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From Worst to First

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From Worst to First

Behind the Scenes of Continental's Remarkable Comeback

Wiley,

15 min read
10 take-aways
Audio & text

What's inside?

Gordon Bethune turned Continental Airlines around, thus creating a profitable business and a pretty good case study in transformational management.

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Editorial Rating

9

Qualities

  • Innovative
  • Applicable

Recommendation

With literary assistance from journalist Scott Huler, Continental Airlines CEO Gordon Bethune describes how he transformed the near-bankrupt airline into one of the best companies in the industry. He describes the massive changes he made to improve the product, changing a low-cost, unreliable airline to a top competitor that emphasizes customer service. The transformations he brought about by exerting strong leadership reshaped financial controls and employee-supplier-creditor relationships. The book is a fascinating read, written in a straightforward, this-is-how-it-was style, typified by Bethune’s characterization of the company he took over as a "crappy" or "lousy" airline with terrible service. Sometimes he gets a little repetitious in summarizing the action at each new step in the transformation, but that’s just a minor complaint about an otherwise excellent book. The next time you are booked on a long flight, getabstract suggests a little related reading material: Bethune’s exemplary book.

Summary

Why Was Continental So Bad?

Gordon Bethune left his post as an executive in operations at Boeing in February 1994 to become the president and chief operating officer of Continental Airlines. The airline was in terrible shape, worst among the U.S.’s 10 biggest airlines as assessed by several indicators. It was last in on-time percentages, highest in reports of mishandled baggage and the leader, by three times over the industry average, in the number of complaints.

Continental had filed for bankruptcy twice in 10 years, during which time it soaked through 10 leaders. Wrapped in the tatters of a previous management strategy of union busting, employees received salaries far below the industry average. Those who remained were unhappy at work, mired in frequent infighting and surviving on the "duck" strategy: do what you can, stay low on the radar and "cover your ass."

Bethune turned the airline around. He took deliberate steps to improve performance, create incentive pay, control costs and build earnings. Customers, particularly higher-fare business passengers, began coming back. The company began to make a profit in 1995 and its stock rose.

In November...

About the Authors

Gordon Bethune  is chairman and CEO of Continental Airlines. Prior to joining Continental, he was vice president and general manager of customer service at Boeing. Scott Huler  is a journalist who writes for The New York Times, The Washington Post and The Los Angeles Times.

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