Towards the corporate culture of “Purpose First”: Case of Ed Bastian

On May 2, 2016, Ed Bastian assumed as CEO of Delta Airlines and took command of a company that nine years ago managed to get out of Chapter 11 of the Bankruptcy Law of the United States supported by an international expansion strategy through the acquisition of equity interests in companies, the layout of new routes and firms of alliances and cooperation agreements.

However, the covid-19 pandemic, and the consequent blow to global economies, once again gave a sample of how fragile moments of calm can be and 2020 faced the aviation industry to its worst crisis. At the end of March of that year, Delta was losing $ 100 million a day. In the months that followed, the company flew low-passenger jets and second-quarter operating income fell nearly 90% from the previous year. By the end of the year, Delta reported a net loss of nearly $ 12.4 billion, the worst in 96 years of history.

Far from being discouraged, Bastian based his leadership on people. Guided by skills such as empathy and an attitude of service, he focused on the well-being of his employees, without neglecting the business, actions that had characterized his leadership for years.

After the airline went bankrupt in 2005, the executive defended a plan to reward employees, whose salary had been reduced, with an annual share of 15% of the company’s profits. In February 2020, shortly before the start of the pandemic, Delta paid its 90,000 employees a record $ 1.6 billion and presented a plane with the names of each of its employees printed inside the plane along with the word “Thank you”.

These are some of the reasons why, according to the executive, “when it came time to ask them to sacrifice, they understood.” With the COVID-19 crisis, about 45% of the airline’s workforce volunteered to take unpaid leave to help the airline preserve liquidity, while more than 15,000 employees opted for retire early. Unlike its competitors, Delta did not lay off any employeehighlighted an article published in the Financial Times.

However, in the framework of this crisis, Bastian showed the importance he attaches to people and redoubled his efforts to carry out actions that promote the diversity and environmental, social and corporate governance. In this sense, it announced plans to double the participation of African-American collaborators by 2025 and announced its commitment to invest 1,000 million dollars to become the first carbon-neutral airline globally.

The main asset, even in a crisis

In July 2021, Bastian was named among top 10 CEOs in the Glassdoor Employee’s Choice Awards for the Top CEOs of 2021, which highlights leaders who stood out for supporting their teams during the difficult days of the pandemic. With an approval rating of 97%, Bastian was 24% above the average approval rate for CEOs, according to the 1.5 million employers surveyed on the site.

“Throughout the pandemic, Ed has been adamant about putting people ahead of profit and ensuring that safety and well-being be at the forefront of any and all decisions that are made, “shared Joanne Smith, Vice President and CEO of Delta Personnel.

It is that, as the executive pointed out in an interview with The New York Times, in times of crisis, “you must make sure that your employees know that they are the best asset that the company has. When you’re going through tough times, employees may feel like they are a number, a cost, a means to an end. But no, they are the end in themselves ”.

“We talk so much about our values ​​that people know what to do in times of crisis. Values ​​are not something that is put on a shelf or an exercise that is done once or twice a year, but they are lived every day. ability to respond as quickly as we have is because we know who we are and the values in which we believe, “Bastian said in a talk given at the Goizueta Business School of Emory University, within the framework of the Impact program.

For Bastian, during the crisis unleashed by the pandemic, it was key to maintain communication and transparency with his collaborators, putting the health, safety and well-being of people first, including the availability of tests and vaccines against covid- 19. Because Delta’s number one, in short, managed to do a task that is not at all easy: connect with the purpose to get the best of himself and transfer this culture to the entire corporation. Purpose first as a motto and as a genuine way of acting at all times.

The alignment of purposes

Now what is a purposeful enterprise? The concept of results with purpose reflects an idea that receives greater attention in times of uncertainty and crisis: organizations must not only aim to achieve profitability, but also have to be responsible for the consequences and the global impact of their activities, engaging in actions socially responsible that have a positive impact on the environment.

“The movement that affirms the importance of companies having a purpose is a reaction to the imbalance that arises from the identification of the company’s reason for being with the maximization of the benefits of its shareholders. Corporate social responsibility, the stakeholder model and the notion of sustainability are part of this trend towards the search for a new balance ”, shared Koldo Echebarría, CEO of ESADE Business & Law School in an article published in Harvard Deusto.

In this sense, Koldo exemplified: “When Henry Ford I wanted every American to have a car Ikea bet on bringing design to every home and Zara made the goal of democratizing fashion their own, they were expressing a purpose that goes beyond a range of products, a positioning against competitors or a business model ”.

It is that, according to the specialist, the purpose makes a social need its own, which may not even be expressly formulated yet. But also, the purpose concept behind it is a desire for social impact. “The idea of ​​purpose is here to stay and represents another step in the recovery of the company as a social institution,” said Koldo.

For Franz Heukamp, ​​General Director of IESE Business School, the purpose of a company must meet a set of requirements:

  • Be an ambitious and relevant goal for the area in which the company operates
  • Be known and shared by all stakeholders, especially employees
  • Reflect on the goals of all members of the organization and remind yourself frequently
  • Establish indicators and continuously and obsessively measure your progress.

It is that, as Bastian understands, the role of a CEO changed. Today, more than ever, a CEO must support and accompany your collaborators, beyond taking care of financial results. “My schedule is based on our people, who occupy a large part of my time. One of the most important things, if not the most important thing that I do, is to spend quality time with our people, not only at the managerial level, but with our front-line staff, “Delta CEO, who primarily connects with purpose, shared with a group of Georgia Institute of Technology students.

Connect the personal purpose with that of the organization will be key if companies want employees to deliver their full commitment, and manage to find the synchrony between their talents, financial results and the positive impact on the planet. Companies that understand this premise will be able to attract, develop and retain the best talent in times of crisis and growth. It is a conscious decision that leaders must make and act accordingly, and as Ed Bastian has shown us, a smart and profitable decision.



Reference-www.eleconomista.com.mx

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