McAdoo says the company chose south Florida on the chance that it was the one destination that, with its leisure-time attraction, might prove especially sensitive to price. "At $59," he says, "we thought it was cheap enough that people might take trips out of the clear blue saying, 'Why shouldn't I go to Florida?' or 'Why shouldn't I go twice instead of once, like I usually do?"
Once again, People Express bet right. People did ask those questions and they did fly. The sunshine and warm waters of south Florida were too much to pass up in the winter of 1981-82. The planes started out 60% full but quickly built up to a load factor of 85% on many of the routes. And out of it, the company squeezed enough money to stay alive. As flight restrictions were lifted, People Express gradually returned to its original blueprint.
To Burr, building an enterprise is building the people within it. In his view, the people are the enterprise Most companies, he argues, organize themselves around structures and policies that force employees to serve the company. The traditional, corporate pyramid of authority, for example, with its ascending layers of supervisory control, smothers individual initiative. Many companies contain the unspoken prejudice that employees are unreliable or, as Burr puts it, "guilty until proven innocent." Nor does this attitude go unnoticed by the employee. In time, it spawns indifference, disaffection, even belligerence. Better, Burr reasoned as far back as the dream-time days in Houston, that a company be organized to serve each employee individually by giving ownership, direct participation in its affairs, the freedom to fashion a personal contribution, and an opportunity for personal growth. People Express is an experiment to that end, an attempt to create an environment in which the usual distinctions between the company and the employee are no longer relevant, because the two have become one.
In addition to ownership, the most conspicuous features of the People Express "environment" include a relatively "flat" management configuration, the use of teams, self-management, and cross-utilization. According to Richard Hackman, a professor of organizational behavior and psychology at Yale University and a consaltant to People Express, the company is traveling in uncharted territory: "Other firms have done parts of what they're doing, but the complete package is unique. They're trying to invent a new way of organizing and managing the human resources of the firm."
Work at People Express is first separated into four "umbrella" categories: people, finance and administration, marketing, and operations, and then into 13 specific functions, as opposed to the "staff" functions, such as accounting, administration, and scheduling necessary to run the company. Although everyone at People Express is a "manager," there are distinct gradations in authority and leadership. Six managing officers provide general direction and leadership in each functional area. Team managers, a more recent addition to the People Express lineup, serve as liaisons between the teams working in any given area and the managing officers and general managers. Customer-service managers, flight managers, and maintenance managers are expected to manage themselves by setting their own goals in keeping with the company's professed objective. The buck stops at Burr.
People Express has not tried to eliminate supervisory intervention but rather to minimize it. Further, Burr says, they have redefined it. Effective managers, he says, offer direction and make sure that the right information and tools are available to get a job done. They do not dictate methods nor do they police efforts. Actual performance is a matter of individual creativity. Burr points out, however, that People Express is not built on anarchy. The direction of the company is not up for grabs. "If you don't agree with that direction," he says, "you shouldn't be here."
Although it had existed in the collective mind of the start-up team, People Express's direction wasn't written down until December 1981. Eight months after the first flights, Burr convened a meeting of the team in the former VIP Lounge just off the main concourse in the North Terminal. He was concerned that the company's objectives might be lost among the daily distractions of a rapidly growing business. The meeting was recalled by everyone involved as a day of intense, argumentative debate. Burr asked each member in turn for his or her idea of what People Express was trying to accomplish. He wrote the answers on large sheets of paper and taped them to the walls. "They worked hard," he says. "I mean they put their blood on those walls." The team emerged with a list of six "precepts" that dedicated the company to "service, growth, and development of people"; becoming the "best provider of air transportation"; the "highest quality of management", becoming a "role model"; "simplicity"; and the "maximization of profits."
