Mastering
the Art of Change
Mastering the Art of Corporate Reinvention
(2000), hosted by Jeff Greenfield, Senior Analyst for CNN, showcases two former chief executives, Gordon Bethune and
Michael Bonsignore, of Continental Airlines and Honeywell, respectively. During
the discussion, Greenfield describes the situation facing Bonsignore at
Honeywell as a “corporate culture dilemma”; however, Bonsignore is quick to dismiss
the characterization of “dilemma” and replace it with as a culture facing a “challenge”
(Mastering, 2000). In order to understand why this push back from the former chief
executive office is important in assessing his time as CEO, one must first look
at the two men before they reached the top of the corporate ladder.
Before
soaring to the top of Continental Airlines, Gordon Bethune’s first encounter
with planes came with his dad’s crop duster, along with his father’s urging for
Bethune to become a pilot, an urging so rejected by Bethune, he literally left
home to join the Navy. Bethune dropped out of high school, joined the Navy,
later attained his high school diploma, and attended the “Advanced Management Program”
at Harvard’s Business School. While in the Navy, the results of his aptitude
testing led to more school, which led to a job as an electronics mechanic,
which eventually led to a position as the supervisor of the night shift (Mastering,
2000). Here, Bethune learns it is much easier to work with people when they
like you and when people are made to feel they are an integral part of the
organization, by a leader, it is much easier to lead change (Mastering, 2000).
Upon leaving the Navy, his experience of prepping planes for the Navy led him
to jobs with Brannon, Western, Piedmont, and Boeing; during which he received
his pilot’s license, headed Boeing’s customer service, and headed the divisions
for and learned to fly Boeing’s 737 and 757 jets (Mastering, 2000). When he was
recruited by Continental Airlines in 1994, he had a diverse background in the
airline industry.
Unlike
Bethune, Bonsignore had attending the Naval Academy at Annapolis as his single
focus, which he accomplished. He began his career with Honeywell upon his exit
from the Navy (Mastering, 2000). Honeywell is a company, originally
headquartered in Minneapolis, Minnesota, with a history that spans more than a
century (Mastering, 2000). As Bonsignore states, “I’d been with the company for
eighteen years before I went to Minnesota for the first time” (Mastering, 2000).
He continues, “I was really a product of the colonial part of Honeywell… not
terribly steeped in the corporate culture” (Mastering, 2000). Bonsignore’s
exodus from Minnesota did not come until Honeywell merged with Allied-Signal in
1999 and moved its operations to Morristown, New Jersey (Mastering, 2000).
Bonsignore had been named as Honeywell’s CEO in 1993 and kept his title and
position through the merger (Mastering, 2000). By the year 2000, Bonsignore had
been with Honeywell for thirty years (Mastering, 2000). The way in which each
man approached the challenge of change differs just as uniquely as do their
backgrounds.
By
viewing the introductory videos for each CEO, Greenfield is able to demonstrate
how each man approached change. Bethune, as noted by the narration, works the crowd
at George Bush Intercontinental Airport in Houston, whether cameras are rolling
or not, as if he was “running for governor” (Mastering, 2000). He is seen
engaging with both customers and employees, while offering words of
encouragement for a job well done. Bonsignore observes one of Bethune’s
greatest strengths is his “candor”, his ability for being able to present the “unvarnished
truth” (Mastering, 2000). Given Bethune was faced with what Greenfield
characterized as an opportunity that should have been met with “deepest
sympathies” rather than congratulations, it can be argued this strength is what
allowed Bethune to, within a year’s time, take a $200 million loss and a
company “on the verge of bankruptcy” and transform it “from worst to first” (Mastering,
2000).
By
contrast, Bonsignore’s introductory video portrays him as a CEO returning to
his old neighborhood and seeking to “regain the golden touch” that allowed him
to transform the original Honeywell during the early 1990s (Mastering, 2000).
He has given $5 million as “seed money” for a housing project, Portland Place,
designed to improve the “troubled” Phillips Neighborhood of Minneapolis (Mastering,
2000). The personable style of Bethune is noticeable different than the
seemingly staged visits, average one to two times per week, of Bonsignore.
Portland Place homes feature traditional Honeywell products like thermostats
and alarm systems; but, the newly merged company is now described as a “diversified
industrial conglomerate” with 40% of its business devoted to commercial aerospace
and 40% of its revenues realized through service contracts (Mastering, 2000).
Whereas Bethune wants to listen to what the public wants and then set about
giving them just that; Bonsignore’s main priority is “global expansion” (Mastering,
2000). Bethune seeks to facilitate change by giving employees buy in. He
allowed the men and women who prep the planes to have input with airline
scheduling. Each time Continental hit its well-articulated goals of being first
in customer service categories, employees were rewarded $100; and, still
awarded $65 if second place was reached (Mastering, 2000). Perfect attendance
was even rewarded through twice a year drawings for a new Ford Explorer (Mastering,
2000). Bonsignore, when asked by Greenfield, how he dealt with the workers
during the Bendix Brakes recall and how the workers felt, avoids the question
and turns the discussion to public safety and technological talk regarding how
the brakes failed (Mastering, 2000). Bethune’s management philosophy is clear, “Happy
employees do a better job for the customer which in turn boosts the bottom line”
(Mastering, 2000). Perhaps this is why Bonsignore, after one year post merging
and maintaining his position as CEO, is still charting a course for change
while Bethune has realized a complete turnaround and is experiencing profits (Mastering,
2000).
Bonsignore
believes he has set clear goals: delighted customers, profitable growth, and
leadership and control; yet, these are subjective at best. Unfortunately, these
are the goals from which the Bonsignore’s “Day One” decree flowed, “The new
Honeywell will not be, not be, a derivative of the old Honeywell or old
Allied-Signal” (Mastering, 2000). As he continues, he states, “We will
compensate and reward employees who look for the best practices from both to
create a new culture and we will punish those who don’t” (Mastering, 2000).
Later, Professor Alan Lynn asks how each inspires trust and loyalty with their
workers and whether or not rewarding employees was more important or if
building a sense of team work was preferred (Mastering, 2000). Bethune’s answer
is passionate and likens the interconnection of rewards and team building to
that of asking “Who’s in the huddle?” at a football game (Mastering, 2000).
Bonsignore responds in a corporate, calculating manner; and, while he states
rewards and teams go together, his actions belie his words.
By
the summer of 2000, Honeywell’s lofty growth predictions failed for two
quarters. When asked by Greenfield, Bonsignore admits Honeywell had been “caught
up in merger mania and all the euphoria associated with bringing two companies together”
(Mastering, 2000). They had underestimated the task of completing the
integration of Honeywell and Allied-Signal, a $26 billion merger (Mastering,
2000). When Bethune is asked to assess Bonsignore, he states Bonsignore “exudes
confidence”, knows what drives the business, and possesses incredible
organizational abilities; qualities which assure things are done right and
which define a manager, not a leader (Mastering, 2000). Bethune, as CEO of
Continental, is one of Honeywell’s largest customers and sits on the board of
Honeywell. He used quantitative expectations and measurable so his employees
had a clear understanding of how to get from point A to point B; Bonsignore’s
goals were subjective at best (Mastering, 2000).
Brown
(2011) lists: advocates of change, degree of change, time frame, impact on
culture, and evaluation of change as factors that must be considered in order
for change, necessary for survival, to succeed. The degree of change at
Honeywell was extreme. The move from Minnesota to New Jersey impacted 11,000
workers. An edict was given to a company with history than spans more than a
century; it would not be a derivative of its former self, neither would
resemble Allied-Signal. What was the image for the new culture? Bonsignore asks
employees to identify best practices; yet, guidelines for doing so are scant;
however, punishment is promised for those who fail. Bonsignore observes
Honeywell had taken its “success for granted” and that it needed a “kick in the
pants”; however, he later admits the merger and the projected earnings per
share predictions were “over ambitious”, a failure to communicate took place,
and three weeks lapsed before reasons were presented to Wall Street as to why
Honeywell missed its predicted revenues (Mastering, 2000). Honeywell lacked a
clear vision, a climate favorable for change, effective communications, a
positive rewards system, participation of its workers, and leadership from its
CEO who seemed more concerned with change and how it benefited him, personally,
and less concerned with his growing difficulty in speaking the language of
Honeywell’s programmers and who was fast approaching the “Jurassic Park” period
of ten years he himself had set as a tenure for CEOs (Mastering, 2000). It is
with little wonder and amazement a quick Google
search returns the predictable change for Honeywell along with a subsequent
article by Gilpin (2001); Bonsignore resigns.
References
Brown, D.R. (2011). An Experiential Approach to Organization
Development. (8th ed.). Upper Saddle
River, NJ: Prentice Hall.
Gilpin, K.N. (2001, July 4).
Honeywell Regroups as Chief Resigns. In Business
The New York Times. Retrieved
from http://www.nytimes.com/2001/07/04/business/honeywell- regroups-as-chief-resigns.html
Mastering the art of corporate reinvention [Video file]. (2000). In Films On Demand. Retrieved February
28, 2016, from fod.infobase.com/PortalPlaylists.aspx?wID=-1&xtid=30238
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