Bethune is best know for his days as chairman and CEO of Continental Airlines, where he orchestrated what is easily the greatest corporate turnaround of the 1990s. When Bethune left Boeing to become president of Continental in 1994, the carrier was at rock bottom - despised by travelers, shareholders and even its own employees. But since the company instituted Bethune's four-point, common sense business plan, "Go Forward," shortly after his arrival, its stock has risen 1,700% and the carrier is now consistently rated highest in J.D. Power & Associates quality rankings.
A big reason for that meteoric rise, Bethune told attendees of the annual Investment Company Institute Conference held here through tomorrow, was the buy-in he got from employees. Bethune asked the crowd of 1,200 fund industry executives if they knew of a single successful business whose employees dreaded going to work in the morning. There aren't any, he said flatly, adding that Continental was the poster child for dysfunction until he implemented a culture where everyone, from executives to baggage handlers, treated each other with dignity and respect.
From there, Bethune, whose colorful remarks provided levity to an otherwise business-as-usual industry conference, offered a cash incentive. Every month that Continental finished No.1 in monthly airline performance ratings, employees received a "thank-you" check for $65. As evidence of the incentive's success, he recalled the 2002 blackout, when carriers like United Airlines and Delta Airlines cancelled nearly 30 flights each out of
"That's because our employees wanted to fly," said Bethune, who is both a
Bethune also recalled the flight attendant who refused to wait for the 15 meals one of Continental's caterers forgot to deliver. To retrieve the meals, it would mean the plane would be 20 minutes late to its destination and its ranking, along with her incentive check, would be jeopardized.
"So she shut the cabin door on the caterer and ended up trading the meals of 15 institutional investors for booze," he said, drawing raucous applause. "She got what she wanted and the institutional investors got what they wanted!"
But, Bethune warned an industry whose noble reputation was recently sullied by the selfish ambitions of a few individuals, don't let incentives compromise a company's goals. Bethune conveyed a popular airline industry anecdote where a pilot told the co-pilot to plot a course that would put them in
"So don't put too much pressure on your employees to make it all costs or they'll adjust the fuel gauge," he said.