A Spirit-ed Debate

We've all heard and seen the headlines, "Spirit to charge $45 for carry-on luggage!" Lots of strum and drang. Some congressmen even want to "protect" us with new regulations. Wait a minute...what's going on?

Let's step back for a minute and take a more objective look at Ben Baldanza and his Spirit Airlines. (Let me make it clear. I'm NOT defending his decisions, just describing a few facts.) When Baldanza took over the South Florida based airline, he had a vision. He wanted to make Spirit and its home airport (Ft. Lauderdale/ Hollywood, FL) international. He had noticed the demographic shifts of people from various parts of Latin America moving north from the Miami area to the Ft. Lauderdale area. As he reasoned, "Why should they have to go all the way to Miami to fly back home?"

It's that sort of questioning that has marked Baldanza's thinking throughout his long career in the the airline business. He also made another important decision when he became CEO at Spirit. He realized that there were two basic models for an airline. At one end was Singapore Air with it's superb service, high-end amenities, and reputation for pampering everyone. At the other end of the spectrum was Ryan Air, a no-frills airline in the extreme. It competes on low fares with an a la carte system where you pay for everything you want.

Baldanza says that the problem with most airlines is that they try to live somewhere in the middle but don't deliver either great service or very low prices. So he decided to remold Spirit in the Ryan image. You get a fairly low fare (sometimes even a $9 special) and then pay for everything else...everything. OK. You know that going in so it's no surprise. As most airlines tried to survive the economic difficulties over the last few years, they also started adding on charges for basics (or what used to be considered basics) although not lowering their fares particularly.

So it comes as no surprise that Spirit will start charging for carry-ons that must go in the overhead bins with the fee based on whether you belong to a special membership or when and where you check in. The $45 is only for people who show up at the gate without paying for the bag ahead of time. Baldanza believes that this is all fair (no pun intended) because you only pay for the services you want. He thinks it will get some folks to check those bags and relieve the congestion getting on and off the plane. (We'll see...we'll also see if people will pay it or choose to fly another carrier. Ryan Air was forced to back off its plan to charge for use of the bathroom on short flights.)

But is Baldanza to be vilified? Not in my opinion. He made a business decision in line with his business model. The customers will determine if it's a good one or not. But there's more to Baldanza than this one decision. I had the privilege of getting to know him and profile him in my book on strategic leadership, Conventional Wisdom: How Today's Leaders Plan, Perform, and Progress Like the Founding Fathers. The picture above is a classic Ben Baldanza moment. Just like his planes, his offices are no frills also -- a non-descript industrial building in an office park...no marble entrance hall, just a buzzer and no receptionist...no outrageous perks...just a plain utilitarian office. Why the vacuum cleaner? Because Baldanza uses it to keep his office tidy himself.

He meets with employees regularly, getting their ideas and feedback, gives out his email address and replies, and is generally considered an excellent leader and manager. As his assistant remarked out of the blue one day as I sat waiting for a meeting, "He's the best boss I've ever had!" Even the interviewer on a recent CNN interview spontaneously remarked that Baldanza seemed like a very likable guy he'd like to work for.

It's important to separate out the disagreement with Baldanza's business decision and understanding his business strategy and his track record as a good leader, visionary, and a "nice guy." If you don't like the extra charges, don't fly those airlines that have them.

Oh, and no matter which airline you fly, could I plead with you (as a minimalist, frequent business traveler) not to drag on all of your worldly possessions, overstuffed giant suitcases, and shopping bags crammed with stuff?

***** ***** *****

Rebecca Staton-Reinstein, President, Advantage Leadership, Inc. www.AdvantageLeadership.com Looking forward to your comments. And check out more about Baldanza in Conventional Wisdom.

April 1 is not a foolish day

April 1 is an important day in American history, although few people know it. This is the anniversary of the first day the new Congress under the new Constitution met, had a quorum, and could conduct business. April 1, 1790. No foolin'...James Madison and the other delegates assembled to begin the business of putting the newly ratified Constitution into action. They began the business of ensuring the fragile union survived and grew strong.

This was no easy task. This was a new form of republican government. The delegates were serving two year terms in the newly established House of Representatives. They knew they would have some real power to get things done and to levy the necessary taxes to meet their obligations. Under the now-defunct Articles of Confederation, they were only able to beg the states to support initiatives with money. Now they represented specific geographical constituencies and each had a vote unlike the one vote per state under the Articles.

The crisis that brought on the Constitutional Convention and resulted in the new government was still raging; foreclosures, inflation, threatening foreign powers, creditors demanding payment for war debt, and more. The situation was not unlike today, although the country was more vulnerable than now.

As usual, James Madison had made a thorough study of the issues. He had the responsibility for seeing that George Washington's agenda made it through the new legislature. To gain ratification of the new Constitution, he had promised to bring a bill of rights into the amendment process. He would also have to see to it that the proposal for funding the debt and establishing a national bank would pass even though he had grave doubts about it. However, Alexander Hamilton, the new Secretary of the Treasury had convinced him it was a necessity to deal with their disastrous financial and credit situation.

Today's leaders face many of the same crises as the those in that first Congress. In fact the parallels are startling. They also face tough, even unpleasant choices. Several of the contemporary leaders profiled in my new book spoke at a seminar for local business people on March 27. They agreed with the premise that now is the time to focus on opportunity while doing what is necessary to get through the short term.

Greg Swienton, CEO of Ryder System, repeated his philosophy from his profile in the book. He has charged his team with looking for every alternative saving before letting an employee go. That means getting rid of things that make their lives more convenient or comfortable but do not actually contribute anything. He had already led the way by getting rid of the corporate jet when he became CEO.

Ben Baldanza, CEO of Spirit Airlines, was also on the panel and interviewed in the book. In a piece about him in the New York Times on Monday, the reporter was incredulous at his plain office in a nondescript office park. Baldanza was photographed with his own vacuum cleaner he uses to keep his office clean. But this is exactly the leadership image he is trying to set.

The key for all of the leaders on the panel is to focus on important isses with strong, decisive actions that are congruent with their larger mission.

So, no foolin'...take these leadership lessons to heart on this historic day.
(c) Rebecca Staton-Reinstein

Read more about these modern leaders and those of the early republic today -- Conventional Wisdom: How Today's Leaders Plan, Perform, and Progress Like the Founding Fathers http://www.conventionalwisdomcenter.com/

The full panel included: Greg Swienton, CEO, Ryder System; Ben Baldanza, CEO, Spirit Airlines; John Stunson, City Manager, Oakland Park, Florida; George Hanbury, COO/EVP Nova Southeastern University; Evan Rees, former President, CNL Bank, now working full time to raise money for the Boy Scouts and the Partnership for the Homeless.

The panel presentation will be available soon on our website. http://www.advantageleadership.com/