Clive Beddoe says he graduated from the school of hard knocks, having created a scrappy new airline and built it into Canada's second carrier. Now, the 64-year-old co-founder and chairman of WestJet Airlines Ltd. is taking his hard-won experience to a more conventional school, as a resident fellow in management at University of Calgary's Haskayne School of Business. His message to students will be characteristically candid - that the world is a more difficult, constrained place than when he started WestJet, and that you can succeed in business without being the boss.
When does an entrepreneur know it's time to pass the torch to a professional manager?
It was very clear to me when that would happen. I set myself a target to build WestJet to $2-billion in revenue [reached in fiscal 2007, when he retired as CEO] I figured that going from nothing to $2-billion would resonate quite well.
And your ability to innovate and see things creatively diminishes after a while. You're in a been-there, done-that mode and if you look at yourself fairly self-critically, you should know when that happens. ... I didn't find it tough at all.
But you're not really detached now, are you?
I'm still chairman, but I don't have any desire whatsoever to be back in there running it all. I was talking to a head hunter the other day and he said, "You know, you are a project guy." My project was to get it going, build it, make it have some real value - to create something that would bring as inexpensive travel as we could to Canada. ... I've done a number of different things in my life and this was only one of them.
What excites you now?
I spent the last two years doing an awful lot of sailing. I sailed across the Atlantic. I find different things that challenge me and I'm not sure what the next one is going to be. I don't think it has to be necessarily a working thing.
The airline industry seems to be in a partnership mode, with Air Canada getting close to United Continental and WestJet's alliance with American Airlines. Is that the era we're into?
The airline industry, for the last 20 to 30 years, has been a pretty abysmal business. It has seen too many players, too much capacity and everyone's scrambling for their piece of the pie. It reaches a point, particularly in recessionary cycles, where you do see consolidation occurring and that can take a number of different forms.
I said many years ago that this is what [WestJet]would have to do. You reach a certain size where it becomes a bit of a chicken-and-egg problem. You need more frequency [of flights]but the domestic market isn't big enough … to support more frequency. So you need the external stimulus of connectivity to other airlines. That allows you economically to build the frequency that you need, and to gradually grow market share and continue to expand your position.
Do alliances mean a different style of management?
Not really. It's still traffic. When we started flying from outside of Canada and into the Caribbean and Mexico, people said, "You're now an international carrier." In terms of the complexity of flying into Mexico versus Kelowna, there's not much more to it. At the end of the day you're still a carrier.
But now the connectivity with other airlines becomes more complex, and that's why we need a reservation system to be able to do that.
When WestJet was switching to the Sabre reservation system, passengers experienced long delays.
It was just really badly done and not something we were proud of. It was appalling, quite frankly - a great shame and we felt terrible about it. But it's one of those dreadful things that once you start, you can't stop. Once the realization was there that there'd been a mistake made, in terms of the preparedness, it was too late and we had to fight through it as best we could.
What's the big lesson you'll give these business students?
It's not given for everybody to be an entrepreneur, but that doesn't mean you can't succeed in business. There are very successful people who are part of an organization, but they don't have to be the No. 1 guy. Even as a professional manager, you don't have to be necessarily the CEO to be successful. You shouldn't condemn yourself because you can't get necessarily to that point.
You can have a great career without being the boss?
Absolutely, and if making money is what you want to do, then look at Bill Gates's partner, Paul Allen - he's made enormous amounts of money. ... And if you really want to an entrepreneur, you don't have to walk away from your university course, rush out, hang up your shingle and try to start something.
I didn't. When I first started on my own, it was after I'd been employed by a real estate developer in Calgary for a number of years and been employed in London for a number of years. Then I gradually built some experience and knowledge and some cash and some insights as to what it took.
So be patient?
Be patient and bide your time and make sure you know what it is you're doing and want to do. The other thing is be passionate about whatever it is that you do. You have to have a lot of passion.
What business would you start now if you had the chance?
I don't really know the answer. I think the world is in a very difficult space and we have an excess of an awful lot of things. ... It's hard to see what we've got shortages of, or whether something is grossly overvalued or over-priced.
Isn't it sad for a would-be entrepreneur to look out and say, "There's nothing?"
That's not necessarily the case. There's always opportunity. I'm not out there delving and finding, looking and scratching. There are young entrepreneurs that are, and they are finding opportunity.
But your idea in starting WestJet was not original, was it?
God, no. The model that had been pioneered by Southwest Airlines was replicated many times, but not successfully in the United States ... We were fortunate to get into an environment where there was one other competitor who wasn't quite as efficient or as popular as they might like to have been.
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