Glenn F. Tilton

Chairman, President and CEO, United Airlines

Thank you, Dean Jain, for that kind introduction; and thanks to the Class of 2003 for the honor of joining you, your friends and family in celebrating this important milestone in your lives.  I’d especially like to thank your classmates, Barry Grant and Ryan O’Toole, the rest of the selection committee, and the entire student body for choosing me as your speaker. 

In a few minutes, I’m going to talk to you about taking risks: but it’s clear that in choosing the CEO of a company in the airline industry – with our unique set of challenges – you already know something about that.

United Airlines travels all over the world.  That’s what we do.  But Chicago is our home, which makes this occasion all the more meaningful for me.  And, in the last few months, the Kellogg School has developed even closer ties to our airline.  It’s no mystery to us why Kellogg is the number one business school in the country.

As many of you know, I recently asked Dean Jain to join our board, which I am happy to say he has done.  Given our company’s challenges, that decision carried some risk.

But the Dean didn’t hesitate, and I know that he will play an instrumental role in rebuilding our company, bringing his marketing expertise and the ingenuity of the Kellogg classroom to every board meeting.

And with all these ties to United, I expect to see you aboard as you begin your globe-trotting careers.

Thirty years ago, I was debating a career decision between the private and the public sector.  It was a tough choice, and, in making it, I reached out to a family friend.  At the time, he was the director of Pan American Airline’s Latin American division.  He offered me a bit of advice that came back to me when I was considering the United job, and I’d like to share it with you: 

No matter what you do, he said, never, ever work for an airline. 

I honored his advice for thirty years – and then I finally had to let it go.

In a few moments, you will officially rejoin the working world – and I think it’s more than fair to say that it’s a markedly different place than it was when you began your journey at Kellogg on September 11, 2001, a day etched in all of our memories.  Today, the economy is weak.  Unemployment is at a nine-year high.  And the days of the dot-com boom are definitely over.  Combine this with the threat of terrorism, and you are entering one of the most uncertain futures in recent memory. 

Let’s face it:  job prospects for graduating MBAs are not what they used to be. 

Yet, I think in the long run these tough times will serve you well. 

With the skills you’ve gained here at Kellogg, and the drive that you possess, you have one of those rare opportunities in life to test yourselves against real adversity.  For that reason alone, this class will have an edge over those who sat in your seats just a few years ago. 

Why do I say that?  Because a challenging environment is a good thing.  Success can come easily in boom times.  In tough times, you have to earn it.    When you emerge from tough times, you’ll have a sense of appreciation, not a sense of entitlement.  And you will have learned more for the experience.  That will make all the difference down the road.

As in life, a business career – whether at a United or a Texaco – is full of ups and downs.  The ultimate roller coaster ride.  Hang on, and you’ll love the ride.

When I joined United, the company and the airline industry were in a tailspin.  United had lost 23,000 jobs in the wake of nine eleven, and we were in significant financial distress.   

It didn’t make us feel much better that we weren’t alone.  Between last year’s losses and this year’s forecast, the airline industry will have lost more than  $24 billion in just three years.  Over time, the airline business has under-performed the Dow Jones Industrial Average and nearly every single sector, including commodities such as grain and steel, by more than 50 percent.

Add in Code Orange security alerts, the Iraqi war, SARS, higher fuel prices and security costs, and – as we say – these are not ideal flying conditions.  In fact, the Air Transport Association called it the “Perfect Economic Storm.”

The day I joined United, Jay Leno referred to me as the “fellow with the worst job in corporate America.”  Not exactly the description one might hope for.   However, my children didn’t feel the same way.  They called me and, with tremendous pride, told me that I had now finally arrived.

More recently – months after my Leno debut – I woke up to a Holman Jenkins column in The Wall Street Journal, with a headline declaring that the solution for the airline industry was, and I quote, to “Kill United.”

Headlines like that are not helpful for employee motivation and morale.

So why take such a job?  To be honest, I didn’t overanalyze the decision.  I saw a challenge … a rare opportunity … and the need for good, hard work to be done.

With commitment and effort from the people of United – from the flight attendants … to the board of directors … to the baggage handlers – I can say proudly that United is beginning to break clear of the clouds.  Productivity and on-time performance are up.  Costs and customer complaints are down.  And our departure from bankruptcy is, day by day, growing closer.

United’s future success depends on our staying focused on the long-term -- not giving it up for short-term gains. 

I like Jay Leno, but he got this one wrong:  I’ve got one of the best jobs in corporate America. 

Commencement speakers are always expected to impart some morsels of wisdom.  Frankly, I don’t have the answer to your success – any more than anyone else does. 

The secret of success is that there is no secret of success.   You are each going to find your own answer in your own way. 

Still, that having been said, there are some life lessons – professional and personal – that I think are universal. 

So, if you’ll bear with me, I’d like to share a few. 

First and foremost:  always fly United. 

Having imparted that morsel of wisdom, when I reflect on my career, three values stand out in my mind.

First, take risks. 

As I said earlier, Kellogg has empowered you with unmatched business expertise.  But even more important, and unique to this institution, you have received a well-rounded education – one that stresses not only skills but values – values such as teamwork and community.  I urge you to use that education – all of it. 

Be confident, be open-minded and willing to try new adventures.  Seize the opportunities that are right for you, and be thoughtful in your decisions.  But never fear the unknown or the possibility of failure. 

Before arriving at United, as Texaco’s chairman, we were integrating Texaco and Chevron into a new, $90 billion energy company.  This was no easy task: each company had its own long history and distinctive culture.

And it’s a hard fact that more mergers fail than succeed.  Such things are never a safe bet.  But I believed that with hard work, we could make it happen.

The same could be said of my time at Dynegy, a company on the verge of a merger with Enron … only to be swept up in the post-Enron collapse of the energy trading sector.

And now I’m at United. 

Talk about a roller coaster ride. 

But that’s okay.  The object is to lead an interesting and fulfilling life, in all one’s endeavors.  Always doing the sure thing won’t get you there.  Teddy Roosevelt said it best: “The credit belongs to the man who is actually in the arena.”

So take risks – get in the arena.

Second, be open – be honest.

I have found that in business relationships there is no greater equity than in candor -- in presenting  the true facts – whether it’s good news or bad news.  Laying out those facts gives people a stake in the situation -- it draws them in, and makes them part of the process of reaching a solution. 

You can’t build the trust you need to create change without open and honest interaction. 

I have found that to always be the case.  Whether it was the –

Historic diversity controversy at Texaco, …

The collapse of the energy trading business and the crisis at Dynegy …

Integrating Chevron and Texaco …

Or working through the financial, labor, and management complexities at United.

It’s one thing to make tough decisions – it’s another to hold yourself accountable for the way they’re carried out.  Everyone’s got to take responsibility for his or her part.  At United, that means the mechanics on the tarmac … the managers at headquarters … and the pilots in the cockpit … all of us.

Of course, accountability must also flow from the boardroom.  Especially in the post-Enron era, honesty and transparency have to be the rule, not the exception.

Third, be humble. 

Graduating into this economy is humbling enough.  You are all getting a pretty good taste of it.  But as you start or re-start your careers, you will be encountering people from all walks of life, all levels across the corporation.  Humility starts with listening to everybody, but it doesn’t end there.  Humility also means learning from everybody – not just because it’s the right thing to do, which it is, but because it’s the smart thing to do. 

You might just get a lot more out of a conversation with a mechanic than from reading another consultant’s analysis.  I still read every e-mail that United’s employees send me, no matter who they are or what their job is. 

And I know that I am wiser and better for it.  In the end, it’s about being as comfortable in the lunch room as you are in the boardroom.

In a different way, your Kellogg Corps program encourages a similar learning philosophy.  It brings Kellogg students and your management expertise to developing countries around the world.  As you surely know, the Corps benefits you as much as it does them.  It gives you a dose of humility and reality that will help you become more successful managers and better human beings.

This brings me to my final – and most important – point.  Enjoy life.  While we should always do serious work, we should never take ourselves too seriously.  At every stage of my life, I’ve taken a step back and made sure that I’m satisfied with what I’m doing.  I can still remember that first job with Texaco, driving a 1965 Chevy from station to station.  I couldn’t have been happier, and I felt as successful then as I do today.

I’m confident that with the skills you have gained here, the relationships you have built, and the values you have strengthened, you, too, will find the success that you seek.

Congratulations again, and best of luck in all your endeavors.

Take off your caps, roll up your sleeves, and get in the arena.

And remember, fly United.