WestJet head talks effective employee engagement: CEO SeriesApr 25, 2013
The spring series of CKNW 980’s “The Chief Executives” continued with Gregg Saretsky, President and CEO of Canadian airline WestJet, sharing his vision for employee engagement with CKNW host Bill Good in front of a live audience at the Segal Graduate School.
The event was part of an ongoing partnership between the Beedie School of Business and prominent Vancouver radio station CKNW News Talk 980 to bring leadership and business insights from some of Canada’s top executives to SFU’s downtown Vancouver campus.
With a packed and enthusiastic crowd watching, Saretsky opened by sharing his career path with Good, explaining how his father worked in the airline industry and that he had grown up taking advantage of his father’s airline privileges by travelling to a variety of places from a young age.
Having obtained an undergraduate degree in biochemistry and microbiology, Saretsky initially intended to pursue a career in medicine. Asked how he ended up changing his career path so drastically, he replied, “Sometimes you just wake up in the middle of the night and think that this just isn’t for me.” He went on to obtain an MBA, after which he ventured into banking, a career that he again eventually decided was not the right one.
Good then asked Saretsky if he had any advice for the numerous Beedie School of Business MBA students in the audience. “Pursue your passion – follow the things you are interested in and the right things will happen for you,” he replied. “Study hard and work hard. For every job you are interested in, there are at least two or three other candidates that want that job as well.”
Asked how WestJet has established itself as an industry leader, Saretsky revealed the key to WestJet’s strategy – employee ownership. He explained that their 9300 employees were all able to allocate up to 20% of their pay annually, which WestJet would then match in stock purchase in the company.
“We say that owners care, and I believe that to the depths of my heart,” he said. “When our employees care enough to look after our customers, our customers then return to purchase more tickets. This then results in the stock price going up, which makes our employees happy. If you take care of your people then the rest takes care of itself.”
To back up his claims about WestJet’s employee ownership and engagement being a successful model, Saretsky shared a statistic that indicated that the demand for positions at WestJet is so high that it is easier to get into Harvard than to obtain a job at the company.
With WestJet about to begin operation of their new subsidiary WestJet Encore, which will service smaller airports in more remote destinations, Saretsky shared the challenges in expanding the business while trying not to deviate from the current successful model.
He explained that the executive team traveled around the country to discuss the planned expansion with every WestJet employee, asking them to vote on whether to go ahead with it or not. He revealed that through this approach, they obtained a 91% support from their employees for the idea.
As WestJet currently only operates one type of aircraft, Good inquired about the challenge of bringing a second model into the fleet to operate under the Encore brand.
“It was not a decision we took lightly, we studied it for years before presenting to the board,” said Saretsky. “We knew our existing planes were too big for these smaller communities, but our model was built around only one plane type – our mechanics and pilots only need one training program. We opted to introduce a single fleet of Q400s which our people will become experts on, but we will also give them opportunities to move back and forth across both companies.”
WestJet’s aim is to become one of the top five airlines in the world by 2016. Saretsky explained that this target does not mean further expansion, but among the most profitable. With the airline industry having a notoriously low-profit margin, WestJet have set themselves a target of 12% return on investment capital, a target they exceeded last year. Saretsky did concede, however, that he could not rule out further expansion in the future. “I have learned in this business never to say never,” he said.
Asked about whether WestJet could every fly out of Bellingham, Saretsky expressed his frustration at the taxes imposed by the Canadian federal government that hinder the Canadian airline industry.
“If we were successful in getting some of the fees that are imposed on Canadian airlines repealed, then we could charge prices to encourage some of the five million Canadians who cross the border every year to take flights from US destinations to stay here,” he said. “Think about how many jobs that would create if even half of that number started in Canada. Someone has to take a leap of faith to make it happen.”
Throughout the interview, Saretsky fielded questions from the audience on a number of topics; touching upon the challenges of maintaining the strong organizational culture as the company expands; the turnaround time between flights; where he sees the company in five to ten years; the impact of technology on WestJet’s business; how WestJet maintains its strong return on investment capital; and the risk of complacency in business.
With Saretsky due to catch a flight to Calgary, Good closed the interview by asking him to sum up his view on leadership. “In one word, listening,” he responded. “Leaders do a good job of listening to their people but holding back the answers and encouraging their people to seek the answers for themselves.”
To see all the CEO interviews from the 2013 CKNW Chief Executives Series, visit https://beedie.sfu.ca/events/2013-cknw-ceo-series/