I spoke with Scott this month to learn more about the company’s growth plans, the finance team’s newfound focus on data analysis, and the importance of a cross-functional mindset.

Fort Lauderdale, Florida – April 6, 2019: Spirit Airlines Airbus A319 airplane at Fort Lauderdale airport (FLL) in the United States. (Photo: GETTY).

Jeff Thomson: When you joined Spirit nearly seven years ago, you had the opportunity to build the finance function from scratch, just as the airline was expanding. As the now CFO, how has the finance team grown alongside the company’s own evolution from just 40 aircraft to 140? What role do you play in setting the company’s growth strategy?

Scott Haralson: Growing a company more than 200% in about six years with sights on doubling again over the next five is difficult and complex. When I started back in 2012, there was only a limited finance function of a few people with an accounting slant. We quickly changed that and started creating a high-functioning Financial Planning and Analysis (FP&A) group. There are many decisions to be made during these hyper-growth years and finance/FP&A has been top of mind. To make these decisions, you need a structured process and quantitative mindset. It is a delicate, ongoing balance of being stewards of the company’s resources, managing short-term profitability while also investing in the company’s infrastructure that will allow you to continue to digest this amount of growth. It takes considerable forethought from the business and finance teams. Finance must partner with the different parts of the company and work side by side in helping them make good decisions. With this amount of consistent growth, it is critical that you learn how to make decisions effectively and efficiently.

Thomson: Spirit was recently named the “most on-time carrier” for 2019 by the Department of Transportation, beating out higher-cost rivals like Delta. How do you operate at such high levels of efficiency while keeping fares lower than your competitors? Do you think consumers’ perception of low-cost carriers may be shifting towards more positive territory?

Haralson: I’m glad you noticed that. However, this hasn’t always been the case. We made the decision a few years ago to change how we operate the airline. In order to improve the long-term value of the franchise, we felt that we needed to provide a more reliable product to go with our low fares. So, we set in motion a plan to do that – and it is working. We are proud to say that in October of 2018, we finished first in on-time performance for the first time in the company’s history. We have been a top tier performer every month since then. Our guests are noticing. Our complaints are down dramatically, and our net promotor score is up considerably as well. As for the perception of “low-cost carriers” in general, I don’t know if I can say there is shift in the collective group, but there is a shift in our perception because we feel like we are different than the others. In fact, we don’t use the term “low cost” or “ULCC” internally anymore. We prefer to say that we are a high-value carrier. Our goal is for our guest to feel like they get a great value from Spirit with our low fares, an easy transaction experience and an on-time arrival.

Thomson: Spirit also has the challenge of staying innovative and investing in new technology to stay competitive. How are you innovating within the finance function? Are you making use of automation, RPA, or machine learning? What skills does today’s finance professional need to stay relevant?

Haralson: The finance function in the airline business has changed through the years. While the critical skills of financial analysis and strategic thinking are still important, the change has been a shift in how we store, retrieve, extract and disseminate data or information necessary to make better decisions. Historically, we have been 80% data management and 20% analysis. We have been trying to flip those numbers to 20% data management and 80% analysis, so the finance function becomes more valuable to the organization. It has changed our recruiting philosophy a bit as well. We still look for analytical people but now we lean to those that have a technological slant to their skillset.

We are evolving our finance and other data-intensive functions to take advantage of better automation tools, machine learning, and visualization. It is no longer IT making all of these decisions in a bubble. Finance now partners with IT on solving our data and automation issues. In my early days, we didn’t interact with IT like we do now, and this partnership will only grow in the future.

Thomson: Much of your finance career has been in the aviation industry, where your product and service is consumer-facing. How are you using technology to make the flight experience more seamless for consumers? What kind of data informs your decisions around R&D?

Haralson: Our goal for our guest to find us easy to do business with. That means that we are trying to make the end-to-end process as simple and efficient as we can make it. We want our guest to be able to purchase the things they value in their travel while increasing the speed and efficiency of their process through the airport. Most of the technology decisions we make center around this. Historically, airlines have been great order takers but not very good at e-commerce. We are as much of an e-commerce company as Amazon. Over 95% of our revenue comes from online sales. We just haven’t been good at running our technology that way, but that’s changing.  If a guest wants to book a flight or upgrade a seat, they have had to come to us to seek it out. We want to be able to use technology to push information to the guest, so they have the information they need about their flight or that they know they have options to upgrade their seat on their flight. That information push will be a drastic shift from how guests have interacted with the airline in the past.

Also, the use of technology will change how the guest interacts with Spirit at the airport. Most of what the traveling public wants us to do is take a simple process, like tagging a checked bag and dropping it off, and automate it so the guest can do it themselves and move quickly through security. Also, they want the boarding process to be simple, automated, and efficient. We will continue to use automation to help facilitate these processes. Our decisions are designed around speed and efficiency.

Thomson: Your undergraduate degree is in organizational psychology. How do you help manage change within your organization? As the industry you work in automates, how do you upskill or reskill your employees?

Haralson: I’ve always been intrigued by what motivates people. I grew up playing sports and part of what I enjoyed was understanding how to get people to give maximum effort as well as build a sense of team “Spirit”, comradery, and family. That is leadership – getting people to do things at maximum effort towards the achievement of a team goal. For Spirit, our consistent growth has meant that change has been part of our DNA. Leading through change is easier when change is constantly occurring. Change is difficult when you start from standing still. Momentum helps.

Our ability to continue to push ongoing training and skills throughout our organization and recruit new employees with good technological skills will be important as we grow. Innovation is one of our core values. From how we view the industry, the guest and our internal team members, we want to be innovative in how we run the business. That means making sure our team members continue to develop new skills. We view it as a long-term investment that will pay off.

Jeff Thomson – Forbes