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Web-only Exclusives
November 30, 2000

From Our Correspondent: Hirohito and the War
A conversation with biographer Herbert Bix

From Our Correspondent: A Rough Road Ahead
Bad news for the Philippines - and some others

From Our Correspondent: Making Enemies
Indonesia needs friends. So why is it picking fights?

Asiaweek Time Asia Now Asiaweek story

OCTOBER 8, 1999 VOL. 25 NO. 40

M A N A G E R S   A T   W A R

LANCE GOKONGWEI, CEBU PACIFIC:
A plane crash early last year made him relieved he had his employees on-side

Edwin Tuyay for Asiaweek
Employees First
By ALEXANDRA A. SENO

In March we told the stories of people retrenched in the wake of the Crisis, in the INSIDE STORY "You're Fired" [March 12]. Now it is time to meet the men and women on the other side of the desk - those who placate creditors, convince reluctant owners about drastic steps and, yes, sometimes fire large numbers of people. The six individuals whose stories are told here had to learn new ways to manage as they faced down the Crisis or coped with other management challenges. There were days when they felt like going home and not returning. But they persevered. They and managers like them face a grueling task. The success of Asian restructuring depends on it.

Crisis comes in many forms. In Lance Gokongwei's case a plane crash brought a sudden halt to a winning streak. In February 1998, Cebu Pacific Flight 387 slammed into a mountainside, killing all 104 people aboard. At the time Gokongwei had been running the fledgling airline for just two years. But in that time he had brought to the company a decidedly un-Asian flavor that had helped make Cebu Pacific the highest-flying domestic carrier.

    MANAGERS AT WAR
Employees First Lance Gokongwei, Cebu Pacific

Gambling with the Truth Sanan Angubolkul, Srithai Superware

A Scion Ditches the Past Cho Jung Ho, Hanjin Securities

Daughter Knows Best Adrienne Ma, Joyce Boutique

When Creditors Scream Rini Suwandi, Astra International

Money, Money, Money Hayakawa Shigezo, Misumi Corp.

When Gokongwei's father, tycoon John, put him in charge, the then 31-year-old president and CEO quickly veered away from tradition, instituting the flat corporate structure and casual approach common to U.S. companies. At first, senior executives recruited from other airlines were shocked to discover that they had only one secretary - not the three they were used to, but Gokongwei was adamant that bureaucracy be kept to a minimum.

Next, he endeavored to build a firm in which employees had a personal stake. Gokongwei did the textbook things: profit-sharing, Hallowe'en costume contests, team-building workshops. Staff were encouraged to propose ideas to senior management directly. Once, two flight attendants approached Gokongwei about a routinely malfunctioning toilet; he got it fixed and began to focus more on passenger comfort. Another time employees suggested "fun flights" during which the cabin crew host games like "Do the Demo" - passengers now get prizes for doing the safety demonstration at the start of the flight. Aside from staff-generated ideas, Gokongwei regularly solicits suggestions from ticketing agents for promotions and special discounts.

His employees rewarded him with impressive work habits. Airlines generally require 20 people at an airport to sell tickets, handle check-in and load baggage among other ground tasks; at Cebu Pacific fewer than half that number do the job. The fledgling airline was filling nearly 90% of its seats (some 20% higher than the industry average) and flights were on time a world-beating 95% of the time.

Then came the plane crash. "Our world seemed to turn upside-down," says Gokongwei. Already emotionally drained from a family tragedy - a brother-in-law killed in a botched kidnap rescue - Gokongwei found himself facing the greatest challenge of his professional life. Though confident the airline had complied with safety standards, he couldn't ignore the fact that he was running the company involved in the nation's worst air disaster.

But the corporate culture he had built stood him well. His employees rallied. Close to half his 450 staff volunteered to be temporarily stationed in southern Cagayan de Oro, where the plane went down, to assist search-and-rescue and comfort victims' families. Employees spent cold nights on the mountain and long hours in morgues. Several dozen sent Gokongwei personal notes of encouragement and support. During the carrier's two-month suspension, hundreds took unpaid leave.

"While I deeply regret the loss of lives," says Gokongwei, "some good came from the experience. It strengthened my belief that my job is not just to run a company for myself but for everyone who contributes to it." Today the carrier has 10 aircraft making 62 flights a day and has a 26% share of the market, second only to flag carrier PAL. For the next fiscal year, the company is aiming for revenue to increase 76% to $75 million. As his upstart airline grows, Gokongwei, now 33, continues to focus on improving the working environment. He values the traditional lessons in fiscal prudence and conservatism that he learned from his father but he will continue to look for guidance to the very people he relies on most - his employees.

NEXT: Gambling with the Truth



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