In 2013, Delta Airlines was the second largest airline in the world, in terms of passengers carried (in millions). It also came in second place for fleet size (with 773 airplanes) while American Airlines came in first with a fleet size of 971. With assets of $59.4 billion and a market value of $30.4 billion, it’s undeniable that Delta is one of the most profitable and prosperous airlines not only in the United States, but also internationally. However, just ten years ago, Delta was mired in controversy and debt. The success of Delta Airlines in recent years is just a small portion of a long and winding tale of unparalleled success married to catastrophic failures.
The Leadership Style of Mr. Woolman
Coincidentally, “Delta started its airline business in 1929, the year the Great Depression began,” writes Harry L. Nolan, Jr., author of “Airline Without A Pilot” [affiliate link] (Nolan, 49). Hence, the success the airline has experienced in recent years is in stark contrast to the dire financial straits that existed in the U.S. when Delta first came into inception.
In order to survive the Great Depression, the CEO and founder of Delta, C.E. Woolman, “watched every nickel earned and spent by Delta” while constantly reminding his employees to work hard to fill the Delta planes (Nolan, 49). At times, Woolman would even “pick up paper clips and rubber bands off the floor or a desk and recycle them” in order to conserve costs (Nolan, 49). But, for all of his cost-cutting measures at Delta, Mr. Woolman never short-changed his customers or lessened their experience while flying Delta.
“Woolman focused employee frugality on internal costs while making sure to spend the necessary money on passenger comforts to remain competitive.”
— Nolan, page 49
In all essence of the word, C.E. Woolman was a true leader. He went by a simple philosophy: “When the employees are happy, the customers will be happy” (Nolan, 45). Mr. Woolman always maintainted that his integrity was his best asset and one that allowed Delta to experience both external and internal success. In regards to customer service, Woolman emphasized to his employees to “always put [themselves] on the other side of the counter” (Nolan, 46). While Woolman had great self-confidence and belief in himself, he never let egotism or personal glory get in the way of Delta and its employees.
“No one person in an airline. An airline is a team.” — C.E. Woolman
The Years of Trials and Tumult at Delta
Nolan, in “Airline Without A Pilot,” asserts that Delta began experiencing difficulties in the 1990s and early 2000s primarily because the leadership of C.E. Woolman was gone. To make matters worse, the Delta family were then treated to disrespectful, greedy, and woefully inept CEOs like Ron Allen (1993–1997) and Leo Mullin (1997–2005). Had Delta’s Board of Directors appointed more qualified CEOs, with “proper management leadership” and integrity, perhaps the airline would not have experienced such a frightening and terrible downfall — one that resulted in the filing of bankruptcy in 2005 (Nolan, 18–19).
In the years under CEO Woolman, Delta employees had learned that “when management asked employees to endure temporary financial pain, due to business conditions, management would share equally in that pain” (Nolan, 47). However, under Ron Allen and Leo Mullin (between 1993 to 2005), Delta employees saw first-hand how arrogant, egotistical, and irresponsible management can bring down a company to its knees.
“Fuel costs won’t sink Delta but leadership might.”
— Harry Nolan (page 219)
One of C.E.’s Woolman’s great leadership abilities that left me impressed was when Nolan describes in the book how Woolman would show immense humility by listening to employee concerns and approaching them in person to tell them how much he appreciated their hard work and dedication to the Delta family.
Woolman would even walk towards the Delta ticket counter and “find a vantage point where he could see but that was far enough away” from the counter and Delta employees (Nolan, 55). From this location, the Delta CEO would carefully study and watch as his employees checked passengers in and offered great customer service. Once he was “satisfied that all passengers had been accommodated would he approach the [ticket] agent and request a seat” (Nolan, 55).
Woolman’s behavior is the polar opposite of the “power play” exhibited by Allen and Mullen who would bump Delta passengers in first class (if the plane was full) to business class or coach just so they could fly in the first class seats.
There were even times when Woolman would be alerted by one his employees that they were undergoing financial or personal trouble. Woolman would hand-write a letter to them in response that would offer advice or even a loan from Woolman himself to the Delta employee in need. Of course, the loan would have to be paid back to Woolman once the employee got back on a good footing financially; however, the fact that Woolman went out of his way to look out for those Delta family members who had hit troubled times speaks volumes about the man and his ability to lead others.
With Allen and Mullin leading the charge, the CEOs would be the last individuals in the company that a Delta employee would go to in order to ask for a loan. In fact, with the company mired in great debt and Delta employees experiencing great financial cuts in salary and pension, Mullin went ahead and approved an “Executive Compensation” plan that guaranteed that his and the pension plans of 60+ management executives would remain untouched if Delta went bankrupt. So, how could Delta employees approach the CEO to ask for money when the CEO was taking money right from under them?
Fiascos like the “Executive Compensation” plan contributed to many heartaches for not only the airline, but its employees.
“At the same time employee pensions were being cut, the [Executive Compensation] proposal called for executive pensions being secured and increased. These executives were being given the opportunity to receive extra bonuses as well,” writes Nolan (129).
The Lessons I Learned From Delta’s Struggles
Clearly, Delta’s come a long way since the airline filed for Chapter 11 bankruptcy protection on September 14, 2005. What happened to the airline after bankruptcy is not covered by Nolan’s book since it was published in 2005 when the company and its leaders were acting in the most scandalous and asinine ways known to mankind. So, it will be interesting for me to find out more about the turnaround that Delta experienced from 2005 to 2015 that has made it one of the best airlines in the world (again).
But, one thing was made abundantly clear from the book: The leadership style of C.E. Woolman, which Nolan talks about at length, is one to be admired and learned from.
The leadership styles of Ron Allen and Leo Mullin? Not so much.
Nolan, Harry L. Airline without a Pilot: Lessons in Leadership. Atlanta, GA: Targetmark, 2005. Print.
This is the second post (out of 52 in total eventually) that is a part of my 2015 Book Reading Challenge.