A Christmas Thought

Christmas: the one day each year where we pause to reflect on our past and gather up our hope for the future. And to cement the deal, in a week we’ll formalize our hopes into resolutions that generally fall by the wayside before Punxsutawney Phil takes his bow in February.

Why is that, do you think? Could it be that we envision large scale scenarios such as world peace or clean energy? What if we narrowed our hopes down to a few that we could each handle individually? How about kindness to strangers? A cliché, I know, but can you remember the last time you held the door for the next customer or asked the bus boy how he was doing?

Messengers seem to be fair game, too as we metaphorically squeeze their shoes for enforcing policies created by the higher-ups. Clerks and others on the lower rungs of the corporate ladder are tasked with giving us minimal service. Why take it out on them? Maybe we need to take the extra time in getting a manager, asking for an explanation, and seeing how the true instigator enjoys tight shoes.

No, there are many things we can do every day that might lead to a more civilized society. Over-simplified? Perhaps, but I don’t think so. Try it out and let me know what you think.

A Corporate Christmas Newsletter

I’ve made no secret of my aversion to Christmas newsletters that invariably show up within perfectly acceptable holiday cards. I’ve wondered of late, though, why corporate Christmas newsletters are rare, if not entirely unheard of. Perhaps it is due to the current state of corporate mentality and, as evidence, I submit an entirely fictitious holiday newsletter from American Airlines to its employees. Why American? Well, I’m quite familiar with the corporation and its recent foray into bankruptcy makes for a logical candidate. Unfortunately, I can’t help but think that most, if not all, corporate executives have similar viewpoints.

Dear Fellow Employees,

It’s that time of year again and there is much to cover as 2011 proved to be quite eventful. We started off with a new greeting (We’re Glad You’re Here) and couldn’t help but think that this new verbiage would make a big difference in our bottom line. 

And, boy, did we grow! Not in the traditional way by hiring and expanding from within: that would take too long. So, just like adoptive parents, we entered into agreements with Japan Air Lines, WestJet, Qantas, AirBerlin, and Cathay Pacific while expanding our ongoing relationships with British Airways, Iberia, and, of course, our friends at American Eagle. And Presto! We’ve grown by leaps and bounds without adding one single employee to our close-knit family here at AA.

We also handed out awards for improved customer service like they were going out of style. It’s hard to imagine how stations could improve what with a well paid, highly motivated group of employees ever confident in the course we’ve chosen to guarantee continued success. Nevertheless, many found a way to “do more with less” and that’s what family is all about. We look forward to the day when they’ll be able to do everything with nothing.

There were some challenges, too: bad weather and resulting cancellations, lawsuits with Sabre and other online ticket agencies looking for ways to poison the special, lucrative association we enjoy with would-be passengers and, of course, continued quarterly losses. Jeez, you’d think that we were trying to lose money! It’s not our fault, you know. High fuel prices, competition, and other unforeseen events conspired against our tried and true formula for profitability (maintained over the past decade or so).

No family is without black sheep and there is always a relative or two that seems to upset the apple cart whenever possible. And some of our pilots filled that role nicely when many chose to retire in September and October. We can’t think of any good reason why they would choose to leave the AA family behind, but leave they did. And they asked for their retirement in one large lump sum as if we couldn’t be trusted to dole out their pensions in a monthly annuity. Such mistrust threatens the core of any family and we are no different.

So, with only a paltry sum $4.5 billion in our account, we sought the help of a family counselor. Yes, some would call him a bankruptcy judge, but what good is served with such harsh words? We can now turn this challenge into an opportunity as we realize that we can all share good times with fellow employees much longer than ever envisioned. And we’re happy to announce that some of our family will be able to spend more time with their families as we readjust our workforce.

Better yet, just last week we gained FAA approval to use iPads in the cockpit! This will allow our pilots to remove much weight from their kit bags and ease the stress and strain on their backs. This will come in quite handy as medical benefits are reduced. We’re also looking at removing transportation from employee parking lots to the terminals. What better way to stay in shape than a brisk walk before settling in for a rewarding day’s work? And who doesn’t enjoy a stroll at the end of a day?

Much like every corporate family, we lost several of our top executives just as the holiday season got under way. We wish them luck as they’ve chosen to pursue other opportunities. Now some may say that is fancy talk for axed, canned, fired, or ousted but these leaders deserve much better than such negative words after giving their all. Heck, had we not paid them handsomely and lavished them with benefits and perks we would have been unable to retain them for this long. Who knows what perils we would have faced without their stewardship. Their replacements have been chosen from within the AA family because we feel that no one knows us better than those raised from within. Kind of like inbreeding, if you will, but who better to trust?

As you can see, we’ve come far this year and look forward to another year with everyone in the AA family. Some family members from the Senior Executive branch will be enjoying the holiday at our London “getaway apartment”. Alas, it may be our final Christmas there as some claim it is an unaffordable luxury. We hope, though, that we can convince our creditors that such environs lead to creative solutions that we regularly employ in our day-to-day decisions to maximize success. After all, where would you be without us?

Happy Holidays!

Less for More

Once again, the USPS (aka the Post Office) is up against the wall in trying to balance costs with revenue. As a result, we can expect longer delivery times and higher postage rates. In other words, less for more. I’ve covered this subject area before in trying to describe the downward spiral created by such rationale, but this specific case has far reaching effects for us all.

Less for more is nothing new. I saw it in the Air Force as Officers’ Clubs increased dues while reducing services. They considered this a way to return to profitability when, in fact, all they did was create additional incentive to seek out other venues for socializing. Many installations now have All Ranks Clubs as a replacement for defunct O CLubs and their brethren, the NCO Club.

The USPS, however, impacts a far greater portion of the population so why is it in such dire straights? First of all, I’d say, it failed to fully appreciate the digital competition created by emails, online bill payment, and the like. Many of us now turn to the computer for solutions that were once provided by the local Post Office. FedEx and UPS have also taken a good bit of the shipping business away by providing what is perceived as better service for an admittedly higher price.

Perhaps I’m too harsh on those charged with running this operation. If so, then the truth is that the whole idea of mail delivery is becoming an anachronism whose day in the sun has come and gone. But many smaller communities still rely on the system due to a lack of options. Satellite internet service is sometimes the only way to get reasonable online speeds and it isn’t cheap. And, of course, one must have a computer to participate.

The other elephant in the room is the self-sustainability mandated by Congress. If we can agree that the USPS provides an essential service, then we must be prepared to offer a subsidy of some sort to ensure its continued vitality. Oh, yeah: we’re not in the spending mood when it comes to our government, are we? So what else can be done?

How about upping the cost of a first class stamp to a dollar? Forget the one and two and three cent increases. And how about ringing up the rate for catalogs and other bulk rate mailings that include credit card offers and the like? God knows most would welcome less of those items in the mailbox. Political pamphlets should be charged the most if for no other reason than they are the most noxious and invasive.

Most would not mind paying more so long as more is received. But paying more for less is a recipe for disaster. The Post Office still plays an important role in today’s society, but should they continue to whittle away at the services they provide it will only accelerate the demise of an institution still valued by a sizable number of folks with little or no choice in the matter. Talk about class warfare...

Rewarding Failure

This past week my previous long-time employer, American Airlines, filed for Chapter 11 bankruptcy. My decision to retire four months early now seems extremely propitious as I am in receipt of a lump sum representing 100% of what was expected. My colleagues still on the property will not be so fortunate. Time will tell, but it is safe to assume that a good portion will be passed off to the PBGC which will then dilute it further. Pay rates and work rules will also be “adjusted” to the detriment of the employees. I’m not going to take up your time lamenting about the unfairness of it all. Rather, I’m asking that you take a moment with me in an attempt to identify the true miscreants and the punishment for their deeds.

Every business venture has two competing forces: management and labor. Management’s task is to create a business plan that will reward all parties and labor’s role is to implement that plan. Needless to say, management wants to control every last penny of profit while labor seeks to raise the pay and benefits of the workforce. The means to this end, labor-wise, is sometimes through organizing under the banner of a particular labor union. Other businesses find less confrontational ways to handle the dichotomy of expectations. Neither is perfect and either scenario fits into our exploration.

No employee is interested in seeking to derail an employer and have them go out of business. Where is the sense in that? Corporate policies may erode morale to the point where customer satisfaction suffers and impacts the bottom line, but such cases usually result from short-sighted management techniques. So why, then, do businesses fail?

Well, some do because they run out of cash. Both sides suffer when the company dissolves and all are in search of a new position. Others, though, such as AMR (American’s parent) are still in possession of large sums of ready cash. They apparently grow tired of negotiating with seemingly recalcitrant employee groups and paying off loans they’ve received. And they find it easier to take the bankruptcy path that offers much less resistance.

In the courts, contracts can be set aside, pensions reduced or eliminated altogether, and outstanding bills can be renegotiated to the tune of something less than 100 cents on the dollar. Pretty neat, huh? Well, not if you’re a worker bee. But if you’re on the management team, all is well. Your pay and benefits remain largely untouched while you “re-organize” your floundering enterprise.

But who put the business in jeopardy in the first place? If the employees are charged with carrying out a battle plan that fails, does it not fall to the field generals when looking for someone to blame? I’d say so, yet day after day, in filing after filing, executive teams remain whole while shifting draconian measures to the backs of those least responsible for the train leaving the tracks.

Gerard Arpey, American’s CEO until one day before the filing, was heralded as saint-like because he took no severance package as he retired. I guess it’s easier to claim the moral high ground when you take a position with an investment group (headed up by a Continental ex-exec) the following day. And the rest of the nabobs from the Board of Directors on down remain in place despite the fact that they were unable to preserve the viability of what was once the largest airline in the country. Is there any reason to believe that they will suddenly discover the error of their previous ways and succeed where they’ve just failed? I doubt it and so should you.

Does that mean AA is headed for extinction? Not by a long shot. Many companies succeed not because of their leadership, but in spite of it. My only suggestion is that in these cases, the blame should start at the top and trickle down rather than the other way around. Where is the incentive to succeed when failure carries no penalty and, in many cases, its own rewards in future compensation?

It’s safe to say that another bankruptcy will occur in the not-to-distant future. And it’s equally safe to say that those surrendering a larger share will be the ones least responsible for the failure. And that, folks, just ain’t right.