The Case of the Team-Spirit Tailspin

Century Airlines had made it—so far. In the decade following airline deregulation, every month seemed to usher in a new crisis—whether over the availability of landing slots and gates or over the cost of equipment leases and fuel. But under the skillful leadership of its long-time president and CEO, the $ 300 million regional carrier struggled through. In 1989, Century’s battle-weary leader retired and handed the reins to his protégé, Richard Johnson. Johnson’s appointment was no surprise within the company, nor was it a disappointment. Johnson knew the airline industry inside and out. He had helped negotiate a partnership to feed the hub of a large domestic carrier, and he had been instrumental in winning the cooperation of Century’s unions. Johnson knew that Century’s continued survival depended on consistently high levels of customer service and that service excellence in turn required the commitment of the work force. He also knew that employees had made many sacrifices—wages and hiring had been frozen for two years—and that morale had suffered as workers complained of being asked to do more work for less pay. To build commitment and boost morale, he enlisted the help of the unions, middle management, and the human resources department to develop what he called the Century Spirit program. Johnson announced the Spirit program in a letter to employees. The letter described his goal of creating a positive work environment in which teamwork, creativity, and change could flourish. The program consisted of four mechanisms: cross-functional task forces, open communication, recognition committees, and individual initiative. “The effectiveness of these mechanisms and the success of the program,” he wrote, “depends on you. Your spirit and mine—a Century Spirit—will pull us through.” By December 1990, the Spirit program was well under way. Two task forces had completed their training and were about to begin their meetings; the recognition committee had given awards to all employees for achieving performance targets companywide; and the Plane Truth, a biweekly newspaper a group of flight attendants had started, was beginning its second year in print. But while the Spirit program showed signs of lifting morale, outside forces were undermining it. As fuel costs soared in the wake of Iraq’s invasion of Kuwait and passenger miles slumped in the face of a business downturn, management cut back workers’ hours and set ever-higher quality goals. Anxious to preserve their jobs, employees agreed to management’s requests, but tensions mounted. When the employee newspaper—one of the individual initiatives Johnson had explicitly encouraged—began to publish articles critical of the company, it was hard to tell whether the newspaper was venting workers’ frustration and reinforcing team spirit or was stirring up old animosities and bringing the whole company down. “And please return your seats to their upright position.” Chris Gulden hung up the microphone and strapped herself in for the landing, then turned to her coworker Bob Rodriguez, who was seated beside her. “Have you seen the latest Plane Truth?” she asked. “I read it in the lounge this morning. That Ask Myra column is pretty funny.” “Sometimes it is. That one about what people did with those little service awards—you know, those miniature silver-plated DC-9s we all got—was kind of clever. Seven percent played war games with other employees, 12 % leased it to Ridgeway Air, 42 % gave it to their kids, who lost it right away.” “That’s why I like it. It’s not afraid to be irreverent. And you have to respect management for encouraging something like this.” “But some of the articles are so critical. It makes you wonder if we’re doing anything right. That’s not what we need to hear right now—and apparently management agrees. My friend Pat works in the executive offices, and she says Johnson is pretty mad about the whole thing.” “The paper’s not that critical. It’s just meant to be funny. Why should it bother Mr. Johnson so much? He seems to have a good sense of humor.” “It’s like giving somebody’s kid a fifth of whiskey. Richard Johnson’s Spirit program is near and dear to his heart, and he thinks that it’s being corrupted.” “He should just ignore the paper. It’s not meant for management. Besides, nobody takes that stuff seriously.” “The people writing it sure do.” Richard Johnson had summoned Joan Raffin, Century’s director of human resources, to his office. Raffin knocked on Johnson’s open door and walked in. Even before she had pulled up a chair, Johnson started. “One of our board members stopped by my office this morning. He handed me a copy of the Plane Truth. Somebody left it in first class on a crowded morning flight, and he picked it up. Damn good thing he did. Have you been monitoring this? Nothing but satire and half-truths. This paper is dangerous. Can you imagine what customers would think if they got their hands on it? Our own employees complaining about slow turnarounds and lost luggage!” “I understand what you’re saying. Some of the articles touch on some sensitive issues. But the newspaper is very popular, even with the pilots and machinists. I myself wrote an article that explained our new insurance procedures, and I’ve gotten some useful feedback from the letters to the ed—” “We can’t have this,” Johnson shot back. “I don’t know who’s responsible. Frankly, I don’t care. I want this stopped. We can’t let one drop of vinegar turn the whole company sour.” “When you say stopped, do you mean you want to cancel the newspaper completely?” Raffin asked uneasily. “We should talk about that. It’s true that people are uncomfortable with the tone and don’t want to keep reading about problems. But I’ve also heard people say, ‘We never would have seen this before Richard Johnson took over.’ For some, the newspaper is symbolic. I’m worried that if we come down too hard—” “You know what I worry about? Team spirit. Fuel costs have doubled in the past six months. Passenger miles are down 10 % . We’ll have to post another loss this quarter. The only way we’ll pull through is to run more efficiently—boost our yields, cut fuel usage. Most of all, we need to make customers happy: improve our turnarounds and on-times, provide a quality experience. We need positive thinking! Don’t worry about coming down too hard. What you’re really doing is coming down on the side of team spirit. That’s what we need to make the Spirit program work.” When Raffin returned to her office, her secretary reminded her of a lunch meeting with Helen Wein, president of the United Federation of Flight Attendants (UFFA) local. Raffin dashed down to the company cafeteria, where Wein was waiting. They worked their way through the buffet line, cleared a table in the corner, and sat down to eat. Wein started. “Joan, you and I have been through a lot together, and you know I’ve always been a peaceful person. So you should be among the first to know that I’m no longer opposed to violence—as long as it’s directed at Al Jacoby in technical operations!” “I thought you and Al had a friendly antagonism.” “Most of the time he’s just having fun, but lately it hasn’t been very amusing. He’s always lording his power over somebody, especially when his cherished machinists are on the ropes. Now that their hours have been cut back like everybody else’s, some of the more vocal members have been complaining to Al since he’s the shop steward. So Al’s been looking for a scapegoat, and he thinks he’s found one in UFFA.” “What’s he blaming you for?” “He comes nosing around here saying we don’t have team spirit and accusing us of undermining Johnson’s Spirit program. That’s ludicrous. We’ve been supporting the program from the beginning. Why wouldn’t we? We helped create it.” “What triggered all this?” Raffin asked. “You want the plain truth? That damn newspaper. Everyone knows that flight attendants publish it. So Al assumes it’s some kind of official organ of UFFA. He knows better, but he plays dumb.” “So he’s mad about what’s in the newspaper?” Raffin asked. “He’s furious. He thinks UFFA is intentionally trying to weaken the machinists’ credibility by writing articles implying that the machinists are lazy and take too many breaks. He says that they’re not getting enough credit for their work, that it doesn’t show up in the turnaround figures because the fleet is so old. He’s got a point, but he should leave us out of it.” “I just talked with Al yesterday,” Raffin said. “He didn’t discuss any of that with me.” “That’s because he doesn’t want to advertise the fact that he’s struggling to keep his group together. Some of the machinists are mad about cutting their hours—especially now that no one is getting any profit sharing. As if they’re the only ones feeling overworked and underappreciated. They don’t even trust the recognition committee because they think the flight attendants and pilots get all the glory.” “Al seemed to understand the philosophy when we set those targets. Shared responsibility and shared rewards—that’s the whole point.” “Frankly, things aren’t as bad as Al thinks. You’ll always have a handful of people who complain. We have them in UFFA. The difference between Al and me is that I’m facing up to it. I’m willing to confront the complainers, while Al’s afraid of losing votes in the next election.” “What do you propose we do?” Raffin asked. “The solution is easy. Since my complainers are stirring up his complainers, we can kill two birds with one stone if we stop publishing that newspaper. Otherwise, all the talk about openness and teamwork will be a big joke.” Flight attendant Angie Palazzo waited nervously outside Joan Raffin’s office. When Raffin returned from lunch, Palazzo rose quickly to greet her. “I don’t have an appointment, but I was hoping I could talk to you.” “Of course, come in.” Raffin gestured for Palazzo to sit in one of her upholstered chairs. She closed the door and sat in the chair beside her. “You seem upset. What can I do?” “I suppose you know that I’ve done some writing for the Plane Truth.” “Actually, I didn’t know that,” Raffin responded cheerfully. Palazzo started to relax. “I’m new at it, as a lot of the contributors are. It’s probably pretty obvious.” “No. It’s been terrific to see how talented some of our flight attendants are.” Palazzo smiled, then her face grew serious. “I heard that management wants to stop the newspaper. That’s what I came here to talk to you about. Everybody used to hold it up as a model. Even Mr. Johnson. Now all of a sudden UFFA doesn’t like it, and we’re getting pressure to stop publishing it.” Raffin wasn’t prepared to make Johnson’s decision public, especially since she wasn’t sure she agreed with it. “I don’t know where you’re getting pressure from, but I can tell you that Mr. Johnson hasn’t made any decisions yet. We’re aware of some problems, but why don’t you tell me your thoughts about it.” “I think it would be a big mistake to cancel it. Maybe I’m off base, but it really bothers me,” Palazzo said. “What bothers you?” “The hypocrisy. I mean, I really believe in teamwork. Flight attendants have always had to work together. That’s how we’re trained, and that’s probably why we’re publishing the paper and not the pilots or the machinists or the baggage handlers. They can’t cooperate on anything. So here we thought we were setting an example. And we felt pretty good about that. But now everybody wants us to stop.” “Who’s everybody? Do you mean the union?” “Mostly UFFA,” Palazzo responded. “Some of the machinists are giving the flight attendants a hard time too. But this morning, everyone’s saying that management is going to tell us to stop. It’s just a matter of time until we get the memo saying forget it.” “To be honest, I’ve heard some complaints about the newspaper too,” Raffin said. “But I’d like to hear what people have said to you.” “That it’s nothing but a lot of complaining. That it goes against company goals. Everybody wants to pretend that we’re one big, happy family. But we’re not. We’ve got a lot of problems, problems we’ll never solve if we keep our heads in the sand. If people are upset about the Plane Truth, it’s because they can’t face up to what’s really going on.” “I think the fact that you name names is what a lot of people find so disconcerting,” Raffin interjected. “If it hits too close to home, maybe people ought to think about why. Maybe the machinists see a little too much truth in the reports that they take long breaks and cover for each other. That’s not a reason to cancel the paper. That’s a reason to continue it! And so are the letters we get from people who never would have said anything before. Even the pilots and machinists are writing.” “No one seems to object to the idea of the newspaper,” Raffin responded. “The issue seems to be whether there’s been too much criticism. As you know, people are struggling to keep a positive attitude.” “Right,” Palazzo agreed, “and part of feeling positive is believing that we’re doing the right things—and not denying that things aren’t perfect. And having a little fun. What’s Mr. Johnson’s idea of open communication, ‘Free Kitten to Good Home’? I thought that was the point of the Spirit program. What’s going to happen with the task forces? Are they going to be too negative?” “There’s also concern about what customers would think if they saw the paper,” Raffin said. “Customers know when employees are miserable. It comes through in everything. If we lose this newspaper, it will be one more blow for employees. It’s bound to show up in the work.” Raffin was sympathetic, but she didn’t want to be too encouraging. “I’m not quite sure what I can say to make you feel better, Angie, except that I want to see us overcome this problem. It took a lot for you to come up here and have this conversation. I appreciate that.” Joan Raffin replayed the day’s conversations over and over in her mind. Why was she so confused about what to do? She knew that she was supposed to carry out Richard Johnson’s wishes, yet she didn’t want to act until she was sure he had thought the matter through. True, the Plane Truth could be very damaging in customers’ hands. But losing it might undermine the Spirit program; the paper was, after all, the kind of individual initiative the program encouraged. The newspaper was creating tension, but it was also creating unity. And while some people found the negativity dispiriting, others found the humor uplifting. Raffin could see the logic on both sides and found herself standing alone in the middle. What should Century Airlines do about the employee newspaper? Alfred A. Checchi is CEO of Northwest Airlines. The Plane Truth is doing management a favor. It’s revealing what Century employees are feeling and what misinformation is floating around. The negative articles show that employees are frustrated about having so few outlets for communicating with top management and that they don’t completely understand management’s decisions. The newspaper is a call for more—not less—communication. The Plane Truth demands more of management: more listening and more information. Customers’ reactions to the Plane Truth is the least of Johnson’s problems. I’ve got news for him: the company is not the center of the universe. The world really couldn’t care less about what the flight attendants think of management. Customers will read about the company from the faces of its employees. If Johnson wants customers to be turned on, he should focus on creating turned-on employees. Johnson can build morale if he “walks his talk.” He must encourage employees to ask questions and voice their opinions. Employees need opportunities to speak, especially in the airline industry, where nearly one-third of employees (pilots and flight attendants) have no set workplace and most of the remaining employees are widely dispersed. The work environment at Century—the physical isolation, the long history of difficult management-union relations, and the very real threat of job loss—makes communication absolutely essential to holding its people together. At the same time, Johnson can eliminate much of the negativity by doing a better job of communicating to employees. Most of the time, managers make decisions that are consistent with the interests of employees. They just do a poor job of explaining themselves, leaving employees to draw their own negative conclusions. It isn’t good enough for managers to do the right thing; they must also be sure people know that they did the right thing. Our goal at Northwest has been to get to the point where no one is writing anything inaccurate—not because we’re squelching open communication but because we’re doing such a great job of keeping employees informed. We believe that if we explain our actions, employees are less likely to misinterpret them. We also believe that if we create opportunities for employees to speak to management, we prevent frustration from building up. One of the first things I did when I took over at Northwest in 1989 was to hold meetings with large groups of employees. I used the first part of each meeting to explain who I am and what my values are, but I allowed most of the time for employees to speak to me in whatever format they chose. They could make statements, they could give me written information, they could communicate with me privately, they could ask questions. I could actually see people’s attitudes change at those early meetings. People started out so hostile that they were practically spitting as they spoke. Then I’d respond, they’d respond—we’d go back and forth. Pretty soon the mood changed. I saw smiles and even laughter. I’ve also seen our employee newsletters change over the past year or so. Each of our unions has a newsletter under its own control, which it publishes at its own expense. I read them all very carefully. When I first arrived at Northwest, they were scalding. But since I’ve started talking to employees and granting interviews to their publications, the tone has changed. The venomous hatred has dissipated. Every once in a while, somebody goes off kilter and says things that aren’t true. When that happens, I write a letter to whoever is responsible. Sometimes I really blast the person. I won’t let something incorrect or unfair stand in print. We also have a biweekly newspaper that management puts out, but we’ve been careful not to make it seem promanagement. Occasionally, I write a column, labeled opinion, and our union leaders often write columns for it too. The newspaper has credibility because people know they can say whatever they want. We have other means of communication. But the point is that in a little over a year, an open dialogue has virtually eliminated the frictions that typically characterize union and management communications. There’s hope for Century Airlines. Even if Johnson gets cold feet about his change program, all may not be lost—if Joan Raffin speaks up. As director of human resources, it is her job to be tenacious and say exactly what she thinks. After all, managers are paid for their judgment—not just to make judgments but to voice them. Raffin can be a symbol and a driver of change at Century Airlines by doing her job well and speaking her mind freely at the top. Gay Haskins is director general of the European Foundation for Management Development. Century Airlines needs exactly what Richard Johnson has not delivered: true leadership. Ambitious programs—not to mention troubled times—call for effective leadership in motivating employees at all levels. That means being a role model in both thought and action, motivating through dynamic behavior, and taking personal responsibility by going to the front lines to implement the program. Johnson could learn from several effective European leaders. Ingvar Kamprad and his Swedish furniture company IKEA is a good example. Kamprad, who in 1976 wrote one of the earliest statements on leadership philosophy, successfully drove home the company’s values by acting on what he was saying. He inculcated an awareness of cost consciousness by avoiding first-class flights and luxury hotels. He also lived by the rule of informality, encouraging employees to call him by his first name. Jan Carlzon, who heads the Swedish airlines SAS, is another strong leader. He ensured the success of his change program by going out and speaking to everyone in his company. Sir John Harvey-Jones was extremely effective in carrying out his change program at Imperial Chemical Industries simply by being himself: he kept his hair long, wore flashy ties, and wasn’t afraid to look a bit messy. He said what was on his mind and made an effort to speak to employees at all levels. His personality was an important factor in motivating every employee. Richard Johnson, on the other hand, has failed to show that he takes his own Spirit program seriously. His actions belie the gospel of communication and openness that he so fervently preaches. From the smaller signs of a hierarchy to the clear absence of communication, Johnson has much to accomplish in terms of sending the message of openness and communication to the troops. Change happens only when role models have support from the ranks. Too many managers claim, “Our employees are our greatest asset” without demonstrating that belief. Johnson makes that mistake, and it is reflected in the attitude of his employees. He doesn’t appear to command much respect; in fact, he is the subject of derision. Johnson should break down what seems to be a strong sense of hierarchy: employees call him Mr. Johnson, executives like Joan Raffin have posh upholstered chairs, and Johnson just doesn’t sound like the type to eat in the company cafeteria. I would suggest that he take a pay cut or make some other dramatic gesture to get his point across. Several employees allude to his sense of humor; now is the time to use it. Johnson should continue his leadership role by going out and talking to all the operations people throughout the company. He must show them that management too has made a sacrifice—or at least explain how the changes affect everyone. He could also try encouraging his employees to open up the newsletter to everyone. As for Joan Raffin: she should advise Johnson to calm down, back off, and think before taking precipitate actions that could jeopardize his entire Spirit program overnight. It can be extremely demotivating for employees to be told to retract a statement that they strongly believe in. Instead, Raffin should urge Johnson to get the key players into his office and listen to them. Openness leads to more criticism, not less. Indeed, one significant result of glasnost are the speakers on Arbat Street in Moscow who openly criticize President Mikhail Gorbachev. Johnson should see the newsletter as a fortuitous occurrence: it has revealed where he failed to lead the company during his ambitious new program. He now has the opportunity to address these resentments. With openness comes criticism. Ask anyone on Arbat Street in Moscow. Todd D. Jick is associate professor of organizational behavior at Harvard Business School. Richard Johnson’s change program is being put to the test—which is a rite of passage for any change effort. Employees are trying to gauge how committed management really is by exploring the limits of their newfound empowerment. For the Spirit program to succeed, Johnson must define the boundaries for employees’ actions without undermining their autonomy and freedom. Striking a balance between empowerment and control isn’t easy. Companies like General Electric and Motorola—widely recognized as leaders in encouraging greater worker involvement—have been struggling with it for years. Like GE and Motorola—or any company that encourages participation—Century Airlines must balance empowerment and control. It’s clear that Johnson cannot afford to shut down the newspaper. For many employees, it has become the very embodiment of the Century Spirit program and of management’s pledge to foster open communication. But he cannot allow the newspaper to continue in its present form either. Not only has it offended many different constituencies—the machinists, the board of directors, and Johnson himself—but it also could scare off passengers, who expect an airline to project an image of security and reliability. Johnson must demonstrate his support for the idea of the newspaper while tempering its negativity. First, he should meet with the flight attendants who write and publish the Plane Truth to praise them for getting involved and to thank them for caring enough to take on the extra work of putting out the newspaper. He should talk positively about the newspaper, mentioning particular articles he read and liked. By personally acknowledging the flight attendants’ effort and showing that he is behind them, Johnson will reward them and make them feel part of the team. Next, Johnson should invoke the group’s sense of responsibility by discussing the complaints he has heard. He should turn the problem over to the flight attendants by asking, “How can we take what you’ve started and make it better?” This is a nonconfrontational way of reminding them that with empowerment comes responsibility and that only if they accept responsibility can they continue to be empowered. Finally, Johnson should publicly recognize the Plane Truth by writing a letter to the editor. It could read something like this. “These have been hard times at Century. We’re all feeling the pressure and trying to find ways to cut back and do more with less. That’s why I’m giving my silver-plated DC-9 to my mother-in-law for Christmas! “But although we’re feeling the pinch, our change program is alive and well, and I want to tell you how pleased I’ve been with your efforts and enthusiasm. This newspaper is a demonstration of how far we’ve come. Even some of the articles I would rather not have seen have been heartening in a way: you don’t take time to criticize something unless you really care about it. “The Plane Truth has amply demonstrated Century’s commitment to open communication. I hope that all of you will now carry it a step further and make this newspaper an open forum for everyone at Century. We want it to inspire and motivate all of us to work together to make Century the best airline it can be. “Many Century employees have been upset recently by some of the subjects covered in this newspaper. The editors are currently searching for ways to make the Plane Truth more responsive to everyone’s needs and representative of companywide concerns. They, as well as Joan Raffin, our director of human resources, would appreciate any comments or suggestions you might have on how to do this. “There are real issues that need to be resolved, and we need to deal with them directly and constructively. The cross-functional task forces that are now in place can be a highly constructive forum for problem-solving, and we intend to create more such opportunities for sharing ideas and concerns. “Trying to change an organization is always difficult. Trying to change during a downturn is doubly hard. But I’m convinced that by working together, we can make Century Airlines a successful and satisfying place to work.” Susan Bianchi-Sand is national president of the Association of Flight Attendants, AFL-CIO. Century Airlines needs a new method of communication—one that builds up rather than breaks down teamwork. Right now the employee groups are airing complaints in a way that only reinforces disunity. More than others, the airline industry demands strong interdependence among work groups. Flight attendants, baggage handlers, and customer representatives are all part of a service chain; they depend on each other to do their jobs well. A slipup in any part of the process causes problems for the next group: customer representatives are accountable for the actions of baggage handlers, and flight attendants must calm passengers who wait too long to take off or deplane because of scheduling or ticketing problems. Moreover, there are more pressures facing the industry today than ever before. Time pressures, safety concerns, and regulatory issues, not to mention the daily issues of customer satisfaction, all create unique demands on each group. Century’s employees cannot do their jobs effectively without a well-coordinated plan—but that cannot happen unless Richard Johnson and Joan Raffin bring the groups together to talk through their differences. Richard Johnson shouldn’t try to create false unity by throwing out the Plane Truth and pretending the problems are solved. That would undermine the teamwork he is trying to create and would be seen as punishment of people trying to state their points of view. The only way to resolve this problem is to continue to involve people and let them make the decisions. Employees have to be encouraged to talk to each other about the common objective of supporting the company in these difficult times. Rather than conveying a greater team spirit, the Plane Truth reveals resentment and the lack of communication between work groups. Employees are sniping at one another through the newspaper. One obvious problem is that the paper is run by only the flight attendants—an organizational weakness that encourages just one group to include its point of view. If Century is truly committed to full participation in the paper (and it should be), then it could provide paid time off to employees throughout the organization who want to contribute to it. The Plane Truth reveals an organizational weakness: work groups don’t talk to each other. Richard Johnson is going to have to grow a thick skin. At some point, it will be appropriate for him to talk to the people who run the paper and ask, “What is it you are really trying to tell me?” Then to show his commitment to openness and participation, he should let people know exactly what he is dealing with. Johnson must prove his commitment to company unity. He should bring the complaining groups together in a work session to talk about their disagreements and to deal with the merits of the complaints. Then he must get the word out that this alone doesn’t necessarily solve the problem and that there are more steps to be taken in breaking down boundaries.

The Case of the Team-Spirit Tailspin

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