Its people — all of them from CEO to entry-level grunt.
Since Southwest started in 1971 has grown to 47,000, but what is truly amazing is its employment record over those 45 years.
The most astonishing factoid about Southwest is that it has not had a single layoff in its 44 years—a stunning accomplishment in an industry that leads the economy in bankruptcies, re-organizations, mergers and companies that have disappeared. Think Eastern and Pan Am.
SWA was number 13 on Glassdoor’s Best Places to Work in 2015 and nearly 180,000 people applied for work. What criteria does SWA consider most important?
“We have a passion for what we do and we look for people that share that passion. Our mantra is, we hire for attitude and we train for skill. Since our early days we seek people who don’t just have the skill, but also have the passion and the attitude to take care of each other and to take great care of our customers. We work hard to identify that. Many people want to be a part of a team like this. But many times we’ll have employees that say, “You know what? This just isn’t for me and it’s not the right fit.”
Southwest’s CEO Gary Kelly has been with the company for 29 years, the first 15 as CFO, but doesn’t claim hero status.
In an eye-opening interview Kelly talks about the importance of SWA’s culture as a competitive edge and how it’s been maintained over the decades.
If you’re going to have a team, you’ve got to invest the time to create the relationships. The bigger the company gets, the more effort it takes. We use a variety of techniques to do that. Right near my office is a group called Internal Customer Care that keeps track of important things happening in our employees’ lives. (…)I get a pile of thank you notes and in turn I send out thank you notes. It’s creates a very human connection. It’s basic, but very meaningful. That’s why we put the heart symbol in our logo. We’re not the American Heart Association, but our employees believe in the heart and when we deviate from living by the golden rule, people call each other on that. It makes for a very powerful culture.
In short, management spends time walking as opposed to time talking.
Read the interview. While you/your company may not have the money to match Southwest’s benefits, you can certainly create the relationships.
Culture is recognized as the “make or break” for companies of all sizes, so it’s logical for bosses at all levels to look for insights on creating and retaining a winning culture.
They know that certain behaviors and actions must be actively managed, as well as made visible to the organization at large.
Companies with the most effective culture seek out and continually reinforce what Charles Duhigg, author of The Power of Habit: Why We Do What We Do in Life and Business (Random House, 2012), calls “keystone habits.” A keystone habit, Duhigg has noted, is “a pattern that has the power to start a chain reaction, changing other habits as it moves through an organization.” Companies that recognize and encourage such habits stand to build cultures with influence that goes beyond employee engagement and directly boosts performance.
The inherent problem that accounts for why these cultures are rarely created and, when they are, don’t have the lasting power bosses would like to see is a long way from rocket science.
The problem is, in fact, extremely simple.
Culture is more talked than walked.
Good cultures require well-thought-out, planned conscious effort.
And not just at conception, but for as long as they exist.
And sustained, well thought-out, planned, conscious effort requiring ongoing hard work is not the hallmark of most companies from startups through the Fortune 50.
I don’t think I’ve ever watched a show on TLC (a unit of Discovery Channel), but I plan to this spring; even more surprising to me is that it’s a reality show.
A reality show about great corporate culture in an industry known for the opposite.
“We were interested in working with Southwest,” said Dustin P. Smith, vice president of communications for TLC, “as it is one of the largest airlines in the country and is known for its exuberant corporate culture and for having refreshing and personal customer service that is regarded as unique in the industry.
I doubt that anyone who travels is surprised at the choice of Southwest; and certainly not Southwest.
Ashley Dillon, a spokesperson for Southwest Airlines, said the airline was chosen also because of its tradition of transparency, which relies heavily on the use of social media, blogs and other media.
In a 2009 post citing the airline’s success even during the height of the recession I linked Southwest’s and Zappos’ success to the same core cultural belief—happy employees (one Southwest flight attendant even rapped about its GAAP results).
They stowed drugs in secret panels inside planes; stole laptops, lobsters and fine clothing flown as freight; and rifled through passengers’ belongings for perfume, liquor and electronics.
Passenger losses in 2009 totaled 5.3 million dollars and for the last eight years American Airlines was the source of more reports than any other airline.
“What percent of American Airlines employees would you say engaged in this conduct?” a federal prosecutor, Patricia E. Notopoulos, asked Matthew James, a defendant in the case who pleaded guilty and testified for the prosecution. “About 80 percent,” Mr. James answered.
Of course, management claims it’s just a few bad apples.
Over the years I’ve read about and listened to hundreds of reasons why creating a culture that keeps employees happy just can’t be a priority— productivity and profit are the top priorities.
Obviously, they haven’t found the correlation, in spite of the high-profile examples that abound.
Is culture sustainable? Ask Jim Sinegal who, over 28 years, took Costco from $0 to $78 billion and built it into a global powerhouse without catering to Wall Street—workers have health benefits, margins are 14% (15% for house brands) and the price of a hot dog and drink hasn’t change since 1985. Does it work?
Shares of Costco have risen nearly 40 percent in the past year, whereas Wal-Mart shares are up just 6 percent even though the world’s largest retailer enjoys a gross profit margin of close to 25 percent compared with Costco’s 10.8 percent. Shares of another competitor, BJ’s Wholesale Club Inc (BJ.N), have risen about 21 percent over the last year.
Any day you look you’ll find an account describing problems in the money-losing airline industry. But if you keep looking you’ll also find bright spots, such as Southwest and Jet Blue, whose cultures engage their people’s passion and that translates directly into dollars.
A 2009 study by Gallup found that companies in the top decile for employee engagement boosted earnings per share at nearly four times the rate of companies with lower scores.
What do 3M and Virgin have in common? Cultures that invite, enable and revel in creative employees—intrepreneurs—that drive innovation, profits and keep their new product pipelines packed.
3M is 109 years old, the company continues to churn out new products like a young startup which explains why 31% of 3M’s 2010 revenues came from products that were developed during the past five years.
“Virgin could never have grown into the group of more than 200 companies it is now, were it not for a steady stream of intrapreneurs who looked for and developed opportunities, often leading efforts that went against the grain.” –Sir Richard Branson
Finally, and mostly to give you a laugh, here are the totally obnoxious actions from some of today’s truly monster egos.
Innovation and entrepreneurs, subjects that offer some of them most fascinating stories around. And although they often merge to form new business, there is plenty of innovation inside existing companies, too.
I have four such stories for you today, all on wheels.
On the high end we have two airlines, Air New Zealand and AirAsia.
Coach innovations helped Air New Zealand win the Air Transport World Global Airline Awards, AKA the airline Oscars. Innovations include Premium Plus Economy with more inches of legroom, special dinning options, in-flight concierges; completely re-designed coach seats, including eleven rows of three seats on each side of the cabin dubbed “Skycouches”, Snacks on Demand, three course meals, onboard events, such as wine tasting, a destination seminar or kids story time using the 23″ mounted galley monitor.
Once upon a little boy told his father, “One day I will own an airline.” The boy grew up to be Tony Fernandes, CEO of the Malaysia based budget airline, with 80 aircraft that fly to 122 destinations. AirAsia is growing, primarily because, as Fernandes says, “Each growth spurt has always come at a time of calamity for the airline business. I think the best time to build a brand is in times of recession.”
The next wheels are far smaller. They belong to Vickie Nolting, a hair salon manager who, in 1999, found work/life balance by creating a successful business called Hair On Wheels, providing on-site haircuts to such companies as DigitalGlobe, Intrado, Seagate and the U.S. Department of Commerce in Boulder, Colorado. These days Nolting has a staff of 15 part-time stylists, four vans and a PT Cruiser.
Our final look at innovation is also focused on cars, but they are parked. Parking lots take enormous space, but that’s not necessary. Using technology, their size can be cut 80% and still create a far more safe and friendly user experience. Just watch.
Thursday I wrote Too Busy to Manage, on the idiocy of eliminating not only bonuses, but also positive feedback, and I have more excellent incentive information for you today.
First is a forward-looking article from Wharton about how and why—shocking thought—incentives should focus on the long-term. Wow, I didn’t even know anybody in the US could spell long-term.
Another wild idea from WSJ Online suggests that “the best way to keep them from leaving is to prepare them to do just that.” Check them out, you may be surprised.
More surprising news courtesy of Steve Roesler. “Men may be more willing than women to sacrifice achievement goals for a romantic relationship. This according to a new study by Catherine Mosher of Duke Medical Center and Sharon Danoff-Burg from the University of Albany.” Actually, ‘surprising’ is a gross understatement.
My last pick was chosen to add some levity to your day. Would you write an advice columnist if your openly part-time hooker co-worker was turning tricks on company time and then brought her other job to the office. “What really got me upset was when my co-worker was having sex with a client in our public restroom.”Read the whole story and tell me if you think it’s for real.
I don’t DO social networking, but I read a lot about it and I thought I’d share some of the more interesting items I’ve come across lately.
As I’m sure you all know, more and more companies, such as Ford, Southwest Airlines and Pepsi, are using social media both internally and externally.
When companies use new technologies they need to create policies regarding them for their employees.
And when they write policy they tend to do it in a self-generated vacuum, ignoring the larger world in which they function and the culture that has grown up around them. The result is often a fiasco as CNN recently learned.
Finally, I’d like to introduce you to my buddy Phil Gerbyshak. He’s a social media guru and if you’re interested in learning about stuff like Twitter click the link. Phil explains not only the how but the why behind using social media and can help you keep your cyber foot out of your online mouth.
But Phil isn’t a social media ideologue and is willing to share the other side of the equation—even when he doesn’t agree. Heh heh. I think he was thinking of me when he posted this video.
Next up is an article from Clark Bosley who asks the companies he visits, “Do you have a copy of your company’s code of conduct?” Read what the answer portends.
Finally, a bit of cultural levity. We all know that Southwest Air Lines has a great culture, which now includes rapping flight attendants. But they aren’t the only ones, if you want more click here.
Entrepreneurs face difficulties that are hard for most people to imagine, let alone understand. You can find anonymous help and connections that do understand at 7 cups of tea.
Crises never end.
$10 really does make a difference and you’ll never miss it,
I don’t think I’ve ever watched a show on TLC (a unit of Discovery Channel), but I plan to this spring; even more surprising to me is that 
Is culture sustainable? Ask 
Thursday I wrote 
As I’m sure you all know, more and more companies, such as Ford, Southwest Airlines and Pepsi, are 
The first is a new article from Malcom Gladwell, author of 
