Was Gordon Bethune really that good?
 

I hear time and time again about how great Gordon Bethune is, how he would be able to turn UAL around and how great of a leader he is. Was he really though? This is the same man who arrogantly said United would never come out of bankruptcy, called them "HIV Positive", and fought hard to have them denied a loan from the government post 9/11 and also fought the UA/US merger in 2000. This guy has had it out for United for I don't know how long.

Most of us don't like The Jeff Smisek Show, brought to you by United Airlines before each of our flights on the IFE system. That practice started under Bethune. It was Bethune that hired Jeff and "trained" him. The two are still friends and Gordon flat out said that if anybody can merge the companies, it's Jeff.

I also believe he had an unfair advantage of turning CO around. CO had already been through two bankruptcies, was about to file for a third, and had its costs and unions pretty much slashed to the bone. He could do the tiniest of improvements and it would be a huge 180 from the crap it was before. Even then, CO was highly leveraged - almost all of their assest were encumbered. He rallied his employee base to do better, and they improved, but then much of the holier than thou attitude we see today from them stems from Gordon.

Jeff may be in the driver's seat, but it was Gordon who gave him his driver's training. I do not think the man deserves near the credit he gets, and I certainly do not believe he would be a good leader for United. And if I were a PMUA employ...."co-worker", I would revolt if he came near my airline after all of his public comments and blatant attempts to put them out of a job.

Yes he was. His biggest strengths were recognizing those in others. He was a great manager of people.

Yes he was.

News flash..people work directly with CEOs don't post on Internet forums. Everyone else including me has no clue "how good a leader" they were/are.

That seems rather shortsighted, no? Many of the posters here had extensive experience (myself included) with the front-line employees at CO, chatting with them, in some cases even becoming friends with them. They would have a reasonably informed view of his leadership. In the larger picture, anyone can examine how well CO did compared to its peers, and the answer is striking there. From my experience, there was a world of difference between CO under Gordon and CO under Jeff, forget UA under Jeff. And yes, Gordon was a leader that everyone respected, from employees to customers.

Here's the thing: a leader should make bold moves that are inspired and inspirational, meaning they are reflective of a forward-looking vision and that employees share in that vision. Such leadership means taking steps that are somewhat removed from reality as they implement a better future. To be maximially critical, both good and bad leaders take steps that can be considered delusional -- reflective of an imagined reality, rather than the current one -- the difference being that a good leader brings the entire company to a bright future, and a bad leader appears to do it only for some small subset of membership, if at all.

I'm sure Jeff is maximizing some return, perhaps even just his own, but certainly not that of the company as a whole. There's no disputing the results of Gordon's efforts.

Do not disparage Gordon Bethune, the Great Leader of the Most Wonderful Continental Airlines.

I think he understood the issues integrating UA were above his head, and his statements show he has a view labor relations issues there were uniquely deep and not repairable by him. Witness the pilot action in 1999/2000 at UA.

When he consulted for Delta investors on a merger the reco was United, though if I recall the closest thing to near-reality was Delta and Continental merging and fell apart last minute. Much closer cultures there but less network benefit.

http://dealbook.nytimes.com/2007/11/...r-with-united/

The big strategic hurdle was that 'golden share' Northwest held in CO after DOJ action in the early 2000s. It basically meant NW would find a merger partner first, as NW had veto power over any CO tie-up

http://usatoday30.usatoday.com/trave...est-pact_x.htm

CO was a decent airline to fly. Even Express wasn't that bad.

I would suggest reading his book (as well as Jeffy), there's a lot of insightful things in it, even if it is a book on management.

The thing about Gordon Bethune was that he knew the proper order of priorities, which became known unofficially as "The Bethune Doctrine". It worked beautifully for him then, and with a little tweaking it could work again, in any business not just an airline.

The priorities are as follows:

1. Happy Employees--empower and encourage employees to do whatever is necessary to make sure things operate smoothly and that customers are happy. Difficult but not impossible even in today's market. Enable, don't restrict. Happy Employees by default yield....

2. Happy Customers--retaining your existing customers costs about 10% as much as gaining new ones. Loyal customers mean they fly more often, will choose your airline more often even if you're priced a little higher, and they recommend the airline to their colleagues and friends. Happy customers spend more money, and do so more often, which by default will lead to........

3. Happy Investors--the added profits and operational efficiencies gained through 1 and 2 above, combined with adde revenues will improve the bottom line, thereby making the investors happy.

The problem today with guys like Smisek and Parker is that they focus on #3, and all but disregard 1&2. It doesn't work that way. They seem to take pride in pissing off their employees, which makes them less inclined to even care about a customer's issues. IMHO, United can LEAST afford this right now, when they are so far into the red.

Gordon had it right. Apparently only Richard Anderson is listening of the 3 remaining legacy CEO's....

To the OP, I suggest you try reading Gordon's book, "From Worst to First".....it explains a lot, in detail. Although the issues in the early '90s were different than they are today, the basic principles still apply.

http://www.nytimes.com/1992/11/10/bu...ankruptcy.html Gordon Bethune took over from a great man named hollis harris. harris left continental and became head guy at air Canada. while at air Canada, he worked with david bonderman to provide cash to continental. this gave Gordon the oxygen to succeed. also, while at air Canada, hollis harris signed an agreement with united that later became star alliance. hollis harris was a man of vision and a savior for continental. Gordon Bethune was just in a position to take advantage of it.

I started flying CO in 95 which I think is right around when he took over. Everyone said I was crazy to fly CO but I had just moved to Houston from London, UK and didn't know any better. I witnessed his touch on the airline and things got better every month, employee moral clearly increased and the fleet was refreshed. I seem to remember he brought F back to the fleet. He rocked it as far as I am concerned.

It doesn't matter if he was in the right place at the right time, had he not made the efforts to improve things (be it the pizza analogy, or the on time bonus) it wouldn't have mattered. He would have easily squandered his ability to make it right... kinda like Jeff has.

Yes, there is a need to save money, but don't do it where it will face the customer. Outsourcing front line associates won't provide the same experience as someone who's actions can directly affect them. Cut back on office supplies, find a different vendor for napkins, but don't cut quality as a change. That is unfortunately what has been happening, and we've all noticed it.

I had persistent excellent (and noticeably better than other airlines) experience on CO back in the day. His co-workers were consistently positive and helpful, except for Newark. No CEO can fix NY/NJ behaviour ;)

A Couple of Thoughts About Bethune...
 

I think there is little question that Gordon Bethune was a terrific manager, of the kind that comes around at most once per generation in the airline business.

That being said, much of the Bethune legacy has to be put in a wider context:

1. As alluded to above, Bethune inherited a carrier stripped to the bone by Frank Lorenzo. Although this is usually meant to show that morale had been decimated (which it had been), Lorenzo also left Bethune with one of the lowest cost structures in the business, especially for a legacy carrier. Although, the truth was that CO, post-Lorenzo, was no longer truly a legacy carrier, but instead Texas International Airlines dba CO

2. Bethune did improve morale, and part of it was undoubtedly his terrific management skills. But the other part was that he promised the unions they would be taken care of. There is nothing wrong with that, of course, but in the end CAL's cost of labor did creep up substantially, and a number of very rigid work rules were instituted, including the most stringent scope clause, which left CO as one of the few carriers flying nothing bigger than 50-seater RJ's.

3. While much is made of Bethune's emphasis on respect and customer service (accurately, in my mind), the mythologization of Bethune tends to omit that he also knew how to wield the "stick" very effectively. Under Bethune, CO was the pioneer in instituting 31" seat pitch and of steadfastly refusing to consider an Economy Plus-style section. Bethune was famous for quotes such as "that's what First Class is for" and "we only make money on the last two seats sold on each plane."

4. Yes, they kept catering longer than the competition, but this was attrbutable at least in large part to the fact that they owned the catering company that was running out of business opportunities.

5. Under Bethune, many of the practices that we see today in the combined UA were institutionalized as part of the CO approach, including very tough (some might call them customer unfriendly) IrrOps policies. The customer service line (1-800-WE-CARE) was infamous for its virtually comically hostile and customer unfriendly attitude. which squared perfectly with Bethune's notion that once the company had the customer's money it was keeping it no matter what.

6. Upgrades were much looser under Bethune, but you have to remember that this was a policy essentially borne out of desperation as no HVF (in those day they were still known as "business flyers") would fly CO.

7. Much was made during the Bethune tenure of CO's newest jet fleet, but this had as much to do with Boeing's bailout of CO as the fact that CO really needed so many new planes. Don't get me wrong, there is nothing wrong with new planes, but the inventory of new planes represented a significant drag on the bottom line of CO.

8. Most significantly, whatever Bethune did didn't stop him from getting the axe from the CAL BoD. His successors, Kellner and now Smisek, got the message and since the departure of Bethune the approach as CAL has basically been to maximize short-term revenue gain through cost controls.

I had good experiences flying CO as a NW elite except when I was forced to go through EWR. I liked their operation at IAH, although I had to remember to be careful about metal and codeshares so that I could get lounge access using an AmEx Plat card.