January 27, 2012
Building a Performance Culture through Engaged Employees: Part 2
BY Mary Mahoney
Southwest is widely recognized not only for delivering unique customer experiences, but also for creating a motivational culture.
In 1971, Herb Kelleher reinvented air travel when he founded Southwest Airlines as a low-cost airline with a sense of humor that encourages employees to have fun on the job and customers to have fun while traveling.
Now, 40 years later, Dallas-based Southwest Airlines is the largest airline in the United States based upon domestic passengers carried. It’s also one of the safest airlines in the world and receives some of the highest marks in the industry for service, on-time performance and lowest employee turnover rate.
Just as with The Ritz-Carlton Hotel Company, Southwest is widely recognized not only for delivering unique customer experiences, but also for creating a motivational culture.
Kelleher, the founder and former president and chief executive officer, gained a reputation for hijinks, including singing rap tunes to his staff and poking fun at airline culture.
But he primarily is remembered for his management philosophy on service. “You have to treat your employees like customers,” he said. “When you treat them right, then they will treat your outside customers right.”
Southwest remains loyal to that philosophy. As current President and CEO Gary Kelly said, “Our people are our single greatest strength and most enduring long-term competitive advantage.” And he promotes this philosophy right on the home page of his company website.
With more than 37,000 employees, Southwest Airlines “gets it” when it comes to teaching employees to deliver positive emotional experiences.
Kelleher’s tradition of encouraging fun on the job remains a priority. The company realizes that if its people have fun on the job, they are more likely to come to work with a positive attitude and deliver superior customer service.
Southwest’s leadership also engages employees regarding the company’s finances and emphasizes their importance to the bottom line. The airline has an open culture of inclusion at all levels and employees are trained to understand their roles in providing great service and keeping costs in check.
Certainly there are other factors that contribute to Southwest’s success. Among others, the airline maintains a solid business strategy with low fares and travel perks (your first two bags fly free). The airline also awards stock options to employees to encourage a sense of ownership.
Colleen Barrett, president emeritus of Southwest Airlines, partnered with best-selling business author Ken Blanchard to write a new book on the airline’s best practices, Lead with LUV: A Different Way to Create Real Success (the LUV comes from Southwest’s stock symbol, LUV).
When asked if she worried competitors would steal her management ideas, Barrett demurred, saying, “the real magic isn’t in knowing the concepts, it is in doing the work.” For Barrett, “doing the work” is the underpinning of Southwest’s model of good management.
Seven key elements serve as the backbone for Southwest Airline’s employee motivation philosophy:
1) A strong set of values: The top three are employees, customers and stakeholders.
2) Employees come first: All employees are highly valued and respected as individuals, which in turn, engenders strong feelings of mutual belief, trust, and motivation to perform.
3) Rewards and recognition: By profusely rewarding its employees for excellent performance, Southwest maintains loyalty, job satisfaction and high levels of personal motivation.
4) Mission: “The mission of Southwest Airlines is dedication to the highest quality of customer service delivered with a sense of warmth, friendliness, individual pride, and company spirit.”
5) Hiring: The airline has a very stringent hiring process and goes to great lengths to ensure that they hire the best of the right candidates, often acquiring talent from outside the industry. Southwest qualifies a customer service candidate for employment based on attitude, not experience. The company believes that it can teach a person how to deliver quality service, but attitude must be brought to the job.
6) Distributed Leadership: The company follows a broad-base leadership model, insisting on diverse and senior leadership at the top and throughout the management hierarchy.
7) Performance Management: Three dimensions of performance are measured with rigorous tracking: Employee well-being, customer satisfaction and shareholder gain. Individual performance is rewarded and clear, immediate feedback is provided for performance improvement.
It is remarkable how training and a positive culture can contribute to a company’s bottom line.