Southwest,
Ryanair and easyJet are the only three airlines that retained investment-grade
ratings from S&P Global Ratings, after the credit rating agency downgraded
a host of carriers and slowed the pace of its air travel recovery forecast. In
a report published last week, S&P analysts said that superior ratings come
from the low-cost model, “robust liquidity”, and greater relative exposure to
healthier short-haul and leisure markets.
What this
kind of rating don’t tell us is that the superior ratings come mostly from immeasurable
values which are beyond hard facts, things that drive sustainable growth and
success, like leadership, culture, relationships with employees and passengers.
This is what the unwavering success of Southwest is made of. Unlike any other
airline, it has been profitable every
single year between 1972 and 2019, and this year it tops the league of the most
successful airlines in times of extreme uncertainty.
These are
the kinds of things that cannot be copied or enforced by any kind rules. It is
all about setting the overall framework and the right tone that radiates from true leaders. Herb
Kelleher, ex CEO and co-founder of Southwest Airlines and his team have shown
us the way and generously shared their experiences.
Here are
some quotes from Herb’s interviews that I hope will be more deeply heard at
this unsettled time. And more importantly, inspire so much needed actions to
adapt to the new circumstances in the way that will speed up the recovery:
On strategy
Herb Kelleher
liked to say, “We have a strategic plan. It’s called ‘doing
things.” He
never allowed himself to become bogged down by too much strategic thinking or
analysis paralysis. He believed that all he needed was an overall framework.
Nothing more. And he came up with something very basic. For Southwest Airlines,
his vision and the basis for this framework was simple; low cost, superior
service, people first.
"This framework
approach gives a long-term horizon. It liberates from the contingencies of the
moment. At a time when everything is created, deployed, and measured in real
time, strategy and execution are one. Sequential thinking, which requires
putting strategy first and execution second, is becoming more and more
outdated, even irrelevant. Today’s business relies on a constant back and forth
between the two."
"Because
you can’t really be disciplined in what you do unless you are humble and
open-minded. Humility breeds open-mindedness — and really, what we try to do is
establish a clear and simple set of values that we understand. That simplifies
things; that expedites things. It enables the extreme discipline. When an issue
comes up, we don’t say we’re going to study it for two and a half years. We
just say, “Southwest Airlines doesn’t do that. Maybe somebody else does, but we
don’t.” It greatly facilitates the operation of the company. "
"When planning became big in the airline community, one of the analysts
came up to me and said, “Herb, I understand you don’t have a plan.” I said
that we have the most unusual plan in the industry: Doing things. That’s
our plan. What we do by way of strategic planning is we define
ourselves and then we redefine ourselves."
On
leadership
“As far as leadership is concerned, I think that everybody needs to be a
leader in order to have a successful company. Because everybody, by
example, sets a leadership standard. I don’t care whether you’re checking bags
or loading them in the bin or no matter what you’re doing. You’re setting
a standard for other people and we want people to all, all our people to be
leaders. We think everybody is a leader no matter what their job is. We
want everyone to be a leader. They’re setting an example by their conduct and
they should be inspirational.”
On who comes
first
“Employees came first, customers second, shareholders third. If
the employees serve the customer well, the customer comes back, and that makes
the shareholders happy. It’s simple, it’s not a conflict, it’s a chain.
If you treated the employees well, if you cared for them, if you value them as
people, if you gave them psychic satisfaction in their jobs, they would really
do a great job for the customers and the customers would come back, which would
be good for the shareholders. Most companies didn’t operate that way. So, we
turned the pyramid upside down, in effect, and said the employees come first
and they always have. Not just in our minds but in our hearts as well.”
“We’re
perfectly happy with having, generally speaking, the highest pay for employees
in the domestic industry. They reward us with tremendous productivity, which
lessens the effect. And the other airlines disadvantaged their people. I’m not
saying they didn’t have to, in the sense of “either we do this or we fail,” so
it’s not a criticism. I’m just talking about the economic effects of it.”
On company 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."
On learning it by doing it
"I learned it by doing it, and I was scared to death."
So, here we
are, facing the biggest leadership challenge ever! The question is,
can we get anywhere close to this kind of culture with minds stuck in the
legacy world?
Of course, we can start moving towards it if we become open to rechannelling
the work and information to their natural flow. The opening starts with the
engagement of employees through creation of space for collaborative hubs and
opportunity scans supported by latest technologies. These are the things
that have been at the heart of my consulting work, that I have written and
talked about and described in my book.
