Industry Insider: NetJets Chairman and CEO Jordan Hansell
Jordan Hansell became chairman and CEO of NetJets in 2011, just two years after coming onboard as chief administrative officer and general counsel. Under his direction, the fractional-share provider launched Signature Series, a program whose goal is to refresh and unify the fleet with custom-designed cabins. The company is also putting a footprint in Asia with NetJets China Business Aviation, which will initially focus on providing aircraft management services.
NetJets is a subsidiary of the publicly owned Berkshire Hathaway, and Hansell considers that a major advantage. Thanks to the parent company, he told me, “we have patient capital and a relatively low cost of capital. So we can make decisions that nobody else can make. We can take a much longer-term view. We can weather the natural fluctuation of the private aviation market in ways that nobody else can.”
I had never met Hansell before I sat down with him in the NetJets-dedicated boardroom at New Jersey’s Teterboro Airport to conduct this interview. I found him to be punctual (he arrived an hour early for our meeting and also for a subsequent photo session), straightforward, focused and exceedingly bright. I’d been warned to not ask many personal questions since “Jordan is very humble and likes to keep the focus on NetJets,” and I was prepared for guarded responses. On the contrary, his answers to my questions were often personal and revealing of character.
Though he’s a youthful 43, Hansell comes across as wise beyond his years with distinctly old-school values and a strong focus on the importance of family and personal integrity. As a high-achieving law student, he fully intended to run for public office but wound up applying his abilities to the corporate world. He was profoundly affected by the 1998 loss to cancer of his brother John and you get the sense that he conducts his life purposefully and does not take one minute of his time for granted.
When you look back on your career, do you see a linear path that brought you to where you are now?
No, no. I always laugh if anybody asks me that. There is virtually nothing I am doing now that I would have anticipated. I would not have known I was going to live where I live or have the number of children that I have. I would not have known I would be in a business like this or that I would hold a position like I do. So much of life is serendipity.
Since I was a little kid, I wanted to be a politician. So I got a political science degree. I went to law school. I got a master’s in public policy. I thought I wanted to run [for political office], but I ultimately decided that it was probably not a fair thing to do to my family—nor was I convinced that I had the patience required. I also discovered that I have a fascination for building the proverbial mousetrap—for trying to create something and improve upon it. So the idea of getting into business started to appeal to me more and more while I was practicing law.
Did your training as an attorney help prepare you for the role of CEO?
First and foremost, the concept of legal training is that you are never going to know everything, so they don’t try to teach you everything. They try to teach you how to think—how to learn something in rapid order and understand it, discard what is unimportant and focus on what is important. I don’t think you get that in any other professional training, to the same degree.
But it doesn’t teach us squat about how to manage anybody. So that ends up being a different game altogether. How to motivate a team is a constant focus for us—to make sure the team is pulling together and operating effectively.
When you hire, how do you decide whether someone will be effective on that team?
One of the things I do when I hire [high-level] people is ask what makes them uncomfortable with a boss. One gentleman said, “Well, he would go around me and talk to my team instead.” And I thought: you are not going to fit [in at NetJets]. We have got to go around sometimes, because [managers] have a lot going on and they may not know certain information. My promise to them is that I will not ever do anything or form an opinion until I talk to them about it. If all I do is come back and give you the information, we are all better off. You want people who are trying to solve the problems that we are facing and are not distracted by things of a personal nature that are specific to them.
When you interview prospective employees, what else do you look for?
One: Do you have the intellectual horsepower to do what we need you to do? Because it is not an uncomplicated business. Two: Do you have the integrity to do what we need you to do? As my boss [Warren Buffett] says, intellect with lack of integrity is a bad combination. So, are you honest and straightforward? Are you going to think about the good of the entity before thinking about the good of yourself? Are you willing to try and make the overall project succeed?
How do you determine whether an interviewee has those qualities?
I’ll ask them to define corporate politics for me. [I’ll say], “Give me an example of when you have had to play them, how you did it, and when you have had to stop it.” Then you let people talk. They will either make their case, or they will end up burying themselves. I also will ask them to give me an example of a boss they did not like and why.
NetJets is known for its emphasis on safety.
We have spent over $100 million a year training our pilots. We design protocols hand in hand with FlightSafety, with training programs specific to certain airfields and conditions.
Occasionally we have owners who get frustrated if everybody else is taking off—Aspen is a classic example—and we tell them we can’t go. If we can’t get you out on one engine, we are not going. And we say to our crew, “We will back you up in those circumstances.” We are here to serve the owners, to provide service they can’t get anywhere else, and that means that if it is a safety issue, the pilot decides. We may inconvenience [customers] on occasion but we are only going to do it for their safety.
Have you seen a big change in attitude toward business aviation since the recession?
What I am hearing [people] say is that they want to get back to [flying privately]. And they will say, “I am trying to get to all of these places to do all of these things and I can’t.” Frankly, the thing that is somewhat disheartening is denigration of the industry. Customers will say that if the politicians would quit beating them up, they would do what they think is best for their businesses and their families.
We hear that a lot too, but I have always wondered whether someone who uses business aviation really cares what Washington thinks of them.
Of course they do. That is human nature. So it is important that people are careful of what they say in the public arena.
Some people speculate that market conditions have permanently changed since 2008.
I don’t like the phrase “the new normal.” It doesn’t make any sense. Do I think there is a different cultural tendency between those who went through the Great Depression in the 1930s and those who came after? Sure. And there are some remarkable statistics coming out of the 2008–2009 financial crisis and I am not trying to downplay those. But it is not a lost decade. We have safety nets we did not have [in the 1930s]. We have not seen the long-standing global contagion that they saw then. I am not seeing people saying, “I am a different person than I was before and I think about the world materially differently than I did.”
You seem to take your time at NetJets when moving into new markets.
There are competitors of ours who are just trying to place planes on somebody else’s certificate. I mean, good luck. That’s fine for them, but we want to control what we are providing. We have worked very hard at perfecting it. It’s a risky business. We are not comfortable letting someone use our brand—which we think stands for very high levels of safety and service—and do it their way, [just so we can] take whatever incremental revenue we can get from that. It is not remotely worth it.
I have noticed you don’t put a huge emphasis on celebrity endorsements.
Well, we have a public relationship with Roger Federer. He is terrific. But most of our flyers want anonymity from the outside world. I can think of a lot of famous people who fly with us who don’t want to be part of a campaign of any kind.
Who were your early influences?
My father and mother. Everyone in my family is a lawyer. My brother was a lawyer, my wife is a lawyer, my father is a lawyer and my mother is a psychologist—so she keeps the rest of us sane. I had kind of this sickeningly sweet upbringing. My parents cared about their kids. They wanted to give us what we were willing to try to earn. It was this Midwestern sensibility. They didn’t have expectations for us and there was never any pressure for us to do anything.
Do you put a lot of pressure on yourself?
Yeah, mostly. My parents in my eyes were successful people. They had strong personal lives, they had a strong relationship—they still do. They had succeeded in their areas of professional endeavor and so I wanted to be like them.
Were you intimidated at first by Warren Buffet?
Yes, of course. I have worked for presidents of the United States, I have worked for Supreme Court justices, I have worked for Warren, I have worked for my father. They are all intimidating but not to the point where you can’t perform your obligations.
How do you plan for interactions with Buffett?
You want to be thoughtful and prepared and helpful. The goal is that he feels comfortable with my judgment, the judgment of the team and the operations of the company. [I ask myself], “What would I want to know if I were him? How can I convey it to him as efficiently as possible?”
You have said he wants to be the first to know if there is bad news.
He has a rule that he wants to know first. And he’s usually quite sanguine about it. Not that he thinks bad news is good, but he has 86 subsidiaries, some which are just enormous. He has been at this for years, and there is not a thing Warren hasn’t seen, so I am not usually coming in with something that is unique.
So you don’t dance around the issue if the news is bad?
I never do that. I cut to the chase. I try to take as little of his time [as I can] and make sure he understands exactly what he needs to know. I would give that advice about [having a difficult conversation with] anybody. Never beat around the bush, and if you made a mistake, start with: “I made a mistake.” Most people aren’t going to be mad at you because you made a mistake, unless you make the same one over and over. They are going to appreciate that you went in and said, “I think I made a mistake, and here is what I am going to do to fix it.”
I have that same rule with anyone who is working with me. We have plenty of challenges—what we need are solutions. If you come in with something you think we should know about, [you should] have also thought about how you would fix it. It may not be that we take your advice exactly, but it is sure going to help us to start getting to the right answer.
How do you balance your intense work travel with having a young family?
First, I have a terrific spouse. Before I took this job I discussed it with her, and if she had said, “this isn’t a good fit,” I wouldn’t have done it. She is hyper-competent and runs everything in our personal lives, including our finances. She is smarter than I am by a long shot.
Do you have any downtime?
I try to. I used to run triathlons. And I would like to do more, but that is really not reasonable on this schedule. That sort of thing goes by the wayside in place of more important things like [my kids’] recitals and concerts.
Is a good work/life balance even possible for big-company executives in today’s world?
If you are rising in an organization and taking on greater responsibility, there is no cardinal sin in saying you are not capable of spending or willing to spend the time doing [that job]. The problem is if you take it on and then shirk it. True balance, especially as you get more and more responsibility in the workplace, is very hard to come by, because there are a whole lot of people relying on you. I view the 6,000 NetJets employees—their livelihoods, their professional development—as my responsibility. So that drives a balance that is out of balance. I would love to coach my kids’ athletics but that is an example of something I had to give up [to be CEO of NetJets]. I try to make it up to them in other ways.
What have you learned about life?
When I lost my brother, I realized how impermanent all of this is. You focus on the things that matter as best as you can. And even then you don’t get the balance right. There are lots of things that are out of your control. Focus on what is in your control. Try to satisfy yourself and your family. It is not a question of material gain. It is a question of looking back at the end of the day and saying, “Am I satisfied with what I have contributed and with what we have done?” That infuses everything I do now. I think I am fairly straightforward and unadorned; I am competitive as all get-out, but I don’t have much of an ego. What makes me interested is, collectively, are we succeeding, and is everybody pitching in, trying to get something accomplished that is extraordinary?
Résumé: Jordan Hansell
BIRTHDATE: Oct. 20, 1970 (Age 43)
POSITION: Chairman and CEO, NetJets Inc.
PREVIOUS POSITIONS: President, NetJets. Chief administrative officer and general counsel, NetJets. Ten years at Iowa-based law firm Nyemaster Goode.
EDUCATION: B.A. in political science (summa cum laude), Duke University. Master’s in public policy, University of Michigan. J.D., University of Michigan Law School (magna cum laude).
PERSONAL: Lives in Canal Winchester, Ohio, with wife Silvia and three children.
CHARITIES: John J. Hansell Memorial Scholarship (for high school students), Duke University Scholarship Fund and Columbus Metropolitan Library.
Jennifer Leach English is editorial director of Business Jet Traveler.