A Transparent Leader In Uncertain Times

The weeks that followed the tragedies of September 11 were frantic for Andavo employees. The airlines were canceling most flights, and because the airlines’ telephone lines were jammed, Andavo became their “mouthpiece,” fielding client questions about the location of their executives and how to get them home. Andavo offered full refunds, including all fees that are normally nonrefundable, and did not charge for ticket refunds. “It seemed the right thing to do,” Rivers said. Yet doing so would cost Rivers dearly.

At the end of a 2-week blur was what Rivers now refers to as “the moment in the kitchen.” In the employee break room, Andavo’s controller informed Rivers that there was more money going out the door than coming in. At the current rate, Andavo would have to close its doors by the end of the year. “The future flashed in front of me,” Rivers recalled. “If we were losing that much money, the obvious solution was massive layoffs. But there was a voice inside me saying there had to be another way.” After a lot of thought and consideration, Rivers decided how to go forward.

She Was Overwhelmingly Honest

A week after the conversation with her controller in the kitchen, Rivers shared the bleak financial picture with all her employees. Most were gathered in Andavo’s conference room, and others were listening via a telephone conference. Rivers told them that in order to survive even for the next couple of months, more than a third of them would need to be laid off. Yet, she added, she really did not want to see that happen. The only other way, Rivers explained, was to creep along with deep cuts in expenses.

She Asked for Their Feedback

“Help me make this decision,” Rivers told Andavo employees. While employees huddled in groups and began looking at cash flow, Rivers left for the airport, headed for the San Francisco office. When she landed in California, she checked her voice mail and received a message from her employees: They wanted to stay, and to do so, they would take a 10 percent pay cut, slash expenses, and work like hell. While Andavo employees took these kinds of measures in trying to make things work, Rivers would not lay off anyone. Her promise would be a hard one to keep.

She Remained Composed

Over the weeks that followed, Rivers kept a calm presence, setting the pace and keeping everyone focused on the plan. “She’s a very real person. She shows that she understands what people are going through, and she shows her emotions, but she does so in a calm way that doesn’t get everyone panicked,” one employee said.

She Let Her Guard Down

Sometimes during the crisis period, at the end of a torturously long day, Rivers would reveal her humanness to her direct reports, particularly her chief accounting officer (CAO) and her chief operations officer (COO), Sharolyn Clark. Clark vividly remembers one evening when Rivers came into her office and slumped down on the couch. “Suddenly this very attractive woman with the most beautiful skin in the world looked like she had aged 20 years in one day. It shocked me to see her like that.” Rivers shared that she had not been sleeping at nights and said that there were days when she was physically ill and did not know whether she would make it through. “When I got home that night, I practically shook,” Clark said. “I realized this wasn’t a big corporation with huge, deep pockets like the one I’d come from. This was a person’s livelihood.” Clark always felt that she had “treated the money like it was important,” but after that conversation with Rivers, Clark became a “bulldog” about going after companies that owed Andavo money.

She Kept Her Promise

Even with severe belt tightening, the expectation of a new piece of business a few months down the road, and a fully committed workforce, financial ends were not meeting, and cash was drying up. In November—almost 2 months after the terrorist attacks—Andavo could not meet its payroll. Tapping into a bank line of credit was not an option; when Andavo’s credit line had come up for renewal in September, the bank backed out, saying that the travel industry was no longer viable. Determined to keep her promise to Andavo employees, Rivers funded the business with several hundred thousand dollars from her personal assets, borrowing from her retirement fund, and taking second mortgages on real estate investments.

She Delivered Bad News

Meanwhile, the California office was feeling neglected. While Rivers spent one full week a month at their office, the 20-person team wanted more; they wanted a full-time person to manage them. At first, Rivers had to tell them that a manager’s salary simply was not in the budget and that they would have to manage as a team for a while. When it became clear that that approach was not working, Rivers hired a manager. Six months later, Rivers had to deliver more bad news. The new manager was not doing the job and had to be terminated.

She Admitted Her Mistakes

“It would have been easy to just say she was a bad manager, but she wasn’t,” Rivers told the group the next morning. “I made a hiring mistake.” Calling it an “error in judgment,” Rivers said that she was sorry but that she could not afford to hire another manager. She encouraged the group to work out their differences and try the team approach again. “You guys can make this work. I know you can.”

She Avoided Destructive Comments

The different branches and divisions within Andavo all suffered losses during the first quarter after 9/11, but some— depending on their business mix (in this industry, the ratio of leisure versus business travelers)—suffered far deeper losses than others. In fact, some divisions of Andavo were “ carrying” others for a while. To have revealed this information to all Andavo employees in her regular quarterly report, Rivers said, would have been irresponsible. Such “finger pointing” might have stirred animosity and “us-versus-them” attitudes instead of Andavo’s usual team orientation. In her report, Rivers did not break out financials into the different divisions but shared information about the company as a whole.

She Showed That She Valued Others

Fast forward to the first anniversary of September 11. Rivers asked Andavo employees to gather in the conference room, and they all stood in a circle and held hands during a moment of silence. Rivers thanked them for pulling together during the past year and reminded them how much they had to be proud of. Andavo employees had been encouraged to feel proud all year long; even though the budget was unusually tight, Rivers had continued to show appreciation. Instead of a holiday party at a fancy restaurant, the team gathered at an Andavo executive’s home for a simple meal and an exchange of “white elephant” gifts (something one has but is willing to give away). Every employee also received a personalized, handwritten note from Rivers, thanking each for his or her individual and unique contribution to Andavo’s success.

Indeed, Andavo had weathered the storm and came out with 25 percent revenue growth, not one lost customer, and no layoffs. Workers in the San Francisco office pulled together and, after several months, told Rivers that they would not need a manager after all. And with Andavo back on track, Rivers even had her nest egg back.