Jones Journal -- Alumni Magazine of the Jones Graduate School of Management, Rice University

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Deanna Sheaffer, Editor
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Happy, Passionate Employees Key to Good Business, Says Continental, El Paso Execs
– By Saul Keeton, Class of 2002

Gordon Bethune, Chairman and CEO, Continental Airlines

Marc Shapiro, Vice Chairman, J.P.Morgan Chase

Ralph Eads, President, El Paso Corp. Merchant Energy Group

Marc Shapiro, vice chairman of finance, risk management, and administration for J.P. Morgan Chase, kicked off the Spring Dean’s Lecture Series on January 22, 2001. Shapiro presented a six-item list of principles and lessons that he has learned over the course of his career with J.P. Morgan Chase.

First, he spoke of the importance of diversification in investments, be it among numerous companies, industries, geographies, or currencies. Secondly, he focused on the necessity of independent credit risk decisions and his desire for transparent transactions. Alignment, or compensating people according to their economic value added contribution, is a crucial element of organizational success according to Shapiro. Additionally, he talked about the role of active management and stress testing conditions outside the confidence interval.

On March 5, Gordon Bethune, chairman and CEO of Continental Airlines, spoke about his experiences in leading the turnaround at his company. When Bethune, a U.S. Navy veteran, took his position at Continental, the company had labor problems, poor customer service, and financial stability issues. His number one priority in piloting the reversal of fortune at Continental was helping his employees find happiness at work. His “people first” initiatives included monthly $100 bonuses, payable upon the company achieving predefined industry standards, and periodic Ford Explorer giveaways for individual outstanding performance.
Bethune, a licensed pilot, stated, “To be successful, a company has to openly appreciate its employees and et them know they belong. The airline industry is tough and competitive, and I knew that we weren’t going to turn around the company on our own. That’s why it had to be important to the employees of Continental first.”

Ralph Eads was the final speaker of the year. On April 11, Eads, president of El Paso Corporation’s Merchant Energy Group addressed the challenges El Paso has faced in sustaining its superior performance of the past decade.

The centerpiece of Eads’ discussion was describing El Paso’s way of thinking, called “Real Options Theory.” The company systematically approaches market analysis and risk management by viewing business decisions as a series of options and values them before making a decision. This way of doing business gives El Paso its competitive advantage and provides unique insights into strategy and value.

Like Bethune before him, Eads also discussed the importance of creating a cause of passion among his company’s employees. Eads said, “For the employees of El Paso Corporation, their careers are bigger than simply going to work and collecting a pay check. It’s part of their life.”