Clive Beddoe squirms uncomfortably in his office chair.

The chief executive officer of WestJet is struggling to explain his role in spearheading one of the most phenomenal corporate success stories in Canadian history.

Larry MacDougal, Business Edge
CEO Clive Beddoe says partnership with employees is bedrock of operations

“You’re only as good as your people,” says Beddoe finally, modest as his airline.

Like the airline, Beddoe prides himself in a no-nonsense style and shies away from personal accolades (and, like the low-cal airline, there was no rubbery chicken to chew on, only beverages during a 30-minute interview).

The 56-year-old native of London, England, fancies plain talk, detests wasted words – he somehow managed to use the same five words to answer two separate questions - and employs few fancy adjectives, except when asked about rival Air Canada, in which case his hair stands on end.

His office has all the luxury and formality of a WestJet flight. No frills. It’s comfortable enough, but modest as the CEO, who in a black golf shirt could pass for one of the company mechanics (in fact, Beddoe is known to have changed a tire on one of his planes).

He’s the first big-time corporate CEO we know who has an Obus back support strapped to an outdated office chair that looks like a garage-sale special. Still, he’s sitting prettier than that other airline boss – Air Canada CEO Robert Milton.

1. What was your boyhood dream?

“It was to come to Canada (he immigrated in 1970). Canada always struck me as a big country with lots of opportunities and lots of open spaces. I was very much an outdoors person, or at least I was when I was younger. I tend to be much more desk-bound now.”

2. To what do you attribute your success in business?

“Above everything else, it’s people in the end. It’s getting talented people motivated to help you get to your goals. I think I just do what comes naturally. I’ve always believed in providing a reward mechanism (for employees), particularly for people who excel.”

3. What traits do you look for in employees?

“Enthusiasm. Energy. Commitment. Determination. Intellectual smarts. People skills.”

4. What was your response when WestJet senior vice-president Mark Hill, who worked with you in real estate, came to you in June 1994, to propose an airline venture?

“I said: ‘I think you’re crazy.’ But I’ve always liked people with enthusiasm, and he had a lot of enthusiasm for the idea. And it sort of took off from there. I became a convert and a believer when he wrote a business plan for me in concert with Tim Morgan and Don Bell (Hill, Morgan and Bell were the other WestJet founders). We believed that, with lower fares and more people flying, it could work.”

5. So why did you initially decide to tackle the WestJet challenge?

“By the time we started WestJet, or even dreamt of it, I’d already had some reasonable success in real estate and turning around other companies (through the Hanover Group of Companies, which Beddoe still owns). I’d made quite enough money, so I didn’t really do WestJet for the monetary reward. So it was really about the challenge of taking on two huge organizations like Air Canada and Canadian Airlines.”

6. When WestJet was launched, did you envision that the company could be so successful so quickly?

“Yeah, very much so. It went a little faster than we’d thought. We’ve grown at an average rate of 51 per cent per annum since we started, and this year we’ll grow by about 45 per cent. I would imagine that as time goes on, that growth will shrink in percentage terms by about five per cent per annum because the sheer numbers are getting so big. We’ve got potential to have 100 airplanes by 2010 (the current fleet is 28 planes).”

7. What has Air Canada, or that company’s difficulties, taught you about the airline business?

“Good customer service is the key to this business. I think people need to feel welcome and appreciated. People judge you more on how you handle bad situations than on how you handle good situations.”

8. How do you feel about Air Canada’s move into the discount carrier business, at which your company has excelled?

“Air Canada’s a high-cost airline trying to sell seats at a low fare, which means that they’re just going to lose more money. The more they grow that model, the more money they’ll lose.”

9. What’s your view of the way your floundering competitor does business?

“Their staff has limited latitude in the way in which they can deal with the public. So when the public gets angry at them for the failings of the corporation, the staff has no means of dealing with that. So the public then gets angrier and angrier with the employees when it’s not necessarily their fault. And the employees then, in turn, end up retaliating against the public. And that’s my read.”

10. Are you hopeful that your challenge of the Competition Act as it pertains to the airline industry will be successful?

“We’ll find out in due course. It’s before the Senate, and I will be testifying before the Senate shortly to reinforce my views. The Competition Act in Canada is hopelessly inadequate when it comes to dealing with a business like the airline business. It doesn’t work. It was designed for the manufacturing sector, because it deals with the concept of avoidable costs. It’s very hard to define avoidable costs in the airline sector.”

11. Have you made any headway with your company’s protest of the proposed $24 airline security charge to passengers in Canada?

“It’s going to be very interesting to see how well the public swallows that. Air Canada loves it. Air Canada thinks it’s wonderful. We think it’s excessive, particularly for low fares.”

“We think it’s wrong from the public’s perspective and should be a percentage of the fare. Unfortunately, the government isn’t interested in listening to industry. We support the idea of greater security, but we question whether the whole industry should pay for it. It’s an unfair burden to the industry and moreso a burden to the short-haul carriers. It may mean that we have to redirect our airplanes to fly longer-haul routes where the impact isn’t felt so much. And we could do that, although we’re not going to do it instantly.”

12. What’s the biggest mistake airlines are making that would explain the alarming rate of failure in the industry?

“Most airlines, I think, have failed to get their employees on side with them. What we’ve done is create a partnership between our employees and the company so that if we prosper, they prosper (in profit sharing). That largely hasn’t been done in the industry before. So most airlines have ended up with combative relationships between the airline and the employees.”

13. You’ve been back in the CEO’s chair for 18 months since the departure of Steve Smith. How long do you think you’ll remain in the corner office?

“I have no idea. I haven’t any plans to leave, I haven’t any plans to move, I haven’t any plans to replace myself. There’s no plan to do anything in particular. I don’t think about retirement. I enjoy achieving things too much.”

14. Who’s the business leader you most admire and respect?

“I don’t think there’s any one that I’d pick out because there are so many phenomenal stories. But I think what Herb Kelleher (chairman of Southwest Airlines, the airline after which WestJet was modelled) has done with Southwest was just outstanding.”

15. How do you deal with stress?

“What stress? I spend a lot of time with my children and make sure I spend quality time with my wife. It’s very easy to let this business invade your life completely because it’s 24 hours a day, 365 days a year. There are lots of capable people who run WestJet day to day. I don’t run the company on a day-to-day business. There’s a team of us that builds the strategic vision of the company.”

16. Reflecting on your business career, do you have any regrets?

“There are always things you’d do differently, but if you didn’t have the stumbles, you wouldn’t have learned so much. I believe everything you have to deal with is a learning process.”

17. What’s the greatest lesson you’ve learned in business?

“It’s learning to recognize your own strengths and weaknesses and attracting people around you who can augment your weaknesses.”

18. What’s your weakness?

“Lack of attention to detail.”

19. What’s your strength?

“Lack of attention to detail.”

20. What do you see in your life’s crystal ball?

“WestJet will become a much bigger corporation than it is today, and Air Canada will shrink as a result.”

IN PROFILE: Clive Beddoe

* Born/raised/age: London, England; 56.

* Title: President/CEO/chairman, WestJet.

* Education: Post-secondary (surveying), London University.

* Career: Prior to founding WestJet in 1995, Beddoe was involved in the real estate and manufacturing industries through the Calgary-based Hanover Group of Companies, of which he is the owner and founder. Beddoe is also a director of Rosetta Energy.

* Accolades: In 2000, Beddoe and WestJet’s other founders – Mark Hill, Donald Bell and Tim Morgan – were recognized as Canada’s Entrepreneurs of the Year.

* Passions: Flying (he has a private pilot’s licence), sailing, fly-fishing, hunting, golf, tennis.

THE COMPANY: WestJet Airlines

* Brass: Clive Beddoe, president/CEO/chairman; Donald Bell, senior vice-president, co-chief operating officer; Sandy Campbell, senior VP, chief financial officer; Tim Morgan, senior VP, co-COO; Mark Hill, VP, strategic planning.

* Profile: WestJet, founded in 1995, is a Canadian airline operating 28 aircraft with about 1,100 flights per week. It employs more than 2,400 people in the 23 cities it serves. Boeing recently confirmed an order from WestJet for two additional 737-700 planes, bringing WestJet’s firm order for aircraft to 28. In 2000, WestJet was the second most profitable airline in North America, second only to Southwest Airlines, after which the WestJet model was patterned.

* Stats: Out of 1,664 complaints to Canadian airline ombudsman Bruce Hood in 2001, WestJet had only five, according to the Report of Air Travel Complaints. * Recent Stock Price (WJA-TSE): $28.55 (year range, $12.50-$29.70).

* Website: www.westjet.com

* Head Office: 5055 11th St. N.E., Calgary, AB T2E 8N4.

* Phone/Fax: 403-444-2600, 403-444-2301.