I recently received an email from a friend…a retired airline pilot…asking what I thought about the current Continental Airline-United Airline merger now underway. I found it interesting that my thoughts on the merger are on a personal level. “I hope it doesn’t screw up my Continental experience.” But, at the end of the day, isn’t that the only thought that matters?
I have for years been loyal to Continental and pretty passionate about it. I like what they’ve accomplished, I like how they got it done, and I like how they carry it forward. That is the test of a team with a business model, not the other way around. And that, in itself, is what makes Continental an exception to the rule in the business world, much less the airline industry. So I thought I’d share a personal conversation about team culture and leadership. For now, let’s forget about recession and oil, international versus domestic markets, or Cost Per Available Seat Mile. I want to talk about this from the vantage of the end-result… from the seat. In other words, I want to talk about execution.
My thoughts go back to June of 2004, when I was flying out into the Pacific to one of my favorite islands, Saipan, to of prepare for the 60th Anniversary of the WWII battle that took place there. Following behind me a week later would be my group of WWII Marine veterans and their families, coming out with my assistant tour director. I was flying Continental Airlines.
I had flown to the west coast on a different airline and let’s just say that I was glad to be back aboard Continental, away from the panic, chaos, helplessness, and the “Drill Sergeants” serving as flight attendants and “gate keepers.” Once in the air from LAX toward Honolulu, I commented to the Continental flight attendant how relieved I was to be back on board an airline with “real people, and real Coke.” I then chuckled and said, “I guess we can thank Gordon for that,” a reference to Gordon Bethune, the then CEO of Continental. I was surprised when that flight attendant suddenly stopped what she was doing, looked me in the eye, and said with sincerity, “Oh, I just love that man! If he retires next year, I don’t know what I’ll do.” For the rest of the flight, I suffered no shortages of ice-cold Coca-Cola, miscellaneous snacks, and playing cards.
Go back in time and recall when, until the mid-Nineties, Continental Airlines was rated dead last in the industry among the major US carriers. What’s worse is that they had a terrible reputation with flyers for haphazard departure times, lost luggage, and customer relations overall. They were predictably unpredictable. In 1995, they reported their tenth consecutive year of losses and had gone through ten CEO’s over that same ten-year period. That was the Continental Airlines that Gordon Bethune inherited in February 1994.
Within a year of his assuming the role of CEO, Bethune’s Continental Airlines had gone from worst to first, both by industry standards, and in customer satisfaction. The company that, in 1994, lost $204 million ended the losing streak in 1995, actually earning $202 million, followed by $556 million in 1996. What happened?
Bethune had immediately assembled a trusted team that had the courage to face the brutal facts, and taken first things first, asking, “What is it that customers expect of us?” The answer was clear enough: they want flights where they want to go, when they want to go there, arriving safely, with their luggage, at competitive prices. Then they asked themselves, “Why are we unable to do this?”
An examination of the culture clearly showed why. Continental was a company with a severe identity crisis and misplaced priorities, a confederation of people brow-beaten by flavor-of-the-month management directives, and whose only loyalty was to self-preservation. Countless daily moments of truth were met with a duty to following rules in an employee handbook instead of doing the right thing to keep customers coming back. The result was unreliable flight schedules, lost luggage, employees who ran customers off with inflexibility, and financial disaster of their own making. As Bethune put it in his book, Worst to First, “We weren’t just the worst big airline. We lapped the field…It was a crummy place to work.”
Bethune and his newly assembled team, including Larry Kellner and Jeff Smizek, set out an emergency financial action plan for survival, a marketing plan…absolute management necessities, and they acted on them, making sure that they always knew just how much life remained…just how bad it was…at all times. This kept the company alive temporarily. Then they moved on to the source of the problem.
Bethune and team focused on the culture that lay at the root of all those problems, setting out to turn Continental from a mere collection of rule-followers into a team of informed decision-makers. First, he set out to earn their trust. He tore down the barriers between management and the rest of the people. He literally opened the corporate doors and wedged them open, scheduling visits, inviting people to “drop by.” He also did things like burn the employee handbooks which had left no room for on the spot decision-making. He did crazy things like promise bonus checks for measurable results and then amazed the employees when he actually did what he promised. Within a year, an organization of over 40,000 employees had made their own revolution and had seen a response from the marketplace…the return of passengers to Continental, and the return of profitability.
Come with me back to my 2004 flight on that gleaming white 767 on its way to Honolulu. I spent much of that flight back in the galley with the crew, having stirred up a session, listening to them rave on what they loved about Continental, why they loved Gordon Bethune, and how they were doing all they could to keep him from retiring. I was witnessing something special with those people, something of which many organizations only dream. It’s called Passion.
I had to face the brutal facts and accept that the flight attendant wasn’t bringing me Cokes…without my asking…because of my rugged good looks. She was fired up. She brought me everything she could think of because she loved Continental Airlines, loved Gordon because of it, and loved talking about it. I was witnessing Bethune’s leadership in action. It’s not that he would have wanted her to keep me from running out of Coke. No, she and the other crew members directly attributed Continental’s culture to its leader, and were excited to talk about it. His leadership was made manifest through her attitude. Her behavior was a vivid image of her team’s legacy. Of an organization of 40,000, that one flight attendant was Continental Airlines, a good-will ambassador for her team…made manifest through her leadership. She was proud. They were proud. It was clearly evident to me how such a dramatic turn-around could happen for Continental Airlines. I think Gordon had earned her trust. He had earned their trust.
Of course, I was struck by their use of the word “love” when talking about their CEO. But then, I had also heard it many times from combat veterans when speaking about their own leaders and, of course, about each other. But I wondered what Bethune had really done to deserve such endearment from his employees. What traits had he exhibited? Wasn’t it they, the employees, who made the difference every day, and who made Continental what it was? Of course it was. But, unlike so many, he was the the one who fought for their ability to do so. He had demonstrated the trust in them to do so. He had shown, not just management smarts, but actual leadership.
Effective combat leaders tell us that their job is, first and foremost, to earn the trust and confidence of their troops and subordinates. Read Bethune’s book and he’ll tell you all about the steps he took to earn the trust of 40,000 employees, and how he challenged them to the take the company from worst to first. The fact is this: Continental Airlines provided predictability to customers because its employees were now prepared to deal effectively with unpredictability and chaos everyday, as each unique situation required.
The battle for Reliability was won by two Continental team members, twenty-thousand times over. But along with the passion that I witnessed in that flight crew, I was also witnessing something else: fear. They were afraid of losing what they had, and that was a culture provided and nurtured by a leader who gave them vision and purpose. They had seen the other side. They recognized that, as powerful as their culture was, it was equally fragile and vulnerable to sabotage by different leadership…by someone who didn’t “get it.” And the world is overflowing with those people.
Gordon Bethune and team had built a company of trusted, empowered decision-makers and given them a clear mission. He had built a culture of Leadership and Teamwork through leading by example, exhibiting integrity, trust, and courage. Such things are contagious and they directly impact the bottom line. Skill is nothing without Will. Duty will never hold a candle to Devotion.
In business, our agility and our observed behavior become our identity in the marketplace, or within our own organization.
At first glance, this story is about the leadership of a CEO. But if you look closely, this story is about the leadership of CEOs and flight attendants…people on the front lines…together, because of a nurtured culture of leadership and teamwork. Bethune knew they had to focus on the “who” and the “why,” and that it was not enough to rely only on the “what, when and where.” Thankfully, for us fliers, he recognized that neither position authority, nor systems of control could replace human will and dedication.
This is the role of leadership: to get the team battle-ready, and do whatever it takes to keep it that way.
Bethune did retire at the end of 2004, and the position was taken by Larry Kellner. Kellner had a different personality than Bethune. But he carried on the work that he and Bethune had done, and preserved the culture of Continental. In fact, with this in mind, he had decided against merging. Satisfied that Continental was flying straight and true, Kellner chose to move on at the end of 2009, leaving his post to Jeff Smizek, also part of that inner team that had driven the revolution. External threats made it necessary for Smizek to be decisive and move ahead with this merger with United, now underway. Smizek is to be CEO, so that is a good thing.
Fast forward to March 2010 and a small-team expedition to the Pacific. Again, we had flown to LA on a different airline, using miles. Each flight was hours late, and the mood in the air was consistently tense. Finally, we reached Continental and a very real sense of relief. Throughout our flight we were fed exceptionally well, treated like friends, and things just ran smoothly. I’ll never forget that morning return to LAX, when we had to leave Continental and move to that other airline (it was not United, thankfully) to check in. The glass door slid open and we were greeted to the early morning sound of a shouting Drill Sergeant barking orders, and lines of waiting passengers in a near state of panic, looking at each other, shaking their heads in disbelief. As for us, we looked at each other and chuckled. Wow, did we miss Continental.
It is only conjecture on my part, but I can imagine some real concern inside the Continental team. I have had excellent international experience with United. But listen, when you have built something this rare and this valuable, you had better recognize all forms of potential threat to it…which any merger certainly is. And remember, this is not a discussion of business models. This is a discussion of teams…teams which develop and execute business models. And the biggest threat of all to a team’s culture is a merger…enter people in authority positions who “don’t get it.”
I’m betting the team is on guard. I know we loyal passengers are. But the fight is on. And boy, do I hope they can keep the plane “center-ball.”
1) Bethune, Gordon, Worst to First: Behind the Scenes of Continental’s Remarkable Comeback 1998, John Wiley and Sons, Inc., New York
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