All posts by Chas Holden

The Honor and Privilege of Leadership

For B. Kevin Turner, Microsoft’s Chief Operating Officer, leadership is the greatest privilege in life. On Wednesday, April 1, Turner provided a thorough discussion on the lessons he learned about being a leader, interweaving stories from his years of experience with companies like Walmart and Microsoft. Topics ranged from the necessity of self-awareness and continuous self-improvement in leaders, to the significance of simplicity in all businesses.

Watch the full presentation below:

Celebrating 45 years of Executive Development

On Thursday, March 5, 2015, the Executive Development Program (EDP) at the Foster School of Business celebrated 45 years of advanced business education. Alumni representing over 40 organizations attended the event, from established companies like Microsoft, Nordstrom, and Boeing, to numerous startups created by Seattle entrepreneurs.

Founded in 1970, under the name “The Management Program,” EDP is designed to help individuals improve their understanding of the big picture of business. The program begins and ends with strategy and touches on every aspect of business in between. “It tells you how all these things fit together,” said Professor Charles Hill.

At the event, Dean Jim Jiambalvo talked about how the program had a major impact on the Foster school, specifically the quality of the faculty. “Executives have a higher standard, and they drove us to meet those standards,” Jiambalvo said. Often, executives enrolled in EDP want to know how to immediately apply what they just learned. “It impacted my teaching for a long time,” said Jiambalvo.

Bill Ayer discusses leadershipBill Ayer, former Alaska Airlines CEO and a long supporter of the Foster School, provided a keynote address on leadership, sharing numerous lessons and pieces of advice as he talked about his experience in a challenging industry. Among the numerous takeaways of the speech, Ayer discussed the primacy of the customer, as well as the importance of decisive action: “The perfect plan will never be perfect,” he said.

Over the course of the keynote, Ayer listed eight lessons he wanted to pass on to other executives:

  1. Get the right people on board
  2. Create a sense of urgency
  3. Focus on one to two big ideas at a time
  4. Always have metrics, what you measure is what gets done
  5. Focus on what you can control over the long-term
  6. Be totally and completely customer focused
  7. Don’t confuse being popular with doing the right thing
  8. Develop strategic partnerships

Mamtha Banerjee shares her experienceThe evening ended with an invitation for EDP alumni to share their experiences about the program. One alumna, Mamtha Banerjee, founder and CEO of MagicFlix, talked about how EDP helped her become more than a technical expert, giving her the business skills to take part in strategy and decision making. “The best part was really the case studies—getting everyone’s point of view from different industries,” Banerjee said.

The Carletti Expedition: Excerpts from Nicaragua

Guest post by Wilson Carletti, recipient of the Bonderman Travel Fellowship

Before departing for La Isla de Ometepe, I happened to meet Alex Tuthill, a UW grad who started Pacha Mama (arguably the most well-known hostel in San Juan del Sur). He left corporate America behind after the 2008 financial crisis and ended up meeting his future Nicaraguan business partner in a hostel while traveling. We chatted about his business, the emerging middle class in Nicaragua, and the various projects he is involved in around the community – currently he is helping to rebuild the local health clinic, but he is also involved in local youth sports leagues, women’s shelters, etc. And to think, simply because I wore my UW shorts that day, I ended up having an awesome conversation.

Ometepe

Ometepe is a gigantic island in the middle of Lake Nicaragua that houses two massive volcanoes – it looks like it belongs in Jurassic Park.

I sat down on the stiff, warm wooden bench on the musty ferry, as the loud motor churned at the water, attempting to pry itself from the land. Mexico was playing Nicaragua in Little League baseball on a tiny, fuzzy television set, so I sat down with some other men and entered the conversation. One guy’s favorite team was the Boston Red Sox, while the other’s was the LA Dodgers. The Dodgers fan spoke nearly perfect English – turns out he grew up in LA, but left the states for one reason or another. Now he lives on Ometepe, working as a chef.

I got up early on the day I planned to climb Madeira, the smaller, more forested volcano on Ometepe. As we clambered up a trail toward the entrance of the park, our guide, Harold, gave us a quick Ometepe history lesson (currently it has 47,000 residents, but the first inhabitants came here 4,000 years ago), and showed us some 2,000 year old petroglyphs.

He commented on the state of Ometepe. Tourism has greatly improved the quality of life on the island. For example, there used to be two schools on the island and now every town has its own school. There are still plenty of problems, one being sexual education – Harold’s wife has 64 siblings.

Sure, there are problems, but Ometepe is also nearly self-sustaining – almost all of the fruit, dairy and meat products come from the island or the lake. Unlike much of Nicaragua, there is a recycling program on the island, the animals look much healthier and in general, the people have a much greater respect for nature.

Regardless of what I am doing, I am learning every day. I am so incredibly grateful for this opportunity.

 

Granada

I wandered down the streets of Granada looking for a cab, but had no such luck. Two men, one who spoke English, near the Parque Central persistently offered me a taxi, though something in my gut told me not to go with them. I can’t really explain it – the offering of assistance felt insincere.

And then out of nowhere, a taxi driven by an older man came whipping around the corner and stopped right in front of me. There were already two women and two kids in the backseat, but he saw the other men attempting to strike a deal and immediately undercut their prices. This time my gut told me to hop in, so I did.

Minutes later the man asked me where I was from. “Los Estados Unidos,” I replied, which disrupted his calm demeanor and brought about a new energy in him.

“Los Estados Unidos es el mejor país del mundo,” he declared dramatically. I was pleasantly surprised and honestly taken aback. Most people here have been very friendly and helpful, but not to the point of declaring my country the “greatest on Earth.” He went on to explain that while the U.S. does some bad stuff, all countries have bad people, and the U.S. helps those in need. Plus, they have Major League Baseball (his brother lives in San Francisco, so he is a Giants fan).

We went back and forth talking about politics, baseball, poverty, his favorite U.S. presidents (he really liked Ronald Reagan), communism, war, etc. He explained why he feels democracy is so great; “democracy allows us to be friends,” he said, extending his hand. As I shook it, and told him my name was Wilson, he smiled and exclaimed, “Como la pelota!” – “Like the ball (from Castaway).” As we neared my destination the road became muddier and rugged; he slowed down and looked gravely at the rough terrain ahead. He then turned to me and said what might be the only words he knows in English, “I’m sorry, Wilson.”

The sincerity in his voice was heart wrenching. He felt as though he was letting me down – after that single sentence, the conversation switched back to Spanish and I assured him that everything was just fine.

Little did he know that was one of the coolest taxi rides of my life and a moment I’ll never forget.

I bid my new friend farewell and gave him a nice tip. Holding the money in his hands, he looked up, smiled, and said – “Dios bendiga usted y Los Estados Unidos” – “God bless you and the United States.”

And with that he was gone.

Adapted for the Foster Blog with the help of Wilson Carletti. More episodes to come. Follow his unabridged journey here.

EMBA students experience global business up close

International study trips have been offered as an option to Executive MBA students for many years. As the direct and indirect impact of global business on companies of every size has grown dramatically, the EMBA Program has responded by establishing this “International Immersion” experience as a required course in the curriculum. In 2014, all second year EMBA students participated in one of three study trips offered by the program, traveling to Brazil, Vietnam or Germany and the Czech Republic for an intensive week of visits to local and multinational companies, business schools, non-profit organizations and government agencies. Among the goals of the International Immersion: To offer students a firsthand experience in analyzing and understanding the business environment in these countries and stimulate insights into the potential opportunities and challenges of operating in a global context. Along the way, students broadened their cultural horizons, sampled local cuisine, and deepened their collegial bond. In this post, they share their experiences in words and images.

EMBA students tour a BMW factory
EMBA students visit a BMW plant in Berlin.

“I was so thankful to be taken out of my comfort zone and placed into a unique situation.” – Matt Gleason (North America 16)

Ho Chi Minh City
Traffic is a challenge for Hanoi commuters, too.
Old bomb crater in Vietnam
Students visit an old bomb crater in Vietnam, where the wounds of war are slowly healing.

“I left Vietnam with a sense of wonder about the growth potential of this small nation. While still a relatively poor country with major infrastructure issues, the population seems primed for incredible growth. I look forward to following the progress of Vietnam and its people.” – Andy Wolverton (EMBA Regional 31)

El Boticario
Students visit the headquarters of O Boticário, one of the world’s largest cosmetic companies, in Curitiba, Brazil
Casa de Cultura
EMBA student Ali Donway makes new friends at Casa de Cultura in São Paulo.

“Brazil is a land of contrasts. The vibrant culture, fast paced environment and economic growth are contrasted with extreme poverty and rampant crime. Looking back on my week in Sao Paulo and Curitiba I can honestly say that I saw the “true” Brazil. I was exposed to the culture in the form of the food (delicious) artwork (vibrant) and people (optimistic and friendly). I also learned a tremendous amount about the business of Brazil. I came away from Brazil with new connections, friendships and lifelong memories.” – James McBride (EMBA North America)

EMBA students tour the DAF plant
Students get a look inside a Brazil factory that produces trucks for DAF, a PACCAR subsidiary.

“The opportunity afforded by this cultural and business immersion was truly a unique opportunity that would never have been possible by simply visiting a country or culture on one’s own agenda.” – Charles Baer (EMBA North America 16)

Learn more about the Executive MBA program at the Foster School of Business.

EMBA Skamania 2014

EMBA stuents arrive at Skamania The Executive MBA experience kicks off each fall with a five day residential program at Skamania Lodge on the Columbia River east of Portland. Away from the distractions of daily life, first year students immerse themselves in intensive instruction, collaborative projects and bonding with their fellow students. Here are some snapshots of this year’s residential session, with comments by students on the value of the experience, including a challenging class with the inimitable Charles Hill, Professor of Management & Organization and the faculty director of the EMBA Program.

Students studying at Skamania

EMBA students networking at Skamania

“The rapid pace of learning at Skamania was outstanding. The professors provided ample material to read, contemplate and absorb in preparation for five consecutive days of class. During the daily sessions, students were required to recall significant portions of the assigned material to examine precepts of micro economics, finance and leadership.”

EMBA student presentations

Professor Charles Hill in the classroom

“Charles comes at you as-advertised – fast and intense – with questions requiring that you to not only read the assigned material, but also to think deeply about it.  This deep thinking will get you about 60% of where you need to be.  From there, you have to take a deep breath, sit on the edge of your seat and lean into it.  Fortunately, the intensity of Charles’ class session is matched by his love of teaching and fair approach.  It won’t hurt too badly.”

EMBA study groups

Charles Hill

“The intensity at residency was unreal. Long days, amplified by classroom encounters with professor Charles Hill out of Scared Straight resulted in a searing educational experience. I’ve never learned more in a shorter time period. The fear of failure in the classroom quickly dissipates as everyone participates, and gets not-so-politely corrected by professor Charles Hill.”

EMBA student presentations

Charles Hill

“There were three constant thoughts that ran through my head while at Skamania and in the Charles Hill hot seat:

  1. No matter what you do, do not criticize the text or mention that it might be a little dry because the guy standing in front of you (Charles Hill) wrote it.
  1. If I look him directly in the eye maybe he won’t see me …. darn it, that didn’t work!
  1. Everyone is watching  so here goes nothing! Please be the correct answer, please be the correct answer….

On a serious note I remember thinking how interesting his class was and that despite being exhausted what a good job he did keeping us all engaged in the class. Additionally I recall thinking how impressed I was with the caliber of the professors and how lucky I was to be a part of such a smart and talented cohort, Skamania was a very humbling experience for me.”

EMBA students networking

Skamania at night

“Skamania overall was a tremendous opportunity to sit through several intense days of class and brush away the mental cobwebs.  More so, though, it was an opportunity to spend focused time with your new classmates and teammates.  A great time to start some shared experiences and friendships of a kind that are harder to find the older you become.”

Learn more about Executive MBA.

Money follows vision

As the executive director of the Seattle Symphony Orchestra, Simon Woods must strike a delicate balance between the business and artistic sides of his organization. While for-profits may be based on creating value, non-profits are centered on creating “impact.” So, there’s always a struggle when deciding to “do things that lose more money, but make more impact,” Woods said.

Simon WoodsOn October 29, Woods presented at the Leaders to Legends lecture series and discussed the recent challenges and transformations the Seattle Symphony faced under his direction. According to Woods, the previous decade was not an easy one for the organization, beset by external pressures like the recession, and internal friction from the misalignment of artistic vision among members. Symphonies are large and fragile organizations: “They’re like giants—they fall hard,” he said.

Woods came to Seattle in May 2011, during “a moment of great artistic potential aligned with a moment of financial peril,” he said. Together with Music Director Ludovic Morlot, Woods has been instrumental in defining and executing a vision to establish the Seattle Symphony as a dynamic, forward-looking, and community-focused organization. Woods worked previously as Chief Executive of the Royal Scottish National Orchestra, President and CEO of the New Jersey Symphony Orchestra, and Vice President of Artistic Planning and Operations at The Philadelphia Orchestra. He’s spent the better part of 20 years on the business side of music.

Woods explained the six-part plan that helped turn things around for the Seattle Symphony.

  1. Change the brand from traditional to contemporary. According to Woods, Seattle is a progressive city, so it needs a progressive orchestra.
  2. Plan boldly. To match the new brand, the Seattle Symphony started taking more risks in its programming by performing more contemporary pieces, playing in different spaces, and collaborating with rock, pop, and rap artists.
  3. Control the messaging. Woods underscored the importance of staying on message, so that the organization could present itself as “the orchestra of Seattle, not just in
  4. Work to build a financial bridge to the future through fundraising and re-budgeting.
  5. Focus on the long term. The Seattle Symphony didn’t ask its constituents for help now, but rather for help becoming a great organization for the next generation.
  6. Gather morale. Woods wanted to “build an internal culture of collaboration and harmony.”

So far the plan has paid off, and the Seattle Symphony has balanced its budget for three years in a row. When you “invest in reflecting the values of your city, not surprisingly, you get rewarded,” Woods said. More significantly, the organization’s impact has not diminished. In fact, the Seattle Symphony has a greater impact than ever, as demonstrated by the launching of new projects like its music education program, prison outreach program, and the creation of a record label, to name a few.

The challenges may not be over, but Woods remains optimistic. “As the world speeds up, there is more and more need for beauty and peace in life,” he said.

The Carletti Expedition–Prologue

Guest post by Wilson Carletti, recipient of the Bonderman Travel Fellowship (read more about the fellowship and Carletti’s backstory here).

Wil Carletti I do not think there is necessarily a definitive “line,” that we cross and magically become adults; however, as I look around, I watch my best friends, acquaintances, family, co-workers (real, intelligent human beings) crossover from being merely faces in the crowd to the ones standing onstage. Better yet, they’re not just standing, they are dancing, celebrating, creating beautiful art, expressing themselves. They’re winning PAC-12 championships (and IMA championships), creating clothing lines, moving to faraway places, building companies, designing products, and literally saving lives. They are starting non-profit organizations, they’re becoming doctors, lawyers; they’re pushing their limits, as well as those around them. As I stared out the airplane window—the sun had just set behind Managua—I began to think about just how far I was about to push my own limits.

After landing and standing in line at customs, I found the shuttle that would take me to Granada. At this point, darkness made it difficult to take in much of the scenery, so I chatted with the driver a bit. While it seems as though Nicaragua takes the lines on the road a little more seriously than drivers did in China (I participated in an Exploration Seminar there), it took me awhile to get used to. I kept noticing buses with bright, blinking, colorful lights all over the front end – I asked the driver what that was for. Apparently it’s legal in Nicaragua, so why not? “You should see this place during Christmas time – the entire road looks like a Christmas tree,” he exclaimed.

We made it safely to the hotel, and, as I sat there, about to embark on the adventure of a lifetime, I decided I would write to reflect on what was. I would write to grow, as I explore what will be. And I would write to inspire others to pursue what could be.

Of all the paths I described above, none is more worthy than the other; you do not have to be an astronaut or rock star (or go on an 8-month long adventure for that matter) to make a positive difference in this world. Find something that you are passionate about and share it with those around you. Find your stage.

I felt excited to try to find my stage over these next eight months. While I definitely felt nervous, I was pleasantly surprised by how calm I was. I have been thinking about this for months now, and finally, I was ready.

The next day, when I awoke in my warm, humid hotel room in Granada, I felt like I had woken up from a long dream. I was a bit anxious – I knew no one and I was far away from home. Finally I strode confidently out onto the cobblestone street.

Adapted for the Foster Blog with the help of Wilson Carletti. More episodes to come. Follow his unabridged journey here.

Alaska Airlines and Foster EMBA

A special relationship

Brad Tillden in an EMBA classroomBrad Tilden knew it was a long shot. As a young finance executive at Alaska Air Group in the mid-1990s, Tilden made the case to his CFO that sending him to the Foster School’s Executive MBA Program would be a sound investment. “The company wasn’t flush in those days, and we had always taken a conservative view on costs,” he recalls. “So I didn’t expect the answer to be quick or positive.”

But after conferring briefly with then-CEO John Kelly, Tilden’s boss came back and simply wrote “OK” on his proposal. “I was thrilled,” says Tilden, Alaska’s current chairman and CEO.

So began a long and symbiotic partnership between Alaska and Foster that goes far beyond the company’s significant philanthropic investment in the school.

The EMBA Program has become a de facto executive training academy for Alaska leadership. To date, 22 of its most promising executives have graduated from the program. Many now serve in senior roles at the company, including Tilden (EMBA 1997); Ann Ardizzone (EMBA 2008), vice president, strategic sourcing and supply chain; Karen Gruen (EMBA 2010), vice president, corporate real estate; Kris Kutchera (EMBA 2009), vice president, information technology; Andy Schneider (EMBA 2009), vice president, inflight services; Joseph Sprague (EMBA 2007), senior vice president, communications and external relations; Shane Tackett (EMBA 2011), vice president, labor relations; Shannon Alberts (EMBA 2005), corporate secretary; and Diana Shaw (EMBA 2013), vice president, customer service.

And though former CEO Bill Ayer’s (MBA 1978) MBA came from Foster’s full-time program, he has brought his formidable expertise and insight to teaching the EMBA’s powerful “CEO and the Board” course for nearly a decade.

Tilden says the impact of this cohort of Foster-educated leaders is evident throughout the firm: “Having a critical mass of people with a common education and disciplined approach helps us frame issues and execute solutions more quickly.”

“The EMBA Program has played an important role in developing high-performance leaders at Alaska,” adds Ayer. “The classes, the teamwork, and the networking opportunities add up to a unique learning experience. In a business where people are the only sustainable competitive advantage, a Foster EMBA provides a critical edge.”

True North

Keeping the customer as its lodestar, Alaska Air Group navigated a turbulent decade to emerge as one of the marquee companies in the Pacific Northwest

Alaska Airlines plane in the skyAlaska Air Group recently moved into to the Fortune 500, that ultimate collection of the nation’s elite businesses, that manifest marker of size and success.

It was no small feat for a comparatively small, independent carrier to join the big boys in an industry marked by brutal competition, rampant consolidation, and chronic crisis. And it was even more remarkable that Alaska sustained its growth through a decade of Herculean trials.

So you might expect this momentous milestone would call for some serious celebration at the company’s south Seattle headquarters. Some bottles of champagne, perhaps. A press release, at least. Did they even pause to savor the achievement?

“We celebrate a lot of things,” says Brad Tilden (EMBA 1997), the chairman and CEO of Alaska Air Group. “But we didn’t really celebrate joining the Fortune 500.”

The understatement adds up when you consider it comes from a man possessed of a pilot’s cool and an accountant’s good sense leading a company with roots in the Last Frontier.

“It’s like compound interest,” Tilden adds. “Somebody had a really good idea 82 years ago, and we’ve been working at it year after year.”

 

Alaskan roots, American dream

Linious McGee's three-seat Stinson
The roots of Alaska Air Group: Linious McGee’s three-seat Stinson.

That somebody was Linious McGee, who began flying passengers and cargo in his three-seat Stinson between Anchorage and Bristol Bay back in 1932. A merger, two years later, with Star Air Service created Alaska’s largest airline, eventually renamed after the state.

At the industry’s deregulation in 1978, Alaska was the 24th largest airline in the US. And it was just beginning expansion into the Lower 48. By the end of the 1980s, Alaska Air Group had added regional carriers Horizon Air and Jet America. It had enjoyed nearly two decades of profitability and sustained growth. And it had earned a reputation for superior customer service.

Economic prosperity and low fuel costs kept Alaska growing through the 1990s.

But Tilden, who joined the company from Price Waterhouse in 1991, says that Alaska Airlines was growing almost despite itself. Friendly service masked a declining efficiency of operations. Complacency had crept in, a culture of good enough, not great.

As the century turned, Alaska’s internal vulnerabilities were about to be mortally tested.

 

Turbulence

The century’s first decade began in tragedy. The January 2000 crash of Alaska Airlines flight 261—half of its 88 victims being employees, family members or friends—sent the tight-knit company into mourning.

It was only the first of a litany of trials to challenge both airline and industry. Shortly after the dot-com bubble burst in 2001, the attacks of 9/11 altered air travel forever. The SARS scare of 2003 followed. Then oil prices spiked just as the financial crisis shook the foundations of the global economy.

Amid the external pressures, Alaska Airlines faced a litany of contentious labor contract negotiations beginning in 2003. Strained morale brought a dip in performance. There were simply too many late flights and mishandled bags.

“Alaska was burning through the goodwill it had earned over many decades,” says Bruce Avolio, director of the Center for Leadership and Strategic Thinking at the University of Washington Foster School of Business.

A new case study by Avolio, Chelley Paterson and Bradford Baker chronicles Alaska’s decade of dilemma. Survival would require absolute transformation—modernizing operations and slashing costs—without sacrificing the legendary customer service experience that had made Alaska Alaska.

“There was an increasing recognition among the leadership,” says Avolio, “that the course they were on could not continue.”

 

Crossing the Rubicon

The situation demanded decisive action. And fortunately, Bill Ayer (MBA 1978) had risen up the ranks to become CEO in 2002.

“At a time when this business required a person of tremendous courage,” says Tilden, “Bill was the perfect leader.”

Ayer never wavered from hard—and sometimes heartbreaking—decisions. The first set the tone for the company’s transformation. Amid an epidemic of default that swept the major carriers, Ayer declared that Alaska would not seek bankruptcy protection.

“We figured out what our costs needed to be for us to be viable and said to ourselves that we simply have to get there,” recalls Tilden, then CFO.

Among the difficult moves to ensure the company’s survival were a painful round of layoffs, the outsourcing of some ground operations, and some pragmatic dealing for concessions from the unions.

“The choice to stay out of bankruptcy helped the company downstream,” Avolio says. “By not destroying people’s pensions and protecting this covenant with their employees, Alaska’s management salvaged a degree of trust.”

That trust would prove vital.

 

Fix Seattle, then the company

Alaska Airlines plane flying over SeattleIf cost cutting took toughness, improving performance took smarts. There was a lot to fix, but Ayer and Tilden chose, wisely, to first fix Seattle, Alaska’s largest hub.

“We identified the basic things we needed to improve upon to be successful—safe operations, on-time performance, low fares and great customer service,” says Tilden. “And we focused relentlessly on them.”

Applying lean methodology and measuring every task, performance began improving immediately, first in Seattle and then throughout the network.

“Once they fixed Seattle, Alaska demonstrated what can be accomplished in its other cities,” says Avolio.

The dramatic transformation has been widely confirmed. Alaska has been rated highest in customer satisfaction (among traditional network carriers) by J.D. Power seven years in a row. It’s been number one in on-time performance four years running according to FlightStats.com. Outside dubbed Alaska its “Best Airline” in 2014.

Alaska has earned highest marks in just about every category awarded: air cargo handling, delivery and logistics, technology, maintenance, sustainability, philanthropy, loyalty program, employee satisfaction—even friendliness to pets.

And aggressive expansion to the East Coast, Midwest and Hawaii when others retreated has made Alaska one of the fastest growing companies in the industry.

 

The importance of being Alaska

That growth has lifted Alaska into the Fortune 500. The company may barely have noted the milestone. But Seattle should.

Alaska’s ascendancy adds another industry leader to the region’s increasingly diversified economy, according to Suresh Kotha, the Olesen/Battelle Excellence Chair in Entrepreneurship at the Foster School.

“Having another service-based company like Alaska become a dominant player in its industry creates jobs, broadens our economy and buffers us against the kind of cyclical downturns we used to face.”

He’s referring to the not-so-distant past when a slowdown at Boeing threatened to shut down the city. But today Seattle enjoys a far healthier balance of manufacturing, service and retail. The region is home to nine of the Fortune 500 plus other powers in a wide array of industries including aerospace (Boeing’s continued strong presence, plus a galaxy of suppliers), software (Microsoft, RealNetworks), retail (Amazon, Starbucks, Costco, Nordstrom, REI, Eddie Bauer), truck manufacturing (PACCAR), trade (Expeditors International), forestry products (Weyerhaeuser), and clusters in telecommunications, biosciences and gaming.

A successful airline adds to the economic diversity. “It’s making Seattle one of the nation’s best places to do business,” Kotha says.

Avolio adds that other companies could learn a great deal from Alaska’s customer focus and level-headed navigation of crisis “with discipline and focus.”

The other lesson of Alaska, he says, “is that the essence of great leadership is building a sense of ownership in employees and customers.”

 

People power

Ayer asked a lot of Alaska Air Group’s employees to save the company in its darkest hour. And those employees stepped up.

“We are the only legacy airline not to have filed for bankruptcy, thanks to the determination of our people,” he says. “What we learned by doing the hard work ourselves bodes well for our future.”

In 2012 Ayer passed the controls to Tilden, a new kind of leader for a new chapter in Alaska’s story. His focus today is on fine tuning the customer experience.

Tilden is continuing to foster Alaska’s celebrated culture of innovation that delivered the industry’s first online ticket sales and check-in kiosks, and is now developing apps to remove the anxiety from travel. “The goal today is to be the easiest airline in the world to fly by 2017,” he says.

Of course, technology can only do so much. People make the difference. While continuing to cultivate top management prospects in the Foster Executive MBA Program (see sidebar), he’s really trying to push the airline’s leadership to the front lines.

“The big opportunities going forward will come from consistent execution and delivery of service across every airport and every employee,” says Tilden.

To that end, he has initiated two company-wide programs to engage every employee and empower them to lead. It helps that they have a vested interest. As the profit-sharing program that Ayer and Tilden started during the lean days of the mid-2000s begins to pay handsomely, the link between airline performance and personal prosperity is easy to follow. That’s good for everyone’s bottom line.

“If the employees want us to be a great airline, we’ll be a great airline,” Tilden says.

 

Further frontiers

Alaska Airlines plane flies over a mountainThe airline industry seems to have stabilized, and Alaska is all systems go, elevating both its standards and goals. An exemplar of corporate responsibility, it’s also a pillar of philanthropy in the larger community—and especially at the University of Washington.

“There is a really special culture at Alaska,” Tilden says. “A real sense of mission, that what we do for the communities we serve—the infrastructure we provide businesses, the connections we provide families—is important.”

“What makes me proudest is the company’s outstanding performance since I retired,” says Ayer. “The team is executing better than ever and, as always, there’s no shortage of challenges. The reality is that there are a lot of factors that are not controllable, so those that are must be very well managed.”

Tilden is ever vigilant. Or, as they like to say in Alaska’s HQ, “Brad’s never happy.”

He’s seen the perils of complacency, especially when most of the challenges ahead are yet unseen.

“In some ways, the challenge was simpler ten years ago,” notes Avolio. “You knew all of the things that were broken; you just had to fix them. Today, you don’t know where the market is going. There are a lot of question marks.”

One certainty is that fierce competition will come from smaller airlines and the big ones (which keep getting bigger through consolidation). Most immediately, Delta is making a significant incursion on Alaska’s prime West Coast territory.

But Tilden believes that Alaska Air Group has found the secret. And it’s not at all sexy. “What’s going to help us succeed over the long run is continuing to do the basics well,” he says. “We need to be safe. We need to be on-time. We need to offer low fares. We need to provide great service. Those things are 100 percent in our control. And I think if we get them right, we’re going to win.”

 

Additional reading:

Alaska Air Group has long leveraged the Foster Executive MBA Program as a de facto training academy for future leaders, beginning with current CEO Brad Tilden (EMBA 1997). Learn more about the special relationship between Foster’s EMBA program and the Alaska Air group.