. And that requires having the right people, because you don’t want to put a pure technologist in that position.
“We’ve kicked off a number of other transformational activities that really get the IT organisation to think differently about its role in the business, and to get the business to think differently about the opportunities technology brings.”
Cost is certainly a huge driver. Qantas has been through a tumultuous few years, burdened with significant financial losses and inefficiencies.
As a result, the airline is slashing $2 billion from its operating costs and is cutting 5000 jobs, a decision that has also affected the IT function.
When asked about the impetus to cut costs versus being innovative, Hennekens argues the two support each other.
Not only is IT on track to achieve its goal of getting spending levels to industry benchmarks, it’s also adopting a smarter approach to technology optimisation, he claims.
“I don’t think there’s a dollar of savings we have made that I regret, because what we’re doing is getting better at understanding what we are spending our money on,” he says.
“By doing that, we have simplified the organisation, and you get people to really focus on the things that add value, and make life better for the customer.”
However, Hennekens admits cutting staff was a sensitive issue.
“I’m really proud of my leadership team, which worked day and night with me over a short period of time to figure out how the operating model needed to change to make this happen,” he says.
Cultural emphasis is another core pillar for Hennekens, and he’s imparting a set of business led behaviours through workshops and training.
He’s also invested in a new matrix organisational structure and created a number of roles to support a more business and customer-oriented IT team.
“Traditionally, IT organisations are organised along IT and technology lines. While that is important because you get economies of scale and expertise, it’s even more important to have the horizontal lines across the technology slices that focus on why we’re doing all of this stuff, and on the outcome,” he says.
Next up: Cloud vision