Southwest Airlines has remained one of the most successful American companies in recent decades. In an industry that loses billions annually, the company remains profitable for 31 consecutive years. The author of "The Southwest Airlines Way," Jody Hoffer Gittell shows us how the company does not use the conventional wisdom of the market and uses completely innovative approaches to deal with some common business situations. Southwest's culture, which values the relationship and respect for its employees, has led the company to succeed. Know the different measures taken by the company that led you to profit, learn how to think out of the box and excel in your business!
To stay profitable in a market where most businesses are breaking, you need to do differently. And so is the story of Southwest Airlines. The company that revolutionized the air transport market was known for inventing the so-called low-cost model. The company was founded in 1971 and has always relied on the simplicity of the service.
The company had no classes of passengers and practiced the lowest prices in the market. This created the so-called "Southwest effect," which caused a major drop in prices due to its aggressive pricing policies and thus a large increase in passenger demand.
Southwest Airlines has a unique culture and set of company-wide principles that allow it to continue growing and maintain its profitability.
In this microbook, you will discover ten measures that the company uses to stay on top. If you have a company, you can improve its quality and efficiency by adopting these measures in your own business. Shall we go to them?
It is a fact that every organization desires to have a charismatic leader, but this is not a prerequisite for success. Good and efficient business leaders should have:
Credibility - the ability to inspire confidence in your employees
Empathy - Concern for the well-being of your employees
A business leader develops credibility over time. After a while being straight and not hiding anything, employees will begin to believe that that leader is someone who tells the truth. Credibility is built up gradually, over a long period, but it may end overnight if a bad judgment is exercised in an attempt to deceive the officials. Former Southwest CEO Herb Kelleher was an example of credibility for the company's employees because he cultivated the habit of always telling the truth without trying to ease the situation.
As credible as it may be, it is not enough on its own. Exceptional business leaders also find ways to demonstrate that they care about the individual well-being of their people. In Southwest, this is demonstrated by the fact that the company has a record of zero layoffs, which was maintained even in the face of complicated situations experienced by the airline industry. It is also known that Kelleher and COO Collen Barret are happy to be approached by Southwest employees who need help in dealing with their problems. They not only listen but also get involved to help people solve their problems. They are perfectly happy to break through the barriers of the organization chart to find efficient ways to help their people. In this way, they demonstrate that they care every day, and not only in times of crisis.
Leaders and supervisors are very important to the success of any organization because they work side by side with other employees. They directly impact the quality and efficiency of the work. To build top-line leaders:
Have enough leaders to work with individuals.
Teach leaders to conduct coaching sessions and feedbacks.
At Southwest Airlines, leadership is a distributed process. The senior management team is well known in the public arena, but most of the work is done by the supervisors, who work daily with the frontline employees. Southwest has more supervisors per employee than any other airline, standing out in the training of these supervisors to provide leadership in dealing with daily problems. Specifically, Southwest supervisors provide most of the company's training and counseling.
This is possible because in Southwest:
There is one supervisor every 10 or 12 people.
Supervisors have managerial responsibilities, but also perform the same tasks as employees.
Because supervisors work with employees, they have a high degree of credibility and influence.
Most training seeks to solve a problem and provide advice instead of disciplining errors.
Supervisors receive leadership training, so they know how to act with their responsibilities. They begin as training supervisors, then become operational supervisors, and then receive continuous and regular training sessions.
Southwest makes a deliberate and conscious effort to hire people who know how to work as a group. The organization works to improve the skills of these teams by giving them training for relationship skills.
In some businesses, there is a deliberate attempt to attract and retain high performers. Southwest does not even try to recruit the elite. Instead, preference is given to new people who will be able to integrate with other members of the group on the team. The company tries to find people with the right attitude and only then provide them with the skills and experience they need.
Southwest's contracting priorities are also extended to mechanics and pilots, two groups of professionals who are typically hired for their technical skills. To increase the likelihood of hiring the right people, the Southwest recruiting process:
It allows for a trial engagement period, before a long-term commitment - to ensure that Southwest and the new employee learn more about each before making a final decision about the employment contract.
It involves ongoing training - so the new employee has a realistic opportunity to build functional expertise and group work skills. This training will be a mix of:
Two weeks of classroom training and two to three weeks of on-the-job training with a supervisor;
Mentoring sessions with a more experienced person and regular periodic sessions with the training coordinator.
This process has the following advantages:
It keeps the focus on the overall work process - so new hires understand where they will fit in and how their roles impact others in the organization.
Incorporates regular task swaps - so everyone gets familiar with what happens in other departments.
It ensures that internal promotions are the main way to fill managerial positions - as this sends the right signals to the workers.
Conflicts are a fact of life. Instead of seeing them as a destructive force, Southwest uses them constructively to build relationships and improve performance. The company is very proactive in identifying and resolving conflicts.
To this end, it has well-defined processes:
People are encouraged to use all means available to resolve conflicts. If it is not possible to resolve them, managers are expected to play an active role in developing a solution.
A gathering for information gathering is conducted, in which the two sides of the conflict expose their perspectives on the problems. Conflicts often resolve on their own through improved communication.
If the conflict is still unresolved, the managers conduct another, personal, all-day meeting. In the end, most of the problems are resolved by the dialogue between the parties involved and the managers.
The process seems simple, but when well implemented, conflict resolution becomes more team exercise and less a destructive energy force. Southwest takes a proactive approach to resolving disputes and never ignores conflicts and differences. Instead, the company works on the premise that conflicts will come naturally from time to time. By utilizing them productively as learning opportunities, Southwest strengthens relationships among employee groups, shares knowledge, and encourages mutual respect among different company teams.
The Southwest work environment is structured in many different ways, such as a large family. People share common goals and share knowledge in an atmosphere of trust and mutual respect, forming strong bonds between employees, which brings more energy to the workplace.
Southwest is famous for allowing people to give their touch of personality to their jobs. It is a deliberate effort to increase the quality of work. Southwest employees are encouraged to develop good friendships with their colleagues. In this way, they identify with the company and see it as an extension of their own families.
So how does Southwest end the chasm between what a person does at work and what he does in his private life?
As mentioned, people are encouraged to be themselves - which allows them to personalize the way they perform their roles and responsibilities.
Southwest has a "Catastrophic Fund" - which any employee can access in times of pain or personal problems. Southwest not only recognizes the needs of employees but also does something concrete to help. This makes employees feel they can count on the organization.
Each Southwest station has its own "Cultural Committee" - which meets monthly to plan social and charitable events.
Southwest allows and encourages shift shifts - allowing employees to vary their work schedules so they can fulfill other family obligations. In this way, the company demonstrates that work should not be massacring and should not replace family and relationships.
"Border Approvers" are people who connect information from different company operating units. A good "border approximator" will help develop relationships between different parts of the organization, pursuing common goals and mutual respect for it to work more cohesively.
Most companies use information technology as a platform for sharing information between business units. Southwest uses the opposite approach. It has strengthened the role of on-site operations agents who are responsible for delivering every Southwest flight as quickly as possible. Also, these agents handle only one flight at a time, unlike agents of other airlines who may be responsible for up to 15 flights at a time.
The "border approximators" are good because:
They use a more holistic perspective - when people get involved in a variety of roles, they rarely have time to stop and consider the whole picture. Border approvers can share this broad point of view to help others work more efficiently.
They build relationships across borders - generating a broader sense of shared identity and shared vision between parties that often have no common interest.
They play a key social role - because they represent the union of the efforts of various units and departments. Having a real person in this position, not a computer, creates an opportunity for growth and strengthening of relationships. The "border approximators" give a human face to the combined work of two teams.
They provide flexibility - if a team has a temporary work impediment, the "border approver" may suggest ways for the other parts of the business to compensate for this impediment.
When a problem appears, some companies spend more time analyzing which department is guilty than trying to solve the problem itself. Southwest avoids this kind of situation by measuring overall performance. That way, when things go wrong, the goal is to learn to avoid the repeated problem and not to point out who was to blame.
The key to having a profitable airline is to avoid delays with airplanes. In most airlines, whenever a delay happens, an analysis is made to see if it was caused by who fuels the fuel, by the people who handle the baggage, or by another functional department. As a result, it is common practice for each of these departments to rush to complete their duties and not be blamed for any delays. This can sometimes be counterproductive because:
If teams cooperate with each other, the speed and quality of work can improve, rather than a group ending earlier and waiting for others to finish.
Much work and effort will be spent pointing the finger to blame other departments and units.
There is no incentive to share the information. So the problem does not become a learning experience on what to avoid in the future.
With that in mind, Southwest uses another approach. Delays are recorded as "team delays." Being less precise about the causes of delays and measuring performance by metrics that matter most to customers, Southwest places more emphasis on learning how to prevent delays from recurring in the future.
Southwest also does the same thing in its relationships between the field units and the array. They have good communication, which allows the lessons learned in one station to be communicated to other stations. Also, station managers have a free pass to do what works best. Avoiding too much detail in performance measures, the overall system works much better.
Well-defined task descriptions are static for a dynamic and evolving economy. At Southwest, all job descriptions are clear and specific, but there is an extra requirement, which specifies that each employee must "do what is necessary to improve overall operation - even if that means helping with other types of tasks."
Southwest is known to have pilots who are willing to help unload luggage if needed. This indicates the limits of flexible tasks that exist across the company when anyone is willing to do whatever it takes. Herb Kelleher was an excellent example of this since he often helped employees when visiting the different stations.
Why is this example of task flexibility so rare, even though it has great potential for significant performance improvements?
Most employees prefer to use their job descriptions as a workload overhead defense mechanism
Some employees like job descriptions because they prevent their managers from assigning tasks arbitrarily.
By limiting the areas of responsibility, employees can specialize and develop expertise.
Unions use task descriptions to protect available positions.
Having task descriptions defined, but including what is expected of each employee when needed, Southwest encourages its employees to be concerned about what the organization wants to achieve. Also, it reduces barriers between tasks and helps to encourage relationships among employees.
Note, however, that the flexible job description cannot exist in isolation. If a company's managers try to introduce this practice without all of Southwest's other practices, employees will likely resist the initiative. For example, if performance is measured and detailed by a department and not as a result of the overall process, there is little incentive for workers in one business unit to help workers in another unit. Flexible job descriptions only make sense if you use other elements that support that choice.
Most people assume that Southwest has no unions, because of its flexible job descriptions. In fact, Southwest is the most syndicated American airline. The difference is that it treats its unions as partners and not as opponents.
As in many business areas, Southwest has its approach to dealing with trade unions, which contains three elements:
Southwest accepts unions as legal representatives of employees and as valuable partners in the organization.
By doing so, it removes the traditional anti-union bias, which is the first major problem. By accepting the unions, the employees choose, Southwest's management demonstrates that it relies on the judgment of its employees.
Southwest expects unions to be loyal to the company and to behave like owners.
So when the company negotiates with the unions, they believe unions will act sensibly. Because Southwest employees have chosen to belong to six different unions, they believe the other unions will help ensure there are no over-demands.
Southwest treats unions as partners, not as enemies.
From this perspective, Southwest provides each union with accurate information for negotiations to move forward.
Finally, Southwest has exceptional working relationships, having faced only a six-day strike in the company's entire history. As evidence of the benefits of this approach, when unions try to make exaggerated demands, company managers need not respond. Instead, the other Southwest partner unions intervene.
Southwest does not follow industry practices by forming alliances with other airlines. Instead, the company works closely with its suppliers - an aircraft manufacturer, airport authorities and air traffic controllers - to form partnerships that generate tangible benefits for both sides. Also, Southwest works hard to maintain its suppliers.
The traditional approach to supplier relationships is to play against each other and try for a better deal. Most companies also avoid relying heavily on any vendor, so they do not dominate trading. Southwest does differently, forming long-term relationships with its major suppliers.
The advantages of this approach are:
Each company - Southwest and its suppliers - can focus on what they do best - that means the partnership ends up delivering better results than if each company worked independently.
Southwest increases your sphere of influence - beyond the boundaries of your company and into the entire value chain.
Problems can be solved together - allowing Southwest to benefit from the expertise of its supplier partners.
New opportunities can have quick responses - using assets not only from Southwest but also from suppliers.
Joint business initiatives can be developed - leveraging the vision of more than one organization.
The key to making this work is the quality of Southwest's organizational relationships. If she did not have strong internal relationships and leaders with a high degree of credibility, it would be very difficult to partner with suppliers. These internal relationships also dispel any "us-against" feelings that can disrupt partnerships.
The "glue" that makes these ten organizational relationships work for Southwest is its business environment of shared goals, shared knowledge and mutual respect. Without such an environment, the high-performance relationships grown in the company would not have the same kind of impact.
At Southwest, each employee is working toward three main goals:
3.Create Satisfied Customers
The fact that each employee shares these goals, regardless of area, creates enormous energy. This allows them to respond in a coordinated manner to any new challenge that appears or new information that is made available. This also provides context for decision-making and shared information. Shared goals are the foundation of business relationships.
At Southwest, all employees understand the overall work process. They also know and understand the connections between what they do and the work of others in the organization. Shared knowledge increases coordination and the emergence of innovative ideas.
In most airlines, there are clear and defined boundaries between people working in different functional areas. Most employees will interact very well with their colleagues, but they do not care about anyone below them in the hierarchy. When delays happen, there is usually an attempt to blame someone who is down in the hierarchy.
Southwest has a culture in which every employee treats others with respect. They recognize the different roles that functional departments perform to keep the plane flying. The contribution of each person makes the overall operation of the business recognized and respected. And as each employee values their contribution to others, there is an inclination to act productively and achieve organizational goals.
Effective communication is the technique used by Southwest to build relationships within the organization. The company excels in this area - which means that it communicates frequently, periodically, and seeks to solve problems rather than blaming people.
For an airline, time is money. If you can reduce 5 minutes of the time an airplane stays on the ground, financial gains can be significant. Southwest has one of the shortest response times in the US airline industry. How does she achieve this? Letting everyone receive the information and providing constant communications when the plane is ashore.
This may sound obvious, but other airlines find it difficult to copy the Southwest example. The main reason for this is that making a plane take off is a complex task that requires combined efforts of 12 different functions - from pilot to operations agents. In most airlines, these functional departments do not like to work together. Therefore, they do not communicate much, and any delay that happens generates a rampant search to find a culprit.
In the Southwest, things happen differently. Everyone knows what is happening and everyone gets the same flow of information. In this way, employees can respond to circumstances quickly and effectively, because everyone knows everything. This allows each employee to be able to make better decisions and make better judgments.
In most airlines (and in many other businesses), when problems arise, everyone wants to avoid guilt. With that in mind, no one likes to receive bad news. Southwest uses that in their favor. Your employees are encouraged to report the problems as they arise so that everyone gets involved and can think of the best solution. This subtle change has a major impact on the quality of communication within the company.
Southwest swam against the tide to become the most profitable company in its segment. With the adoption of 10 practical measures, the company managed to grow in a hyper-competitive market. The basis of these measures is relationships, respect, and communication with employees, suppliers, and customers. With this, the company can achieve great results and avoid delays and problems. Learning to deal with conflicts and avoid spending time blaming people for mistakes, instead of correcting them, is the best approach.
Business culture is a very current subject and of great relevance, especially when talking about small businesses and that depend on a great harmony of the team. How about taking a look at the site culturecodes.co, which brings several culture references of renowned companies?
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