Frequent on-time service to and from convenient airports for business travelers, provided at fares rivaling the costs of driving an auto were only some of the elements of what Southwest soug
Frequent on-time service to and from convenient airports for business travelers, provided at fares rivaling the costs of driving an auto were only some of the elements of what Southwest sought to deliver to Customers. Just as important was the service provided. The founders wanted the service to be both memorable and inexpensive to deliver. They had enlisted the help of a regional advertising agency, The Bloom Agency, to come up with, among other things, a personality for the airline. As a result, Southwest became “the airline that made it fun to fly. Young, friendly, refreshing, and exciting.” Thus, the LUV (later Southwest’s stock designation on the New York Stock Exchange) airline was born, featuring things that today might be regarded as blatantly sexist: love potions (for drinks), the love machine (for tickets), and ads with female cabin attendants in hot pants who invited travelers to fly an airline that provided something only Southwest could offer, “me.”
From the outset, Southwest’s management focused on hiring agents and cabin staff with positive personalities, senses of humor, and the willingness to make humorous intercom announcements and otherwise innovate on behalf of Customers. These antics replaced meal service on flights that were relatively short anyway. Employees had to be able to use good judgment in implementing Southwest’s policy of “do whatever you feel reasonable doing for a Customer.” In return, they were paid wages that were roughly standard for a startup carrier and given an opportunity to participate in the airline’s success through membership in its profit-sharing and stock ownership programs.
The organization was imbued with a sense of ownership. Jeff Lamb, SVP Administration and Chief People Officer, told a story that illustrated it. He had just joined the organization, leaving his former job in real estate because he was intrigued with the chance to be part of the Southwest experience, when a member of his staff came by the office to drop off a cowbell and announce that “everybody is gathering in the lobby in 15 minutes to welcome Bob back from the hospital.” Lamb said, “I didn’t get the memo.” The reply was, “We don’t send memos for this sort of thing. See you there.” According to Lamb, hundreds of people assembled in the lobby, greeted Bob, and were back at work as if nothing had happened, all in the space of 15 minutes, while a skeleton staff maintained “coverage” to ensure that nothing stopped entirely.
Employee ideas for recognition and celebration were reviewed by a “Culture Committee” drawn from all levels of the organization, which used the Southwest Way to guide its efforts. (See Exhibit 1.) Many of the projects were self-funded, with Employees raising money to buy T-shirts and other paraphernalia with bake sales and other events. Employees extended their team efforts away from the job as well, engaging in community-based activities together. The organization as a whole officially supported the Ronald McDonald House Charities for sick children and their families.
There was a constant effort to maintain what came to be known as a “Warrior Spirit” at Southwest. A typical strongly worded memo from Herb Kelleher encouraging everyone to reduce costs to maintain the airline’s low-cost leadership position was intended, in the words of the memo, to make sure we don’t “rest on our laurels and get a thorn in our ass.”
A “Servant’s Heart” and a “Fun-LUVing Attitude” characterized much of the airline’s culture, as shown in Exhibit 1. Efforts to preserve the culture were led by co-founder Herb Kelleher, who had become Chairman in 1978 and CEO in 1981, and Colleen Barrett, who for many years served as Executive Vice President Customers, and later President. Kelleher’s antics were legend. They included dressing in outlandish costumes, riding a motorcycle into the headquarters lobby, arm- wrestling another airline executive in a highly-publicized “Malice in Dallas” match over the rights to the use of an advertising slogan, “Just Plane Smart,” and serving as the lead celebrant at the many awards parties held by Southwest Employees. Visitors to Southwest’s headquarters were impressed by the thousands of photos of Employees taken at these events as well as frequent hugging and use of the word “LUV.” As one visitor put it, “the longer it went on, the longer I concluded that the behavior was real. No one could keep up a pretense for that long.”
Southwest remained the most heavily unionized airline in the industry. Its Employees were represented both by national unions such as the International Association of Machinists and by “associations,” such as the one formed by the Pilots. In its negotiations with these organizations, management had always sought to provide reasonable compensation and secure flexible work rules. The flexible work rules enabled Employees to perform many different jobs as members of teams. For example, pilots could handle baggage if the situation demanded it. Teams were assigned to gate operations, with responsibility for turning planes on a schedule that in the early years often called for 10-minute turnarounds, thereby increasing aircraft utilization. If a plane was delayed on the ground, it was the team’s responsibility to make sure it didn’t happen again. As a result, heavy emphasis was placed on the selection of Employees with abilities to relate to both Customers and other Employees. Regardless of rank, they were then required to complete team-based training activities.
By 2007, Lamb’s People Department was responsible for hiring roughly 4,000 people per year in an organization of more than 35,000. This was sufficient to support growth and replace departures in an organization with a relatively low Employee turnover rate of less than 5%. That year, it received 329,000 applications for employment. A significant number of hires were from referrals by current Employees. Recognized as one of the best places to work in the U.S. for several years running by Fortune magazine, Barrett discontinued Southwest’s participation, declaring that it required too much of an investment intime.
1. What kinds of things over which Southwest’s management has some control could go wrong, and what should be done to make sure that it doesn’t?
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