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The Continental Turnaround: Part 3

An ex-Continental Beechcraft 1900 (Photo: Ian McMurtry)

The next and final part of the Continental turnaround features employee empowerment and the power of momentum. These are the last two aspects of the turnaround and right there up in importance with listening to the customer.

Let the Inmates Run the Asylum

This is something that often goes unnoticed or executives are scared to let happen. Employee empowerment is important and employees should be able to do the right thing by the customer without having to jump through hoops. Having fun doesn’t mean productivity drops but instead means that employees are engaged and their opinions are respected.

Continental hadn’t done a good job of that. The previous management was tight-lipped and frequently kept employees in the dark when it came to company news. It got to the point where many employees were ashamed to work for Continental.

Gordon and Greg decided that a healthy culture is simply just several things working together; honesty, trust, dignity, and respect. If they all remain in play a business can flourish.

This was pretty hard to do at Continental, employees were on edge and suspicious. They had been lied to and seen friends get fired. Many feared they were next.

So the new plan went as follows: get out there and talk to everyone. Tell everybody everything.

Next up was to empower employees. Continental had built a culture where if any employee had done something that was a benefit for the customer but was considered “unacceptable” a rule was quickly created documenting proper action. It ended up being a giant book of rules that hardly anyone knew, in fear of getting in trouble and having a new rule written employees would err on the side of caution and just not help customers as much as they should have.

This led Greg and Gordon to burn the book in a barrel in front of a bunch of employees as a symbolic gesture. Their message was that Continental was their company to make great, go do it now.

Then to make employees feel truly appreciated and working towards the same goal employee compensation was further aligned to company goals. Just as with the on-time bonus mentioned earlier, profit-sharing became the focus. The better the company did the more money employees would get.

So now employees were empowered to do a good job and had the right incentives. Next came the communication with employees. Bulletin boards were put up across the system containing everything an employee would want to know about the company. Then a hotline was created for employees to offer their suggestions to the company with a guarantee that someone would get back to them within 48 hours.

Now obviously every suggestion wouldn’t get implemented but every one was taken seriously and a lot of great ideas came from that system. For example, tagging bags of the best customers as priority and putting them first on the baggage belt came from a group of baggage handlers. This system is now in place at airlines across the world.

Deliver Bad News Well

Communication however also at times involves bad news and handling bad news with dignity and respect can go a long way.

Greg and Gordon had made a business decision to shut down Continental operations in Greensboro, N.C. Generally, the senior manager would dump the news on the local airport manager’s lap and then go hide. Instead Greg decided to go personally to Greensboro and deliver the news and deal with the punches directly.

The pilots in Greensboro while understanding of the closure did not believe that the compensation package was fair. Greg didn’t budge because he honestly did believe it was a very generous and fair plan. Later in the day he met with the rest of the employees and laid out his relocation and closing plans and employees generally expressed appreciation that he had come to personally deliver the news.

However, the pilots soon came in and began a protest accusing management of incompetence and more. Surprisingly, the other employees stood up to defend Greg and told the pilots that they should feel lucky Continental finally had a senior management team that treated them with enough respect to deliver bad news and a good relocation package in person.

The key here was to keep communication flowing in both directions through the good and the bad.

All of these things discussed in this article and in the previous articles together gave the company momentum to really turn things around. This momentum helped a lot and there was a great team working very hard but a lot of it also came down to luck. A few things happened to go right in the correct order and all the hard work all the employees were putting in finally took off. As soon as they got off the ground they kept going.

Hemal Gosai


  • Hemal Gosai

    Hemal took his first flight at four years old and has been an avgeek since then. When he isn't working as an analyst he's frequently found outside watching planes fly overhead or flying in them. His favorite plane is the 747-8i which Lufthansa thankfully flies to EWR allowing for some great spotting. He firmly believes that the best way to fly between JFK and BOS is via DFW and is always willing to go for that extra elite qualifying mile.

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