Don Carty is on trial. Not so much for what he has done, but for what he’s trying to do. And at stake is the future — both his own and his company’s.
Carty could have easily avoided this trial. All he had to do in May upon succeeding the legendary Robert Crandall as chief executive of Fort Worth-based AMR Corp. and American Airlines, was, well, nothing. He just had to maintain the status quo.
The company was on a roll. It had record profits and record revenues. American was the world’s second-largest airline after Elk Grove Township-based United Airlines, the most profitable by a wide margin and a market dominator. There was relative labor peace. Travelers were practically fighting for the right to buy tickets. And ticket prices were some of the highest since deregulation 20 years ago.
By virtually every measure, one could fairly say that there had never been a better time in American’s history. All Carty had to do, it seemed, was figure out a way not to mess things up.
And, for the most part, that’s what Carty is doing. His American, like Crandall’s, still relies on its marketing and technological prowess to stay one step ahead of the competition. And it still relies on its strong balance sheet to finance innovations and its steady global expansion.
But the 52-year-old, Canadian-born Carty is trying something new, too — something that’s never been done at American.
He’s trying to change the way the company’s 120,000 employees feel about their company. He wants the American of the not-too-distant future to be not only a great airline, but also a great airline to work for.
“American’s people have always had great pride in the company, at least when talking to others outside the company. That’s a legacy from the days of Mr. C.R.,” Carty says, referring to C.R. Smith, American’s paternalistic founder, who served as chief executive for 35 years. “But it’s really more than that. This company has always had that sense of `eliteness.’ “
Unfortunately, Carty says, that sense of being part of an elite, trail-blazing, standard-setting company has rarely been translated into the kind of “love” for the company that employees of industry maverick Southwest Airlines, for example, seem to have for their company.
And that is management’s fault, he says.
“Even though most of our people are very proud to be a part of this very well-known, well-respected company, some, maybe even most, of our people have just never had a sense that this was a great place to work because they never felt that management cared about them,” he says.
So Carty is trying to change that, to make American — and AMR — a company that its people can love because it is a company that cares about and responds to their needs. To that end, he has spent much of his first seven months as CEO preaching to workers and managers alike about the importance of building not only professional skills and competencies, but also the enthusiasm and the love and respect for each other that he believes has been missing within American.
Few within the company appear to doubt Carty’s sincerity. But in the minds of some, he still has to overcome his long association with Crandall, whose success was always shadowed by the deep dislike many employees had for him.
“Personally, I believe Don Carty is sincere,” says Rich LaVoy, president of the 9,000-member Allied Pilots Association at American. “He is changing the tone of conversations. We have cordial, civil conversations. Nobody is screaming at each other. On that level, the relationship is good and getting better.
“I think most everybody involved with him from our organization likes the guy personally. But they also know that he was never more than an arm’s length away from every decision ever made up there before. So they’re waiting to see if he’ll really do what he says.”
Bob Bies, associate professor of management and an expert on organizational behavior at Georgetown University, says it can take two to five years before the kind of changes Carty is trying to make are noticed. And that’s if the effort is successful — something that is far from guaranteed.
“It takes more than just the CEO saying it,” Bies says. “Everybody who is key from a leadership standpoint, whether it’s formal or informal, has to walk the walk, not just talk the talk. They all have to be singing from the same hymnal page, or there’ll be no credibility, no trust.”
Carty says he already sees a glimmer of change in employees’ attitudes. He cites as evidence December’s rejection by the airline’s 14,000 airport and reservations agents of the Communications Workers of America’s effort to unionize them.
“We have been working diligently to create a culture of cooperation and enthusiasm among all employees,” Carty says. “I believe the result of this election is a message from our passenger service agents that we are moving in the right direction.”
Yet, Carty says he knows it will take more than talk to make permanent changes to the culture of a company as large, as diverse and as spread out as American.
