July 21, 2020

Total Performance Leadership Blog Post #25: Stakeholder Engagement-How Gordon Bethune led Continental Airlines our of Crisis

By Rob Andrews

We deliver a leadership communications workshop developed over eighteen years, by my late best friend and business partner, Bob Knowlton, who died of pancreatic cancer on October 20, 2009. What we now call TPL Leadership Dynamics was his life’s work and his pride and joy. The workshop, which we’ve continued to enhance over the last eleven years, delivers the most powerful leadership communications methodology I have ever seen. Bob’s premise in developing this methodology was that effective leadership, which drives positive change and creates breakthroughs, is not about personal presence, degrees, or position title. Effective leadership is critical from the board room to the shop floor and is about connecting with your constituents so they feel you know where you’re going, you believe what you’re saying and there is something in it for them.

The first thing we do when we begin a workshop is to show a twelve-minute video of Gordon Bethune addressing the employees of Continental Airlines shortly after the company released its fiscal 1994 financials. From a production-quality standpoint, this was one of the worst videos of all time. The lighting was poor, there was a cheap piece of art hanging on the wall, Gordon’s address was unrehearsed and a bit awkward, he cussed a few times and fidgeted all the way through it. The production itself was poor but the result was exceptional.

Gordon joined a severely troubled Continental Airlines as COO in 1994 and was promoted to CEO in 1995. When Gordon took the reins, Continental was dead last in every category and had filed for bankruptcy protection in 1983 and again in 1990. The company carried a huge debt load, the fleet was a jumbled mess of junk, workforce, and labor union relations were hostile and they were months away from yet another bankruptcy. The leadership was not unified, there was no strategy, no measurement systems, no clarity, and no stakeholder engagement. Under Bethune, that was to change, change for the better, and change quickly.

In very short order, Continental went from last in every measurable performance category to winning more J.D. Power & Associates awards for customer satisfaction than any other airline in the world. Business Week magazine named Bethune one of the top 25 Global Leaders in 1996 and 1997. Continental’s stock price rose from $2 to over $50 per share between 1996 and 2004. Fortune named Continental among America’s Best Companies to Work for six consecutive years. In Gordon’s last year before retiring, Fortune ranked Continental #1 Most Admired Global Airline, a title it earned again in 2005, 2006, 2007, and 2008.

As you watch the video, you will see that Gordon communicated with his stakeholders in such a way that they absolutely knew where he was going. When stakeholders in an organization don’t know where their leaders are taking them, they tend to play it safe, do the bare minimum and protect their turf. Engaged stakeholders get out of the stands and into the game.

Stakeholders under Bethune quickly became convinced that he believed what he was saying. Companies in which managers pretend to lead, employees pretend to enroll. Stakeholders know and have always known, whether the leader really believes what he or she is saying.

Gordon connected with his stakeholders and their needs and interests. A leader speaks not to an audience, but to groups of constituents, each with their own specific needs and interests. Stakeholders can tell whether the leader really understands and connects with their world. If he or she doesn’t, it’s unlikely they will put their hearts and minds into the game.

Our research and methodology suggest there are eight essential elements of an effective leadership message and Gordon nails every one of them.

Background Connection: Your first task is to make the shift from “you and me” to “we.” Gordon used “we” repeatedly and made it clear he felt a shared connection with his stakeholders. He admitted mistakes, took responsibility, and demonstrated empathy. He spoke of things “you and I need to do” and about what “we’re going to do together.”

Vision: What is the future state? People want to know you have a vision and what it is. What might it look like next year? In five years? How do we want the world to see us? How do we want to feel about the work we do? Gordon spoke of a new vision, as a well-run airline, a customer service leader, and a place people would be proud to work.

Strategy: What will it take to get there? Stakeholders care less about the details of a plan and more about the existence of a plan, and that it is already underway. Gordon described their strategic failures and laid out his four cornerstones to profitability, including fly to win, reducing the size of the fleet, and improving operating performance.

Implications: What does this mean for us? Stakeholders want to understand the impact on them. Where there is a vacuum, employees will fill it by making up their own stories. Gordon spoke candidly of vendors and employees who would not be paid, and other temporary pain points, as necessary, until they could return to profitability.

Urgency: Why the rush? Stakeholders will cling to a flawed, broken system rather than venturing into the unknown. Change requires a credible call for urgency. The airline had a dismal history, yet Gordon implored his employees to quickly improve rankings and laid out the corresponding rewards for better on-time flight performance.

Rewards: What will make this all worthwhile? Will the rewards be shared among those who expended the effort? Leaders need to acknowledge individual and group contributions and design reward systems in which everyone wins. Bethune laid out a plan by which all stakeholders would be made whole once profitability was restored.

Hardball Issues: What issues or concerns stand in our way? Stakeholder groups are different, but each is listening for evidence that you understand the challenges at hand: past failures, inadequate resources, or external circumstances. Gordon acknowledges past failures and asks his stakeholders to unite with him in a new vision.

I hope this information has been helpful and look forward to answering your individual questions around how your organization can leverage this powerful methodology.

Warmest Regards,