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The Moment explores the pivotal moments that changed the lives and careers of the world’s leading CEOs and defined their leadership journeys.
Claire Blake (00:04):
From World 50, this is The Moment where we explore the pivotal moments that change the lives and careers of the world's leading CEOs and defined their leadership journeys. Today we're talking to Gil West, CEO of Hertz and board director at Virgin Galactic.
Gil West (00:22):
We turned what was candidly an operation that was on the verge of being shut down to the point that it was turned around, was a competency. It gave us a competitive advantage.
Claire Blake (00:33):
Gil West was met with chaos on his first day at Northwest Airlines. The executive who hired him? Fired. Facility in uproar. His first assignment? Remove the person whose job he was taking. Many would've walked away, but Gil chose to lean in. Gil and his handpicked team, some of whom he still works with today, transformed an operation on the verge of shutdown into a success story that would eventually land him a key role in Northwest's merger with Delta Air Lines. Hear the story of his pivotal first day at Northwest, how the experience hooked him on the challenge of turnarounds and why after all these years he still chooses the hard jobs over the straightforward ones. All right, Gil. Gil West, amazing to have this conversation with you, thrilled for what we're going to unpack. I have a few fun questions for us to kick off with. The first of which, Cohiba Cigars or Riptide Brewing's Grumpy Blonde Ale?
Gil West (01:29):
Oh, well, I love cigars as you know, but I'd have to go with Riptide Grumpy Blonde. My wife owns a brewery called Riptide, Naples, Florida. And one of her beers she did it's turnabout's favorite play in this deal because she named a beer after me, which is called Geezer Pleaser. So in turn, the team named a beer after her, which is called Grumpy Blonde. So it's one of my favorites. Yeah, I didn't have anything to do with it, but I do drink it occasionally.
Claire Blake (02:02):
Oh, that is a riot. Well, congrats on 10-year anniversary of Riptide to Kim.
Gil West (02:06):
Thank you.
Claire Blake (02:07):
Planes, trains, automobiles, or spaceships. Which one is our favorite?
Gil West (02:13):
Oh, wow. Tough question. I love them all. Played with all of them in different forms. I'm a gearhead at heart. I grew up in my dad's auto parts store. Love planes, flown, involved in spaceships, did some stuff in trains, but I'm just a gearhead.
Claire Blake (02:30):
But cars at the end of the day, I love that.
Gil West (02:32):
Cars. Yeah.
Claire Blake (02:33):
I want to start with just the fact that you got in the airline industry in the mid 80s with your first job at Boeing in Seattle. We're going to talk about your transition from United to Northwest, but I first wanted to reflect for a moment on what it was like to fly in the 80s and 90s. Such a different world, does it carry a certain nostalgia for you?
Gil West (02:52):
Yeah. So for me, certainly commercially, the first commercial flight I ever took was when I was interviewing for jobs coming out of college. But to me, the vision I have is actually when I was at United Airlines. First time I flew internationally, literally caviar, first class. It was such a different level. The best Bordeaux wines. I mean, it was a completely different ballgame back then. And if it was business, okay, you could go that way. We flew standby as an airline employee, so it was a bit of a crapshoot even if you got on the aircraft. But if you could, it was incredible. Now, having said that, a standby flying to Hawaii, you literally had to wear a suit.
Claire Blake (03:39):
I was just thinking that about what everybody dressed like. That's crazy.
Gil West (03:43):
So we were the only people in suits were the employees.
Claire Blake (03:48):
That's hilarious. You did develop a love for transportation at a young age. We were just talking about your dad's auto shop in Hayesville, North Carolina. You're a self-proclaimed gearhead. You've already said it. For those of us who can't even change a flat, primarily Claire Blake, how does a love of cars transcend to planes and spaceships? What is it about transportation for you?
Gil West (04:07):
Yeah. And part of this is just lucky really. As I was coming out of school, mechanical engineering, Boeing made me an offer. So I always loved planes. I flew as a kid. I was fortunate. Friend had a plane, so I got to fly. So I kind of looked at aviation as a cut above automotive in terms of engineering. So that was my first real professional job was at Boeing as an engineer. I did aerospace, Southern California, and eventually came to the airlines because what I realized was engineering's fun, it's good, but you don't really own it after it's gone. I'm more of an operator. I don't know why, but the airlines just always appealed to me because you have the technology, but you also have the ability to operate it and travel. And there's a whole nother ... There's multiple dimensions to an airline that a Boeing or GE Aerospace doesn't have.
(05:03):
You don't really have the customer or the operation.
Claire Blake (05:06):
I love that. Well, if we zoom forward a little bit from your entry-level role at Boeing, you then start working at United Airlines and Northwest comes calling with an opportunity in Atlanta. So I mean, in this podcast, we're unpacking the seminal moments of CEOs lives and careers that truly made them who they are as individuals and leaders. And for you, my understanding is this moment when Northwest Airlines called you and offered you a job is that moment. However, it wasn't the job. It's really that ,unbeknownst to you, so much changed between when you accepted the job and you actually started. So paint a picture of what that first day was actually like.
Gil West (05:41):
Sure. First of all, I mean, you never know what you're getting into until you get into it. I mean, there's always some level of surprises. For me, the person that hired me, the senior vice president of what was called technical operations at Northwest Maintenance and Engineering, by the time I accepted to the job to the time I started, they had let that person go. And they brought in someone else to run the company. And then as I got there, I realized this is a real hot mess I've stepped into. And they didn't even know I was coming. And then it's like, well, why are you here? And well, okay, here's what you hired me for. This was in Minneapolis where my first day was because the senior VP of TechOps was there. So as they talked to me about it, then it's like, well, they hired me to go run Atlanta as a base.
(06:34):
Okay. Well, go down there. Here's the person that's there and said, "Go fire them and take over." Do they even know I'm coming? No, no idea. So I mean, at that point, I'm like, "What have I gotten myself into?" So it was a tough setup, tough setup.
Claire Blake (06:54):
So you go from Minneapolis to Atlanta. What happened when you walk into the facility in Atlanta?
Gil West (07:01):
So I walk in, of course, they don't know why I'm coming in. They have no idea why.
Claire Blake (07:04):
Right. You're introducing yourself like, "Hi, I'm..." Exactly.
Gil West (07:08):
Yeah, exactly. So I asked for this person that was running this. So they came out and I said, "Look, this is awkward for both of us, but hey, I've been hired. I'm here to replace you. I know nobody's talked to you, but I'm sorry, but today's your last day." And I mean, I literally had to exit the person I'm coming in to replace. They had no idea about the situation. They were candidly good sports about it. And to his credit, it's like, somehow I'm not surprised. This is just the way it works here. So if all these, of course, are different signals coming in and you're trying to process the situation. But as you kind of leave a great career at a good company, you move into another situation. Again, you never know the situation, but then it's like, boy, what have I done? I mean, my goodness.
Claire Blake (08:03):
Right, right. So I want to get into that a little bit because I've had the pleasure of knowing you for many years. And I've also known many who worked around you for many years. And I think we all know you as the king of turnarounds, whether or not you would put the crown on your head. I will say it for you. But this was the beginning of your first. And I think you're young in your career, you've actually never seen anything this extreme yet. And my understanding from you is the timeline was pretty brutal. It was, fix it or we shut it down.
Gil West (08:29):
That was exactly how they presented it. Yeah. And again, this was another, this new leader that was in running it all. And yeah, it was basically fix it or shut it down. And I mean, the real situation was ... So a little bit of context, this was the shop that overhauled aircraft engines for the narrow body fleet of aircraft at Northwest Airlines, right? And we effectively had the whole fleet grounded because the shop couldn't produce engines effectively. So it was a real mess. The time it takes to repair an engine, the cycle time was about 110 days, which was far, far too long. Quality was poor. The cost was outrageous. Literally, there were fire marshals policing because of all the inventory in the shop. There were a crisis day one almost of the FBI parachuted into the facility. There were machine guns being made in the machine shop by employees.
(09:30):
It was just a hot mess. As a relatively young leader, never seen anything like that.
Claire Blake (09:37):
That is absolutely wild on so many levels. I guess it helps when you level set it also is extremely shocking, but where do you even start?
Gil West (09:48):
Yeah. Well, I mean, for me, I've just got to try to get my bearings first of all, kind of understand the situation, but then maybe it's just the engineer in me. I'm just naturally looking for what are the metrics we're trying to manage to, right? What are the key metrics? And so, okay, where are we? What are the trends? Then it's kind of a natural approach to .... the drivers out for those, understand what we can do about them. So daily reviews of the metrics and the performance, walking the shop every day, then pulling up a bit monthly, et cetera. But then there are a couple of other big things, the team, right? You walk in there and you're like, "Holy smokes, the talent to take it from here to where we need to go, I need some help." And I did. And that's where, I don't know, right or wrong, I leaned on folks at United that I'd worked with that I had a lot of confidence in.
(10:45):
And they were crazy enough to come on board and join me in this thing.
Claire Blake (10:49):
Well, I was just about to say, what's the phone call? Because you weren't privy to information when you took the job. Obviously, I think the team super critical and I think any of us would agree on that, but how did you pitch it to them? How did you convince them? What did you tell them?
Gil West (11:02):
Yeah. And I mean, these are special people and I've worked with them for decades now, but these are folks that they love challenges. They were young in their careers, they could take risk and they just wanted to go in and have an impact. And they were people I'd worked with. So the team, the kind of what I would call teamwork, the mutual respect, the esprit de corps was there. And I think it was one of those things where they had confidence that as a team, we could go in and make a big difference.
Claire Blake (11:36):
This team has gone on with you to revitalize 10 plus businesses some 20 or so odd years later, you still have a lot of them with you there at Hertz. How did you get that so right? What were you looking for when selecting these people? I mean walk me through a little bit more of that.
Gil West (11:52):
Yeah, no, it's a great question. I've got to come back to the leadership, who I reported to as well, because there were some changes there that were really instrumental. In my mind, these are folks that were great leaders, servant leaders, team players. Again, I'll reflect back to Good to Great. Level five leaders is defined in that book. I think these are people that face brutal facts, so could understand the situation, not overreact, but try to figure out what is the path forward here. They love the grind. That's half the battle. And if you're, I think in the type of roles that World 50 leaders are, you got to love the grind, embrace it. So those management operating systems, the ability to use them, but the discipline to do it every day and the work ethic to be kind of the first ones in and the last ones out, it's not easy.
Claire Blake (12:48):
Yeah, for sure. So I mean, you've got the right team in place. What comes next? I'm understanding you deployed a little bit of a drain the swamp strategy. So tell me what that means and how your various stakeholders reacted.
Gil West (13:02):
Yeah. So on a process basis, there's a book that changed my life called Theory Constraints. And so it's about any operations at all you can apply to concepts, but in large part, it's understanding what the ... thinking at a system level instead of a kind of siloed or local level is the fundamental process here. And if you think of a system level, it's about what is the constraint of the overall system. And then you identify that and then there's a process how you manage the system around those things. So in our case, it was within the production flow of an engine overhaul. It was well into the process, the constraint, but our tendency was to keep inducting engines and keep flooding the overall system with inventory to the point that it couldn't produce anything. So in this process, you find the constraint, you subordinate everything to it.
(14:00):
So we had to shut the doors, bringing engines in. And it was ... I couldn't tell you the reactions of the workforce. It freaked everybody out. They literally thought we were shutting down the shop and said, no, here's the deal. We're going to drain the swamp. Anything in the process has to move quick. And if you don't have anything to do, that's okay. And that was a complete paradigm shift to the way we were operating, but almost every operation. To illustrate the point, when we first shut down the shop and the first thing you do is disassemble engines, they had no work. I said, "Let's go out and smoke cigars then." And it was like, you've lost your mind, truly. But it emphasized that, I mean, we were serious about what we were talking about and people and it spread like wildfire. And then as we produced and then as areas in the shop started to dry up, it was okay.
(14:56):
But what the effect though was that suddenly things were being produced at a throughput and a speed that were unbelievable because all the cycle time generally is what I would call queue time. It's just waiting for something to happen and you eliminate queue time and suddenly inventory starts moving and it's really powerful. And that was the ultimate effect of the shop and the turnaround here.
Claire Blake (15:20):
That's wild. I mean, so one piece of this is the end result in numbers. I mean, you went from 110 days to overall an engine to how many? Six days.
Gil West (15:30):
Six days.
Claire Blake (15:30):
That's wild.
Gil West (15:31):
I mean, we got to the point where we had so much capacity. We'd made everything that we owned serviceable, so the fleet was running fine. We were able to leverage that on cost, but then we created capacity that we were able to sell to other airlines. So we started bringing in other customer work, which of course created profit for us and did different things. So I mean, we turned what was candidly an operation that was on the verge of being shut down and it probably should have been shut down a long time ago to the point that it was turned around, was a competency, it gave us a competitive advantage, it brought in additional revenue. And then the employee morale, of course, swung to the opposite end. It was unbelievable the effect of that. And to this day, I mean, I still keep in touch with many of the frontline employees there. It's amazing.
Claire Blake (16:25):
You know where I'm going next, which is going to talk about a couple of things you swear you would never do.
Gil West (16:29):
Yeah.
Claire Blake (16:31):
Yeah. I do want to ask, I'll have a two-part question on this. Sure. I do want to ask one, I mean, you've spent your career at this point on, and you fast forward for a couple more decades, walking into burning buildings professionally, taking on other jobs that people wouldn't touch, what is it about these kind of high-risk turnaround situations that keep pulling you back in?
Gil West (16:51):
Man, I wish I knew. I guess I'm a glutton for punishment, but I just love the ... I don't know. I love the challenge. And I think from that very first turnaround at Northwest, just the ability to go in and figure out, all right, what is the system? And as a team, figure out what do we need to do to improve it? And then it's addictive because you start to see the needles move. It's like, I don't know, I played sports growing up. So to me, it's the same thing. It's a team, you're playing the sport, you're fixing things, and then you get to a point where candidly, you're just competing against yourself. And I mean, you surpass the competition in the marketplace, and then you're up in your game relative to your last performance take. And it becomes addictive. To me, it's like a drug.
(17:40):
I don't know how to describe it. And it's not for everybody. I get it, but it's so much fun though. It's just, I don't know of a better sport or more complex thing in the world than businesses. And so it's so fun.
Claire Blake (17:53):
Totally. Totally. And I mean, obviously I was going to ask why you can't retire because it's at least four times, I think, from my count. But I do want to talk about something different with that though, because much of your career, you rode shotgun as then COO of Delta and Cruise. You're frankly one of the best operators of our time. I know in the way that you're kind of briefly high level sharing your playbook, if I'm being really honest, you've been pretty vocal at times with me about not wanting to be CEO, yet I'm talking to you right now as the CEO of Hertz. What was it about this opportunity that drew you back in?
Gil West (18:26):
I was drawn to Hertz because one, it's an iconic company. And it was first time I ever had a gold membership to anything was at Hertz when I was probably 22 years old. And so I always loved the company. I always loved the roots of racing and things like that, that Hertz was involved in. A hundred year old plus company. So to me, it's been iconic. When the owners reached out to me as the opportunity, it's clear it's a turnaround situation, which again, somehow lights my fire. And the combination of that, coming back home to cars is a part of my career. It was something I couldn't say no to. The parallels relative to kind of what we did at Delta under Richard and then later Ed's leadership, I think it parallels the track at Hertz as well, which is so much fun. So that helps recruit the team. We've been through this movie before. Here's an application, same thing ... in cars.
Claire Blake (19:33):
Well, I think it's, I mean, I love you bringing back to the fact, yes, that again, this is the same team and many of the same people who've worked with you for multiple turnarounds. There's an interesting piece here of who else you brought in to be part of your quote unquote team. They may not be your direct reports, but maybe some advisors. We have a mutual friend in Frank Blake, former CEO of Home Depot was board chair at Delta when you were there as COO. Now, also someone who told me he would never go back to is now on your board. I know that you've learned a lot from Frank. What does it say about how you thought about the people you needed to surround yourself in differently this time or maybe in addition to bringing in a team with you?
Gil West (20:11):
Exactly. Yeah. Well, no, thanks for the question. Love Frank. He's been a mentor for years and when he was on the board at Delta, I got to know him well. So fortunate enough to convince him to join our board. And I think in that respect, he's so wise relative to the enterprise and all the things that relate to having a successful public company that candidly, I didn't have that type of experience. I mean, as well as, of course, Richard Anderson still being a mentor and many others, by the way, that I could use as sounding boards along the way. And it's just really powerful for me to have that group. Now, I would also say World 50 in general is that way because the forum is so ... that's where you can learn from each other. You can benchmark, you can use sounding boards.
(21:04):
So candidly, as an old alum, I've used the same approach throughout my career now since then. And these are relationships that either through working relationships or forums like World 50, I would've never had.
Claire Blake (21:19):
I love that. On the outside your career looks like one successful turnaround after another. Is that how it felt for you on the inside?
Gil West (21:27):
No, there's wins and losses here, and every day it's that way. I mean, I just think you've got to be resilient. You got to be open to learning your lessons and facing brutal facts. And if anything, it just feels like, gosh, there's more failure and opportunities that you deal with. It's just the nature of it. And then probably folks that have worked with me for decades would tell me one of my continued development areas is just recognizing the wins and smelling the roses along the way because you're just wired to take the next hill. And it's hard. And I would hope over the years I've done a better job at that, but I just think it's the nature of how turnarounds are wired and continuous improvement is. You're thinking there's always a better way and you're obsessed with finding it. So it doesn't feel that way. I mean, the wins are kind of like, okay, that's great.
(22:20):
That happened behind us. Now, what are we going to do tomorrow is the real idea.
Claire Blake (22:25):
Gil, you've turned around airline operations, rental car giants. You've worked with the same core team across a decade of multiple companies. But most importantly, you started this journey as a basketball captain at Brevard College, learning about teamwork. How much of who you are in the boardroom today was shaped by who you were on the court? Got to ask.
Gil West (22:43):
Oh my goodness. Oh my goodness. Well, honestly, I think everything you learn, you learn early in life and you build from it. So the ability to play as a team and in competitive sports or business is everything.
Claire Blake (22:56):
I love that.
Gil West (22:57):
Because it's not about you, it's about the team ultimately.
Claire Blake (22:59):
Always. And here's what I'm going to say, because you're not one to stop and recognize the wins. And for yourself, like I said, I'll put the crown on you as the king of turnarounds even if you won't. I'm going to give you your roses, Gil, because I've had the opportunity to talk to people who've worked with you over the years, and it's just remarkable. And it's a lot about who you are as a person, and in addition to being an incredible process, continuous improvement operations guru. So your parents done good, as they might say, in North Carolina early on and set you on the right track. But thank you for sharing. Thank you for what you've meant to so many of us at World 50, because I think that you're truly one in a million. This was awesome.
Gil West (23:41):
Thanks, Claire, for the kind words. Thanks for having me on.
Claire Blake (23:47):
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