AMERICA AT WORK

AMERICA AT WORK

M A N AG EM E N T A D V I C E F R OM T H E C E O WH O S A V ED
C O N TI N EN T A L A I R L I N ES
FREE ENTERPRISE STAFF | MARCH 10, 2015

Gordon Bethune is a character. Hes also one of the most accomplished American business leaders of the past
few decades.
Now retired, Bethune is credited with resurrecting Continental Airlines, the flagging carrier he
led from 1994 to 2004 that has since been acquired by United Airlines. Perennially ranked last
among major airlines in customer satisfaction, Continental was losing hundreds of millions of
dollars each year and fighting insolvency. Bethune, who was promoted from COO to CEO less
than a year after he joined the company, successfully transformed the beleaguered airline into a
profitable and respected industry leader.
What did he learn during his decade-long tenure at Continental? We recently had the good
fortune to interview Bethune, who talked about his background and the lessons in leadership and
management he learned during his time at the airline. Here are seven of those key takeaways, in
Bethunes own words.
1. Treating your customers and employees well is the right thing to doand its good for
the bottom line.
I arrived in February of 1994, and Continental was consistently dead last in customer
satisfaction metrics. And then, we consistently ranked first. To this day, we have a record for JD
Power Awards. We were on Fortune Magazine my last six years for the 100 Best Places to Work
in America. We were the most admired airline in the world, according to Fortune. Those are
kinds of things that are long-built records. But I didnt do it. The team did it.
How did we do it? We became Americas most on-time airline. How did we do that? We focused
on that every day, and the record still stands. So, it can be done from a dispirited last place. We
lost something like $600 million in 1994. In 1995, we made $225 millionwith the same people
and the same airplanes. So, it wasnt anything wrong with the employees. It was the
managementand it always is.
2. Dont forget where you came from.
I used to be an airplane mechanicthats how I started off. And do you know how much faster
I could fix an airplane when I wanted to fix it versus when I didnt want to fix it? Thats where
the money is. They dont teach that at Harvard Business School. But they do teach it when
youre growing up. These are basic things, but I think too many companies forget it.
3. Make a real effort to get to know your employees.
I communicated a lot during my time at Continental. I did a voicemail that was 3-5 minutes that
basically told everybody what was going on, and what they could expect. The twist was that you
could voicemail me back through the phone service, and they could tell me what was on their
minds. In any case, it was a secure, frequent, respectful voicemail to employees.
You ever watch a football team when they have a huddle before a play? Its not just the big shots
in the huddle. Its the team. Everybodys got to know what were doing. That kind of respect for
your employeesthey notice that.
4. You cant outsource employee relations. Its up to the CEO to create a team
atmosphere.
Your employees and their attitudes are the differentiating competitive edge you have, and I
think we utilized that extensively while I was at Continental. You have to gain and earn the trust
of your employees. But not only that, you have to make them feel rewarded in order to get your
product at a level that it can beat the competition. Everybodys looking for better fuel burn and
all these accounting tricks you can do, and all the cost savings you can do. But having employees
that want to do a good job is invaluable.

WE LOST SOMETHING LIKE $600 MILLION IN 1994. IN 1995, WE MADE $225

MILLIONWITH THE SAME PEOPLE AND THE SAME AIRPLANES. SO, IT WASNT
ANYTHING WRONG WITH THE EMPLOYEES. IT WAS THE MANAGEMENTAND IT
ALWAYS IS.

When I was at Continental, I would always go to the airport an hour-and-a-half before my flight,
and I would visit Continental employees in the crew room or break room or baggage room. Its
the same as going to somebodys office and thanking them for doing a great job. CEOs dont
normally do that. They try to delegate that to their HR departments, but you cant. If you want to
be the leader, then you have to appreciate and respect your employees. One way to show them
that is to get off your ass, go to their officewhich might be a cockpitand say hello and thank
you.
5. If you ask your employees to make sacrifices, then you should make them, too.
One thing I did that differentiated me was during the holidays. In particular, Thanksgiving and
Christmas were tremendously high-stress days because, of course, everyone wants to be with
their families and its a maximum travel time in America. I would go out to the airport and work
on those daysI would load bags, do work behind the counter, greet customers. Id make an
effort to tell them when I was out there that I appreciated them working on Thanksgiving, and
that I appreciated their work in general.
WE TRAIL BLAZED THE INTERNATIONAL NON-SMOKING FLIGHTS BY LISTENING
TO OUR CUSTOMERS AND LISTENING TO OUR OWN EMPLOYEES. WE MADE A LOT
OF MONEY BECAUSE OF IT, TOO.

You cant imagine how much goodwill that you earn when your team knows that youre willing
to give up your holiday because youre asking them to give up theirs. You become a
true member of the team then. Youre not the manager. Its a team. The quarterback doesnt
necessarily enjoy any more prestige than the right tackle, and if you go to the Super Bowl then
everybody gets a ring. Thats just the way it works. You can write notes all you want, but its
better to get off your ass and get out there.
6. Listen to your customers, even if your competitors arent.
In 1994, the United States had already passed a law that you couldnt smoke on domestic
flights. But we flew in Central and South America and Europe, and those were smoking flights
since international flights were exempt. I would have customers complain about smoking and, of
course, if you were a working flight attendant, and you worked the back of the plane, it was a
different atmosphereit was cloudy, grey, and smoke-filled. I was on a flight down to Costa
Rica, and I walked back there, and I said, We are going to stop this. We had the senior VP of
international sales writhing on the ground in my office because they were all convinced that we
were going to lose our business.
THE BEST WAY TO DIFFERENTIATE YOUR PRODUCT IS TO BE CONSISTENTLY
RELIABLE AND DEPENDABLE.

And, you know what? We picked up more business doing that than anything we did. We had so
many people ditch Alitalia or Air France to fly on us because we were non-smoking. And while
it angered some customers, we got more customers because of the rule. We trail blazed the
international non-smoking flights by listening to our customers and listening to our own
employees. We made a lot of money because of it, too.
7. Consumers want one thingand its not what you think it is.
All good airlines are always looking for a way to differentiate their product. But the best way to
differentiate your product is to be consistently reliable and dependable. I think people value that
the most. Theyll say, Screw the movie, but dont lose my bag! Ive seen airlines debate crazy
things, like whether the flight attendants should wear Kate Spade handbags or another brand.
And I said, Who gives a shit? Why dont you give them their bags? Thats what they want!