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Saturday, April 19, 2014

Departures follow leadership change at Cessna

By Molly McMillin
The Wichita Eagle

Cessna Aircraft has undergone numerous leadership changes since the company brought in former General Electric executive Scott Ernest to head the company in late May, following Jack Pelton’s departure.

Tim White, senior vice president of sales in the Americas, and his wife, Dianne White, vice president of corporate communications, left the company last week, the latest in a series of management departures over the past several months, which has included six vice presidents.

In many cases, a new leader means a “significant change in the thrust of the organization,” said Jim Wolff, professor of management at Wichita State University. “If that change does not fit either the individuals that are in the positions or their perspective on what they can contribute, then there’s a kind of a mismatch, and that can lead to departures.”

When managers leave after a new leader arrives, it can be for a variety of reasons, said Gerald Graham, the R.P. Clinton Distinguished Professor of Management at WSU, who added that he does not have specific insight into the cases at Cessna.

In general, sometimes they leave because they disagree with the new leader’s direction; they may leave because they’ve been asked to, or they may leave because they wanted the position for themselves,

“A CEO should have the freedom of being able to move players around, add players or leave players because that leadership team is very instrumental in determining whether that leader will be successful,” Graham said.

In the past few months, Cessna has seen the departure of Mark Paolucci, senior vice president of sales; Trevor Esling, senior vice president of international sales for Europe, the Middle East and Africa; Bob Stangarone, vice president of corporate communications; Stan Younger, vice president of Cessna’s service facilities; Mick Hoveleskin, vice president of contracts; and Bill Collier, vice president of Cessna’s parts division. There have been other management changes as well.

Cessna declined to comment on the departures.

Turnover in a company’s management can be positive and negative.

“You lose a lot of history and tradition when you have several people go,” Graham said. “Of course, that cuts both ways. There might have been a problem with the recent history and tradition, and that’s why the people chose to or needed to go.

“On the other side, there may be some insights and some connections that you need, but they’re only in those people’s heads. So when you lose the people, you lose all that.”

A changed environment

The business environment for general aviation has changed dramatically since the recession, which led to order cancellations and a steep drop in new orders.

In the downturn, Cessna cut its employment levels in half to match lower demand.

“I would say a lot of culture walked out the door with all those layoffs and others departing,” Wolff said. “It kind of gives management an opportunity to create a different culture.

“Whether that’s a good thing or a bad thing remains to be seen, depending on how the business plays out, and where they go from here and what they do with it.”

From his observation, Cessna is sales-oriented right now, said Doug Hensler, dean of WSU’s W. Frank Barton School of Business.

“I understand that’s what Mr. Ernest is doing – aligning the organization to get sales back,” he said. “There are some things that are out of their control. … There are some things that they can control.”

Hensler said he’s sure Ernest is making strategic and tactical decisions for the long-term survivability of the company.

Moving forward

Pelton, who left Cessna in May, joined the company in 2000 as senior vice president of product engineering. He became president and CEO in 2003 and chairman in 2005. Pelton, a pilot, has been an advocate for all sectors of the general aviation industry.

He was an “aircraft guy, and he knew the aircraft industry,” Wolff said. “Pelton did some pretty good things for Cessna during his stay there.”

Ernest, whose degrees are in engineering, came to Cessna after 29 years at GE Aviation, a provider of jet engines, components and integrated systems for commercial and military aircraft.

Textron hired him because it wanted someone who understood the aviation industry, its regulatory environment and its challenges, Scott Donnelly, Textron’s chairman and CEO, said at the time.

The change of leadership was “more of an issue of where the business is today," Donnelly said then, and taking “a new look at the business in terms of how we move forward."

Someone with different ideas, tools and skill sets can be beneficial, Wolff said, “rather than be insular and ‘This is the way we’ve done it; this is the way aircraft is.’ Sometimes that works well; sometimes that doesn’t work well.”

Time will tell whether the change made sense.

“The proof is in the pudding,” Graham said. “Ask me three years from now, and I could tell you very confidently whether it was a good move or not.”

Contact Molly McMillin at 316-269-6708 or mmcmillin@wichitaeagle.com

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