To managers at People Express, each precept appears to reveal more amplified verities. For example, Burr will point to the first two precepts and explain that they can guide managers through the puckerbrush of daily affairs: "If it's good for a customer or good for a peer, the choice you want to make in any of the myriad decisions you're faced with each day is probably a good idea. Collectively, the precepts are meant to reveal the very soul of People Express.
The best method he has yet found to translate the precepts into action is by organizing all of the managers into teams of two or three members and by cross-utiliza- tion. Everyone in the company, including the managing officers, are members of a team. This design is thought to foster self-management and a highly productive esprit de corps while at the same time eliminating additional layers of supervisory control. Teams also participate in the decision- and policymaking of the company by electing members to advisory and coordinating councils, which meet with Burr, the managing officers, and the general managers.
Cross-utilization is also considered a vital method of honing the company's competitive edge and an indispensable source of heightened productivity. Every month, a variable portion of each manager's time is devoted to some line function generally outside of his or her primary area of staff responsibility. Thus, Candee Brock, a team manager in accounting, gets to check in baggage, and Bob McAdoo, the managing officer for finance, is frequently seen serving drinks aboard a flight. Hackman, the company's consultant on organizational behavior, sees cross-utilization as a "trade-off." He says it requires more time and money in training, and that even then there are problems in maintaining operational continuity because people are moving into areas in which they are not yet fully expert. "On the other hand," he says, "you get people who really understand the business because they're not penned into a particular function."
If People Express's operating results don't prove the success of the people structure, there are two additional facts that may help. First of all, People Express has no unions. The Air Line Pilots Association International tried twice and failed. There was no interest. "Unions have a place in American business," Hap Pareti says, "but that place exists only where their role is important to protect the employees against actions of an employer who doesn't have the employees' interest in mind. To the extent you structure an organization that literally spends the majority, if not the total, amount of its time dedicated to workingowith its people, you don't need a union." Jack Blake, 33, a former Navy pilot who joined People Express two years ago, says that although he could probably double his $36,000 base salary at another airline, he intends to stay put. "I'm happy where I am," he says. "I've got stock and security. Last year I made captain. With the seniority systems at other airlines, I might never have gotten the chance." Finally, there is the plain fact that during the first quarter of 1983, passenger miles per employee was twice that of the industry average for full year 1982.
But Burr still isn't satisfied. He says the company's people structure is only "60% successful," and points to problems in getting managers involved in the company's decision- and policymaking processes. "It's horribly difficult to give everyone a sense of commitment and participation," he says. "It's an inch-by-inch, every day grinding process. There's no magic, no wands." The organization report prepared in 1982 had already identified several areas that needed improvement, including "meaningful staff work with built-in feedback, clarity about authority and constraints, built-in accountability, individual recognition, and available leadership." The report traced many of the problems to the "small number of designated leaders at People Express" It said. "This leadership element can no longer adequately address the requirements . . . for an entity of nearly 1,000 managers." The subsequent introduction of the team-manager concept to expand the company's leadership is fairly typical of the continuous evolution at work within the people structure. Jim Miller, team manager for management development, says that there are now 85 team managers and that the concept has "worked out very well."
As real as these problems may be, they are difficult to spot from any vantage point outside the company. Once the PATCO crisis had passed, People Express settled into its now familiar pattern of meteoric growth -- buying more planes, hauling ever more passengers, and generally living up to its reputation as a bona fide business phenomenon.
Gerry Gitner, one of the founders and, at the time, president of the company, resigned early in 1982 to become executive vice-president for finance at Pan American World Airways Inc. According to Burr, Gitner "just never got comfortable with the basic direction of the company." "He did not believe," Burr says, "in the strength, the direction of the precepts. He was much more oriented toward routes and planes and tell people what to do, don't get in there and discuss it with them. The competitive business strategy that I doped out, which relies on enabling the individual to do well, he just couldn't get comfortable with. He didn't believe it. He said it was a pipe dream I was disappointed when he left I felt like I had lost a guy that I had tried hard to convince and I didn't make it with him."
