Gordon Bethune, CEO at Continental from 1994 - 2004, was able to transform continental from an industry to joke to one of the top airliners in the United States. He managed the change that he knew had to take place. He did this thoughtfully and with purpose. The way that he achieved the successful transformation is why we study this case.
He lived the change efforts that J.P. Kotter describes in his article, "Leading Change: Why Transformation Efforts Fail." I could take a walk through Kotter's eight steps for successful transformation that Kotter has provided for us, pointing out how Bethune had accomplished each step from motivation through to institutionalization, but I want to talk instead about the essence of Bethune's success.
Bethune was successful because a) he knew his industry, b) he had a successful strategy that he was able to communicate and c) he was able to get the most out of his employees. These ideas have been covered to some degree throughout the course and cases studied, but a few things in particular stand out as new lessons that I can take from this case and as lessons that have been so often repeated that I am sure to never forget them. I will start with the latter.
Since day one of this class it has been made very clear that in order to get the most out of employees leaders must treat them as adults. Adults need to be trusted, they need to be given autonomy over their decisions, and they need to be treated with dignity and respect. Bethune trusted his employees and he let them know this by getting rid of security cameras. Bethune gave his employees autonomy and he symbolically burned the old order of management in the parking lot. Bethune gave his employees information when they deserved it, even when that meant they were being let go. Time and time again in this class there is a truth coming through - employees must be treated as adults.
We haven't talked quite as much in this class about strategy. That is a topic that is most likely more industry, or situationally specific. We are talking about managing people here, not about managing business plans. However, it is clear from Bethune's case at continental that his strategy was one of the primary reasons that he was successful. His employees knew this as well. He was able to communicate the needs to be maintaining fewer aircraft. He was able to help his employees focus on customer satisfaction, and he gave the employees the tools to communicate the needs of the customers.
Bethune also knew his industry. Gates is another perfect example of why having a leader that is an expert in the field as the leader can be the best way to ensure a sustainable competitive advantage. Skilling helps prove this argument because he entered an industry that he really did not know very much about. Yes, Skilling took Enron in another direction, but he did not really understand or respect their core competencies. Not every business or organization needs an expert in the field at the helm, but Bethune and others show that it certainly helps.
There are two other big ideas that fit together nicely, but not into the scope of what I mention above.
Much of this course unexpectedly took meaningful forays into the field of psychology. This makes sense to me now that I am at the end of the course because if we are discussing motivation, retention and maximum productivity of human beings, then of course you have to understand the human mind. Bethune and contintental reinforce the idea from class about the importance of an employees psychological ownership in an organization. Providing employees voice can be the most powerful method of getting important on the ground information from employees. Another interesting psychological take away from this case (sorry this paragraph stinks) is the importance of symbolic gestures. Burning books, unplugging cameras and hosting a house party are small investments of capital and energy, but they yield enourmous payoffs in the minds of employees.
Symbolic gestures and psycholigcal ownesrhip. Using these two forces and all of his other strengths it is no wonder that Bethune was able to motivate his employees, create and communicate vision, empower his employees, create short term psychologcal wins, consolidate his changes and institutionalize his new approach.
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