How CEO Ed Bastian Is Transforming DEI at Delta Air Lines
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In December 2020, Delta Airlines CEO Ed Bastian and his leadership team were deciding whether or not to commit to recruiting, hiring, training, and advancing one million Black Americans into stable, well-paid jobs over the next decade as part of the 110 Coalition.

In this episode, Harvard Business School professor Linda Hill explains how Bastian shifted Delta's talent architecture to prioritize skills over four-year degrees and how he created new apprenticeship programs to recruit entry-level employees. You'll also learn why he focused on developing frontline employees for internal promotions instead of recruiting new talent externally. This episode originally aired on Cold Call in November 2023. Here it is.

While campaigning for president in 1928, Herbert Hoover told Americans that they had to choose between rugged individualism or state socialism, a sentiment that he rode all the way to the White House. Thirty-five years later, the Reverend Martin Luther King Jr. observed that "it is cruel to say to a bootless man that he ought to lift himself up by his own bootstraps."

King was well on to the notion that there could never be social justice without economic justice. But 60 years hence, black workers are concentrated in lower wage jobs, underrepresented in higher paying occupations, and paid less than white workers in the same occupations, especially in managerial roles. At the current pace, it could take 95 years to close what some estimate to be a $220 billion annual wage gap.

What a golden opportunity for firms that are willing to tap into existing talent in new ways. Today on Cold Call, we've invited Professor Linda Hill to discuss her case titled 110 at Delta Airlines, Catalyzing Family-Sustaining Careers for Black Talent. I'm your host, Brian Kenney, and you're listening to Cold Call on the HBR Podcast Network.

Linda Hill's research focuses on leadership development, building agile, innovative organizations, and implementing global strategies. And she is a first-timer on Cold Call. Linda, thank you for joining me today. What a pleasure to be here. It's a great case. I think that people are talking so much in business circles about DEI these days, but clearly it's a subject that has been around for decades and longer.

and one that needs to be addressed in a whole multitude of different ways. So I thank you for writing it and thank you for coming to talk about it. Why don't we just dig right in by asking you what the central issue is in the case and what your cold call is to start the discussion in class. The central issue in the case is how do you build an inclusive culture and organization and make sure that everyone has equal access to opportunity. And the cold call is really about how much progress has Delta made in embedding a culture of diversity, equity, and inclusion.

I'm curious about why faculty choose to pursue certain cases and certain questions. What led you to write this case when it doesn't appear to be directly in your sphere of research, the kind of work that you usually do? So I study leadership, globalization, and innovation, as you said. And one of the things I know from my research is you rarely build an organization that can innovate time and again unless you build an organization that has an inclusive culture.

So why did I write this case? I wrote this case first because it's very consistent with my own values. I do believe that we need to build organizations that are inclusive where people do have equal access to opportunity. That's the first reason I wrote it. And when the dean asked me to become the co-chair of our efforts with regard to 110, an organization we'll be talking about shortly, I said, of course.

The second reason I wrote it is I actually do a lot of work myself on diversity, equity, and inclusion because I study innovation. And innovation rarely happens unless you build an inclusive culture. Inclusion there really is about inclusion where you really can embrace diversity of thought and deal with the conflict that inevitably comes up when you have diversity of thought. Demographic diversity is different from diversity of thought.

But demographic diversity often contributes diversity of thought because our lived experiences impact our mindsets, the way we see the world, the way we behave. So I do study diversity, but diversity of thought, again, often because I study globalization, I'm also looking at demographic diversity across the world.

So those issues of how you build organizations where you can embrace difference and not be derailed by difference, which is what happens in many, many organizations, is something that I always take an opportunity to study. Yeah. Everybody's familiar with Delta Airlines. We've probably all flown them at some point or another. It's a mammoth organization. Addressing those kinds of questions within Delta, I would imagine, has its own...

own set of challenges. They've been around for a long time, though, and I was interested to see in the case that this has always been sort of part of the culture of the place. Can you talk a little bit about the founder, who is CE Woman, and what his mission was with regard to employees and customers? How did he think about those relationships? Since its inception in the 20s,

Delta has always competed really with two values. One, innovation, be ahead of the curve in what you're going to do and what you're going to deliver for customers. But the other one has been this issue of people centricity. That if you in fact meet the needs of your employees, they will meet the needs of your customers. And if you meet the needs of your customers, then you're going to be able to meet the needs of your investors. So from its inception, the company has believed that's important. Now in the 40s, they moved their headquarters to Atlanta.

And as many of you may know, Atlanta really is the birthplace of the civil rights movement. You know, it's interesting that you read that quote from Martin Luther King. So I think one of the things about Delta is it does sit in what's considered by many people to be the black mecca of America. And I think that Delta Airlines, we all know it because we've flown it. And also Atlanta, a city that has played and still plays a very important role with regard to demographic diversity in this country. I thought it was a perfect opportunity to go there and develop this case.

The central figure in this case is actually Ed Bastion. We're going to talk a little bit about him, but I'm wondering, how did he rise to the CEO level at Delta? Ed comes from a family of nine. I think he's the oldest of nine children from Poughkeepsie, New York. His first job was at an accounting firm. He then moved into operating roles in finance in Frito-Lay and I think Pepsi. But then he found himself at Delta.

And he was there for a number of years, but then after 9/11, when all of the airlines went through a terrible crisis and lost tons of money, the strategy that the company came up with about how to handle the condition, the fact that they had lost so much money, was not a strategy he could agree with because he thought it was too costly to the people. So he left for a few years, and then he was invited back when there was a new president. Again, this is a man who

came to Delta, left and stayed now at Delta because it was so consistent with his own belief system that all companies really have to be people-centric. - Yeah, the case talks about the virtual circle leadership philosophy. Can you describe that 'cause I think it's important. - Well, that's exactly what it is. You know, the virtuous cycle is

get it right for the employee, the employee will get it right for the customer, then the customer, when you get it right for the customer, then you'll have the capital you need to invest in the business and also give investors their fair share. Yeah. How would people describe Ed as a leader? He's a marvelous man. I must say, I can't tell you how much I respect and adored meeting him.

As I said, I'd already done this earlier case and I really hadn't met Ed. I'd met the COO for that particular case on innovation. But when I met him and what people told me about him was just how much he is a servant leader. So when you read about servant leadership, you know, what is that really? Well, when you meet Ed, you know that. So people described how he comes out, helps you carry your boxes wherever they need to get to the car. He always wants to be of the people. He leads from the front as they describe it, but he's always one who listens and he's willing to

be courageous and bold about what he believes, like leaving a company. What is the culture broadly like at Delta Airlines? They have a very can-do culture. They're very operational, as you might imagine. An airline, right, and the logistics, everything has to get right. But as he points out, you either learn how to trust and empower and delegate, or you're not going

be happy being the head of an airline where you have 90,000 people and everybody has to do their job right because safety is what really matters first. And then of course a part of the customer experience, the whole customer experience. You always want to innovate because customers are wanting more and more from us.

So Delta being located in Atlanta, a large part of the population there are African American. What's the experience for African American workers who are at Delta? So what can I tell you about Atlanta? Well, Atlanta is a city that is very diverse, very multicultural, and the black population is large there. And there's also a black middle class population there. There are a number of historically black colleges there. And as I said earlier, it is considered to be in some ways the black Mecca of America.

is despite the percentage of black people in the population in Atlanta, Delta is the largest employer in Atlanta. And I think in Georgia, they don't actually have that percentage represented in the company. And of the black people who do work at Delta, they work in what are referred to as scale jobs.

And scale jobs are really frontline jobs or part-time jobs. And they're less likely to work in so-called merit jobs, which are salary jobs or full-time jobs. So one of the things that happened when Ed became CEO, he began to look at the complexion, if you will, of the workforce and wondering, you know, what's this about? Why are the black workers...

so concentrated in frontline positions. We don't see them represented as much as they should be given the population of Atlanta. And then on top of that, if you look at how many black executives there are, they don't represent even who we have in our own company. And that made him want his colleagues to look at, are we giving equal access to opportunity? The other statistic that is in the case that I really would like to share with people that broke my heart is when he came in

He learned also that of the people who are born in poverty in Atlanta, only 2% ever escape poverty. Wow. And again, if you're the largest employer, he found himself asking, what do we need to do about this to make this world a better place, our community a better place?

We've heard a lot about what leaders and companies have been doing since the murder of George Floyd. But what I found interesting about this was that Ed started to move down this road well before the murder of George Floyd. He started to pay attention to this. So what were some of the early DEI steps that they started to take? And at this point, the case introduces Kieralyn Johnson, who was chosen to lead these efforts. I'm wondering a little bit about her background and why they chose her.

So one of the things that they decided to do, and in fact, you're right. As soon as Ed came in, they began to look at, at that point, they called it diversity and inclusion, had not added equity to it. But some of what I was just telling you about, he began to look at what's the population of Lana? Who works in our company? Is it representative of that population? And then if they are in our company, how are they doing? Are they mobile? What's going on with them? So one of the things that is also a value of Ed Delta is being analytic.

So they are very, very focused on employee engagement scores. So two issues always came up in their employee engagement, even though they only had 2% attrition, which is a very low attrition rate. Really low. Really low. And we're talking, I mean, I think when he became CEO, it was 80,000 people. It's about 90,000 now. But what I would say is, imagine, only 2% attrition, so you're still worrying about employee engagement because they understand about that virtuous cycle. Two topics always came up, mobility and development.

Also, this issue of, if you will, scale versus merit in terms of mobility and development. So they begin to really tackle that because it's like, well, wait, the data keep telling us what we're going to do about it. So they had on their own begun to move to what is now called a skills first approach because he believed, you know, wouldn't it be better even at the corporate level if you had people who were from the front line?

who knew customers and knew the whole experience. So why aren't we using all the precious talent we have in this organization and figuring out how to give them the developmental opportunities to move them up? Because if we all have had that frontline customer experience, the whole company will be better at what it does. Now, I will admit, and we both know, that airline experience is not our favorite sometimes.

It's not easy to create the right customer experience because, in fact, you're in a broader ecosystem. You have to go to the airport, et cetera. And a lot of their innovation, though, is end-to-end from when you get out of your, you know, whatever that car is or whatever brings you the public transportation to the airport to when you get on the plane. So what I was looking at on the hangar, and I just want to add this to the story, is they were the first airline to be invited to the Consumer Electronics Show because of the innovation they've put in place that we're going to be seeing very shortly to really help

the whole experience be better. So I do want to say that first. That's a tease right there. That's a tease. And so really, and it's a tease because I think that Ed really gets that if you're really going to do DE and I appropriately, it has to be deeply embedded in your business strategy.

Because this is not a program. This is about something that is sustainable, that is going to change the outcomes for your customers. And you can only do that if you change the experience of the employee. So they started early on in this. As soon as he became CEO, like, wait a minute, we got to work on these two issues, development and mobility. And when we work on that, we got to do it in a way that it's sustainable and improves the customer experience. So let's go back to what they did call it skills first, but

what does it really take to do these jobs? And one thing is no matter if you're the highest person in corporate, you need to know what that customer experience is. So in the innovation case we wrote, there was a baggage handler who was getting his PhD and he was paying for it because he had a good job at Delta. And then he went to work in the innovation center to help develop the kind of experience you and I are going to have with Delta very shortly because of what they're doing with biometrics. That's so cool. Yeah. Yeah.

Well, that also maps to Carolyn Johnson and why she might have been chosen to head this up. She was a frontline worker at Delta. Exactly. Yes. And she had moved up. So she's an example of, you know what, here's talent. And

And why don't we recognize? And also, she obviously, she ended up being, she went to school and got educated, was in communications, et cetera. One of the things, she had a four-year degree, I should say. So she is a model of what they want to do. Why shouldn't the frontline person be a person who should be speaking to the CEO all the time? And as you see in the case, and one of the reasons and one of the lessons of this case is,

You don't embed anything in a culture that is as complicated, and I will talk about why it's complicated, as diversity, equity, inclusion, unless you have the very top management dedicated to moving that agenda forward. Yeah, and it certainly sounds like Ed is the right person to be at the helm in that situation. Well, let's talk about when the pandemic hits, because they're getting some momentum, they're making some progress on the DEI initiative, and then like the rest of the world, everything sort of hits the brakes because of the pandemic.

What were some of the principles that Ed sort of laid out to the firm at that time to keep this moving in the right direction? Well, one was going back to what really was their core value, take care of the people, the people being, if you will, both the employees and the customers. And, of course, a lot of these people had to go to work.

They had to be there during the pandemic and be exposed to the disease. And so that was one piece of it. The other was figure out what they were going to do about how much money they were losing on a daily basis. I forget. It was millions of dollars. I believe it was $100 million a day, but I don't know that I have it right. And so he laid out these principles.

And one of the things they did, which I think was not easy for them to do, is they did voluntary retirements. He didn't want to cut people arbitrarily, but he did explain that if you were getting close to retirement, they developed packages that made sense. Maybe you will take advantage of that and then we won't have to

let go of people who really can't afford to be retiring. They also, as part of taking care of people, and it was also the community, one of the other things they did, as you know, is Delta began to do what they needed to do to help get the necessary supplies to medical workers, et cetera, all around the world. They made a commitment

to making sure that they helped get those supplies around. Again, they were losing money, but they needed to do that because it was helping the United States and the world do what they needed to do. Because it is really a global company. Even though we're talking about Atlanta, we're talking about a company that serves the world. And so there's the broader community that they're also very focused on in terms of their employees and their customers.

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The case points out that they certainly started to lose some momentum on the DEI front. And then the George Floyd murder happens. That obviously jolts everybody in the nation. Institutions of all kinds are now all of a sudden paying attention to DEI in a way that they hadn't before. How did Ed and his team react to what happened?

So I just want to say, I don't know that they were losing momentum. The thing that I would say about what was going on with DE&I was more that they wanted to get it right. If anything, because they now have a tagline that's sort of about progress, not perfection. But I think they're a company that's used to perfection.

Even though we may not feel it, although you know they've gone up their number one airline in the U.S. in a lot of different dimensions now. They're in a very different place than they were when Ed became CEO. So they really do like to get things right. And that makes it a little complicated when you need to do the kind of experimentation necessary to move something like DE&I along.

So I would say that they had begun to work on skills first, et cetera, maybe not at a pace that you would have liked to see or other people would like to see, but at a pace that would allow them to not have missteps as they made sure that it was sustainable. So all along from the very first moment, it was always about the why, the what, and the how. Why are we doing this? What are we going to do and how are we going to do it? And let's do it in a way that it's measurable, people can be accountable, and it will be sustainable.

So that meant they were a little slower. So going back to that cold call, how much progress have they made? When I asked that question, some people would say, well, they're not moving as fast as they should because they're trying to get it right all along the way and wanting to be embedded. So they don't want it to be a program or an initiative. They want it to be a part of their business strategy, which means really groundbreaking.

creating a whole new talent architecture. So what they found with George Floyd, what they began to describe in 2020 is there were really two pandemics. There was the medical pandemic, if you will, and then there was the economic pandemic related to that. And what they found is that black and brown people were being more impacted by both of those pandemics. So he was very focused on what are we gonna do about this? 'Cause they had this principle of taking care of their people. He began to talk to other CEOs about how they were responding

to what was happening in our country and around the world. And he spoke to the two Kens, Ken Chenault and Ken Frazier, about an effort they had started called One Ten. And the goal of One Ten was to create in 10 years a million jobs for black people who had not gone to four-year colleges that would provide families sustaining wages. So he said, I don't know how many jobs we're going to really be able to contribute.

Right now, we're losing money like I can't believe. But you know what? We've got to figure it out. We need to get going with it. So he just agreed to something. He didn't know quite what it would mean. Right. But he knew it would accelerate something that in his heart he already believed was the right thing. Yeah.

And some of our listeners might remember we actually discussed a case by Professor Kash Rangan about 110 when it first launched a couple of years ago. And so Delta was one of the several major firms that signed on at the Ken's insistence. You know, they were pretty convincing to participate in this initiative. And it certainly made a lot of sense in the case of Delta in particular. You mentioned earlier that the E didn't become part of the DE.

until a little bit later on. Can you talk about why it was important and how that sort of shifted the mindset of the focus at Delta? So I think, you know, it's so interesting because now it's D-E-I-N-B. Belonging is being added to it. But the E part is, again, equal access to opportunity. Without that equity lens...

you're really not going to get the kind of accountability that you need to have in place. So when they added that, and that really fits skills first. It goes back to we need to make sure people have equal access to developmental opportunities and to mobility, and it's very tied to our business strategy.

What were some of the opportunities that Delta started to look into with regard to equity? So one of the things they did first is they said, you know what? We really do need to go to skills first. Why are we requiring a four-year degree for certain positions? So they went back to basics, and they're still working on that and really have made much more progress in really reconfiguring their talent architecture to be around what's the mindset, what are the skills literally required to do whatever this job is. Being real clear about that and not using –

four-year credentials as a proxy. So that whole process of getting that all in place is really, really hard. And then you also got to get paid tied to that appropriately. And then they discovered if you have 90,000 people to do this at scale, you have to build a technology infrastructure to support this, to let people be aware of what these positions are, to do all of this work. How are you going to get people from scale to merit?

Now, there are two things they did. One very, I think, just shows that they're quite serious. They had had all of these part-time jobs. And basically, if you had a part-time role, you often did not get access to benefits. So they made a commitment to actually stop having people in certain roles where you didn't get enough hours to actually get benefits. And they made those positions full-time. So at a time when you're losing money, you kind of make the decision, you know what, this isn't fair. These people are doing the same work.

But because they only work X hours, you know, they're not getting benefits. And we all know businesses need to make money. But a very common practice is have a lot of part-time workers that you don't really need to give them benefits because they're part-time. And that way you can control your costs. He decided that's actually not going to be good for this company because we have people who feel like second-class citizens. So they got rid of that. That is huge. That is huge. And shows that you're putting your money where your mouth is. Yeah.

The second thing they did is they began to create apprenticeship programs. They already had some, but they do have all these historically black colleges. They have Georgia Tech, et cetera. So they began to create apprenticeship programs to try to increase the number of opportunities that people had to develop, if you will, the right skills so they could take advantage of these jobs. But the other thing they did, which is different from some of the other 110 companies, he said, we already have the talent inside.

We need to take the talent we have inside and we'll have some special efforts that are focused on people who've been disadvantaged, which includes black population. And we will give them access to these apprenticeship programs. The other thing they did that I do want to commend them on is they disaggregated their diversity data.

Okay. It turns out that many companies will tell us they're quite diverse, right? And they tell you, you know, I don't know, 60% of our population is diverse. They don't break down the categories. So that is what Delta had been doing too. You know, we're diverse. So it's the aggregate numbers versus the... You know, Caucasians versus everybody else. Yeah, yeah. So when they made a commitment to break down those numbers and really see by category...

who is in our organization they really saw for instance with the black population that in fact they did not have the representation at the senior levels that might have been implied by the aggregate number when you thought about what diversity looked like so he said we're going to be transparent about where we are and we're going to set goals

that are based on not quotas because we don't do that but we're going to just set some goals for ourselves about what we think it should look like and it's again back to representation. The senior management should represent what

what we sort of see at the front line. What you've described are all great examples, all of which come at a cost. And Delta is a public company. And I'm just curious about how shareholders and others outside of Delta were looking. And this goes, this applies to anybody who signed on for 110, because all these firms are going to be making commitments that are going to cost them money in the short term, but pay dividends, we think, in the long term for the firms and for the country.

But how did people think about Delta when they did this? You know, I don't know. To be perfectly honest, I did mention that they got rid of the scale job. They made them, they didn't get rid of them. They're more full-time employees than they would have had. This was in the customer service ranks. I should be very specific about that. It's not that they don't have other part-time jobs.

So I don't know how much it cost them in the short run. The other thing they did, which many companies have done, is they also looked at diversity suppliers. They wanted to create wealth for everybody in Atlanta so the whole city is lifted. Given the population of that city, you need to be really thinking about what are the criteria you're using to select not only your employees or promote them, but also your suppliers. So they really took a systemic approach.

So I think they've had mixed reactions and as a country we're pretty polarized about a lot of issues. But I think that what they can say is this is what we've always believed about this virtuous circle and who are our employees?

Are they happy? Are they feeling... and they're not going to be happy unless they're being developed, unless they're mobile. They've been consistent and they've been systemic. You can't really say, "Why are you doing this?" because they have the story. And one of the other things that was extremely impressive to me about what they've done is you've seen that most of the senior executives have gone away to something called the Groundwater Institute

to truly understand what's often a very provocative term, systemic racism. What does that mean? Why do we see the kind of economic inequality in a city like Atlanta? They all went back and studied that and took a number of days to understand why the demographics look the way they do and the economic development in their own community. Because that's the why, not just what we're going to do and the how, but why are we doing it? Not that everybody's going to buy your how or your what.

But you know what? He wants people to understand the why. What is the truth about our history? And so I think that that base is there, and I think that he speaks from that. He did a lot of learning. So you asked me earlier, you know, what is it about Ed? And I'd say Ed is definitely a learner. And if you look at the amount of commitment he made to meet with people who could educate him about the social political history of Atlanta and the United States, he did his homework. He went back to school, and he listened to

and learned, and then he required that his executives do the same. That they all know why they're up to it, so when you're answering questions from any of these outside stakeholders, you speak from what our company narrative is in our own history and commitment, and you may have a different point of view about what we should be doing, et cetera, but we know why we're doing it, and we know what's going to make a difference in the short, medium, and long term for sure.

These are all great illustrations of your earlier point about how important the leadership is in all of these DEI efforts that firms are making. So one of the things that I would ask you is, in the absence of somebody like Ed Bastian, how do you sustain effort on these efforts over time?

I don't know that you can. This is very personal for me in many ways. And I do work with senior executives about how to think about whether they really want to tackle DE&I. And if they're not committed to it, if they're not going to do the hard work and have the complicated conversations...

and try to embed it, it really isn't worth it, frankly. I just don't think it is because it is going to take time to get it done. So I don't think a company can get this done in any kind of serious way if you don't have senior management committed to getting it done. Yeah, that makes perfect sense. I do think the move to skills first is a whole new way for us to

think about what companies need to be doing when they're creating their talent architecture. Now here we are at obviously at a university, so I hope we add value as a university and I think we do. But I don't think we should be used for credentialing purposes. I think we should be used because of what we're doing for people in our institutions actually are helping people do their jobs better at whatever organization they choose to go to. So I'm very positive about skills first. And one of the things I think, and I don't have the statistics for you,

My sense is that many of the people who get into these Skills First apprenticeship programs, not just through 110, but I've been looking at them in other contexts,

actually are more prone to go back and even get more education because they get more opportunity. Their ambitions grow, their aspirations grow, and the company looks at them differently. So I see this as all consistent with building a nation that can really deliver in a time when not having an educated workforce is really a problem for any community and certainly for this country and the world.

Linda, this has been a fabulous conversation, as I knew it would be. I've got one more question for you, and that's simply if you want people to remember one thing about the Delta Airlines case, what would it be? As you know, a few years back, I co-authored a book called Collective Genius. And we called the book Collective Genius because when we were doing work at Pixar, one of the things we heard is that everybody has a slice of genius. Everybody has talent. Everybody has passion.

What I learned there was that the role of the leader is to make sure that we take full advantage of the talent and passion or the slices of genius of the people in our organization. One of the things that I heard from Ed and his colleagues involved in this effort is the brilliance of the individuals in the organization. I think leaders who don't believe that there's a lot of brilliance

that there are in fact slices of genius in their organization, diverse slices of genius that you may not see initially because they don't look like you, speak like you, have your experience, you're going to miss out on an opportunity to build a company that can be very competitive. So I would say the Delta case really helps you look back and think about your assumptions about talent. Have you created the kind of talent architecture that is going to support your business strategy today and tomorrow? And

This case will help you think about that even if, if you will, you're not particularly focused on what to do about black employees in your organization. I love that. Linda Hill, thank you for joining me on Cold Call. Thank you. Pleasure to be here. That was Harvard Business School Professor Linda Hill in conversation with Brian Kenney on Cold Call.

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