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SOUTHWEST AIRLINES

San Antonio lawyer, Herb Kelleher, founded Southwest Airlines in 1966 with one of his clients, Rollin King, at a bar in San Antonio. King came up with the idea of starting a low-fare airline and Kelleher liked it. They doodled a plan on a cocktail napkin and Kelleher put up of $10,000 of his own money to get it started. He is now worth more than 2.5 billion dollars. He fought competitors in the courts to get the airline started and likened these fights to being in the French Foreign Legion. Texas International, Braniff, and Continental tried to stop Kelleher but he was determined to show them that Southwest could be a reality and survive. On June 18, 1971, Kelleher told Lamar Muse, then CEO of Southwest Airlines, to go ahead with schedules flights no matter what the courts decided. Lamar said: “Gee. Herb. What do I do? Suppose the sheriff shows up and tries to prevent the flights?” “So what!” said Kelleher? “Leave tire tracks on his shirt. We’re going, come hell or high water.” This same spirit also le to at least one fistfight with personnel of another airline. One time, some Braniff people went up to the roof of the terminal building at Hobby Field in Houston and hung a sign over Southwest’s to advertise Braniff’s service to Dallas. The Southwest station manager went up there and tried to cut it down with a knife. He ended up getting into a fistfight on the top of the terminal building. According to Kelleher, people are the airline’s most important asset, and they provide legendary service. He states that employees are the the airline’s first customers and passengers are the second. When it was pointed out to Kelleher that mechanics on the graveyard shift could not participate in company picnics, he held a 2:00 am barbeque and several pilots served as chefs. Southwest wants to offer and unique and fun experience to each customer. He also believes that you want to show your people that you value them and that you are not going to hurt them just to get some more money in the short term. Laying people off breeds a lack of trust, a sense of insecurity and a lack of loyalty. Although 85 percent of Southwest’s pilots are members of unions, they identify more with the airline than with their union. As a result, there have been few strikes since Southwest was formed in 1971. Southwest can hire and hold the very best people. Why would you work longer hours than others doing the same job? This is interesting because Southwest pilots fly 80 hours per month compared with 50 hours in other airlines. Southwest pilots are paid by the trip rather than by the hour. As a result, pilots are interested in minimizing the aircraft’s time at the gate, because while at the gate, they are not being compensated. Flight attendants fly 150 hours per month versus the 80 hours for other airlines. The airline does, however, contribute 15 percent of pretax income to all employees’ profit-sharing plans. Flight attendants are also require to make a reasonable effort to tidy up the airplane between flights. Many flight attendants have developed catchy phrases to involve customer in this task. At Southwest Airlines the human resource function is call the People Department, which is crucial to Southwest’s success. According to the department’s mission statement, “recognizing that our people are the competitive advantage, we deliver resources and services to prepare our people to be winners, to support the growth and profitability of the company, while preserving the values and special culture of Southwest Airlines.” The executive vice president of the People Department commented that Southwest can change a person’s skill levels through training, but it can’t change attitudes, so people are hired for their attitudes, not for their technical skills. In fact, the airline rejects about 100,000 applicants a year, and the turnover rate is less than half (about 7%) that of most other airlines. Because its organizational culture is crucial for developing dedication to excellence, a new hire’s first six months at Southwest are a period of indoctrination and mentoring. This time is also used to weed out anyone who does not fit the culture. All new hires attend Southwest’s University for People. During classes, all are told that they have a responsibility for self-improvement and training. Once a year, all employees, including senior management, are required to participate in a program designed to reinforce shared values. Except for flight training, which is regulated by the FAA, all training is done on the employee’s own time. The university operates at capacity, seven days a week. The fun and spirit of Southwest emerge in graduates very early. Creativity, humor, and service are significant aspects of the culture. At the corporate offices, employees have been allowed to work in pajamas for a day. There are also rocking chairs located throughout the building for impromptu meetings and ways to find relief in high-stress jobs. Employees are taught that, if they want customers to have fun, they must create a funloving environment. That means that employees must be self-confident enough to reach out and share their sense of humor and fun. They must be willing to play and expend the extra energy it takes to create a fund experience for their customers. For example, Southwest’s “positively outrageous service” stresses friendliness, caring, warmth, and company spirit. Gate attendants are taught how to play games with customers, such as guess the weight of the gate agent, name three things to do in Tulsa, and who has the most holes in his sock to pass the time if a plane is delayed. Flight attendants are liable to say anything over the telecom. The games are never in poor taste and the winners get a free dinner or a Southwest “fun” hat. Recently, Gary Kelly, Southwest’s CEO showed up at a Halloween party looking like Gene Simmons, the front man for the rock group Kiss. The legacy of Herb seems to be living on. Another characteristic of the strong culture is employee commitment and motivation, which leads to cooperative relationships among employee teams. That is, the majority of employees share the same goals and basically agree on how to pursue them. For example, gate agents and flight crews clean planes along with members of the maintenance department. All share the goal of a 15-minute turnaround, or about one-third of the time needed by competitors. Because of these team-oriented values, the company has few rigid work rules that characterize most of its competitors. At Southwest everybody pitches in regardless of the task. Southwest uses a team measurement instead of individual performance metrics to reinforce the team concept. A team statistic that it uses is percentage of on-time departures. This measurement is the responsibility of all Southwest people at an airport. People from all departments must work together to improve the percentage of on-time departures. There is no finger pointing. Shared knowledge and goals are critical. Just before he retired, Kelleher wrote to all employees and asked them to save $5 per day by cutting nonfuel costs. Employees responded by cutting costs 5.6 percent, or more than $10 per day. In 2001, Kelleher reached the age of 70 and decided to retire. His biggest concern was a successor who would respect Southwest’s culture and who was altruistic. Gary Kelly, who joined Southwest in 1986 as a controller, was chosen. Kelly, who is still Chairman of the Board, CEO and President, insists that he has kept the airline’s maverick spirit that Kelleher created in 1971

1. Describe the culture at Southwest. What type of “personality” does Southwest have?

2. What is Southwest Airline’s purpose, vision, and mission? From what you know or have heard, do they really try to live up to it?

3. Examine what symbols they use on their website to convey their culture to potential customers. Is it effective and why?

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Answer #1

1. The culture of the Southwest is fun, flexible, and driven by team spirit rather than individualism.

In order to achieve its objective of being an economical carrier, Southwest put more emphasis on its people. Their attitude towards work, their flexibility in taking up jobs like cleaning along with other designated work to lower down the turnaround time of the flight.

It was also seen, that during a flight delay, passengers were engaged in a fun manner, in activities, quizzes to lighten the moment.

With major focus, on their people, they have to reject a lot of applicants and the turnover rate is around 7%, which is less than the industry. These employees are taught to create a fun-loving environment and share their sense of humor and fun.

Thus, the personality of Southwest can be considered as authentic with no-frills, fun-loving, and caring.

2. Their purpose is to create a friendly environment and provide their customers with reliable and low-cost air travel.

Their vision goes along the same line of being the world's most loved, efficient, and profitable airline.

And their people's department mission is to recognize the competitive advantage of their people and preserving, growing it to sustain the culture of Southwest.

Yes, they live up to their values, whether it is being the economical flight service and maintaining efficiency with lowest turnaround time or connecting more routes through their point to point service.

The employees also make sure that they deliver what is expected of them and ensure that people spend the best time on the flight.

As mentioned, management also considers employees as their first customer.

Thus, with all this, it can be said that they comply with their mission, vision, and purpose.

3. During the flight delay, the gate attendants can engage people in games like guessing the weight, or three things to do in Tulsa, etc. These games are easy to conduct, are engaging and helpful in making the moment light.

Also, in order to lower the turnaround time, it can be seen that gate agents and flight crews clean planes along with the members of the maintenance department.

Even the top management can be seen involving themselves in the fun activities like CEO showing up at a Halloween party, looking like Gene Simmons.

Additionally, Kelleher asked people to save $5 per day by cutting nonfuel costs and people responded by more than $10 a day.

Even on their website, one can see loyalty and savings programs, a symbol of heart to show care and warmth or saving time by web check-in.

Thus, their symbols are effective which shows economical fare, with great efficiency, and it is effective because it has stayed true to its words in vision and purpose.

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