From Worst to First by Gordon Bethune, with Scott Huler

This article was inspired by Scott Huler's From Worst to First . If you enjoy this article then consider purchasing or borrowing the book.


How Continental Airlines Revived Itself

“We sent word into the field that henceforth we wanted our employees to use their judgment, not follow some rigid manual. When faced with an atypical situation, employees were instructed to do what was right for the customer and right for the company.”

Out of the US’s 10 largest airlines, Continental was in the worst shape going into 1994. Within 10 years, it had seen 10 leaders and filed bankruptcy twice. Employees were underpaid and the number of customer complaints was three times higher than the industry’s average. In February 1994, Gordon Bethune took over Continental Airlines as president and chief operating officer, with a plan in mind. By November 1995, Continental’s stocks had risen, it was making a profit, and Gordon Bethune was appointed CEO of the company.

Opening the executive suite up to employees, one of Bethune’s first steps was to eliminate the “us-versus-them” philosophy, which had developed under previous leadership. Creating a four-part “Go Forward” proposal, the new CEO convinced the board of directors that one person at the top needed to spearhead change within the company. The four aspects of the company he addressed are as follows:

  1. “Fly to Win” – Bethune understood that a new marketing approach was essential. Cutting unprofitable routes and renewing positive interactions with travel agents, Continental stopped wasting time and energy on pointless activities.
  2. “Fund the Future” – A good financial plan was the key to changing the airline. Bethune renovated the financial system, so that he could track the company’s gains and losses on a daily basis. He improved the airline’s pricing structure and took the necessary steps to avert bankruptcy.
  3. “Make Reliability a Reality” – Using Department of Transportation on-time percentages, Bethune determined the reliability of Continental’s service. He found employees and systems which would improve the airline’s service.
  4. “Working Together” – Bethune’s reward-based program encouraged individuals and departments to end conflicts. Better treatment for customers was especially important.

Before he could expect employees’ trust and cooperation, Gordon Bethune needed to demonstrate that he was different from the last nine managers. He instituted open houses for workers and casual Fridays to eliminate the manager/employee barrier. Meeting in the parking lot with staff, Bethune burned the company’s old employee manuals. Rather than relying on strict rules, the new CEO wanted employees to make their best judgments in difficult situations, for the company and the customers benefit.

A universal paint job was decided on, demonstrating the Continental was a serious airline. Bethune brought together the company’s employees like never before. He established transparency, garnering the trust of his staff. Continental’s managers shared the four-part plan with workers, giving the company a shared vision. Most importantly, Bethune decided the he would guide workers but not control them. He gave them room to make their own decisions.

Gordon Bethune’s leadership changed Continental from a lackluster airline into a great one, since this CEO realized that giving employees and customers what they want can help a company succeed.

QR Code
QR Code how_continental_airlines_revived_itself (generated for current page)