Full version Southwest Airlines

Southwest Airlines

This print version free essay Southwest Airlines.

Category: Business

Autor: reviewessays 27 April 2011

Words: 3358 | Pages: 14

Southwest Airlines: Spreading the LUV

There is no question that Southwest Airlines is a phenomenon in the airline industry and an icon in the business world. No other U.S. airline has come close to matching their history of profitability. Business leaders and academics alike strive to understand what makes this company so different from its competitors while many attempt to mimic their success. Using our newly developed perspectives on organizational behavior, we have examined Southwest Airlines through a selection of the psychology, communication and leadership frameworks we have studied throughout this quarter.

There are many reasons Southwest has risen well above its peers. From the trademark “one-liners” that come from the cockpit to the unconventional uniforms and costumes, this is an airline that prefers to color “outside the lines.” Employees, hired for their attitudes, become part of a family that nurtures their self-esteem and satisfies many of their innate human needs. Southwest practices open communication with its “family members”, resulting in unusually favorable relations with its labor unions. Lastly, this is a company of leaders being led by leaders of all styles as embodied by the captivating style of the company’s founding president and CEO, Herb Kelleher.

Each of these aspects sets this company apart from other airlines, and has contributed to its unbelievable success. As a result of this analysis, we will provide an explanation of how a company that puts customers second can be so wildly successful, and highlight the importance of understanding organizational behavior.

PSYCHOLOGICAL

Hiring for Attitude

While most companies have a Human Resources or Personnel department, Southwest depends on its “People” department to select the right people to fill the Southwest uniform.

In the book Nuts, the authors conclude that Southwest hires for attitude and trains for skills (Freiburg, 1998). In this book, Kelleher is quoted commenting on the type of person the company recruits:

“We look for attitudes; people with a sense of humor who don’t take themselves too seriously. We’ll train you on whatever it is you have to do, but the one thing that Southwest cannot change in people is inherent attitudes” (Freiberg, 1998)

This is an area in which Southwest just will not compromise. There is a firm belief at SWA that the company is defined by its people, and they go to great lengths to ensure they are hiring employees who fit the Southwest mold.

In Chapter 5 of our textbook, we were presented with “The Big-five Personality Dimensions.” Based on our research, we began to see a picture emerge of the personality of a typical SWA employee and chose to measure them along these dimensions. (Champoux, 2006)

High in Extroversion- Talkative, active, sociable, assertive, gregarious

High in Emotional stability- Calm, relaxed, secure

High in Agreeableness- Cooperative, tolerant good natured, courteous, caring

High in Conscientiousness- Dependable, organized, responsible, hard-working

High in Openness to Experience- Curious, intelligent, creative, imaginative

Southwest has defined the type of personality they desire, and they work hard to find employees who exhibit these personality traits. The benefit of hiring for personality or attitude is that this is more difficult for a candidate to hide or play a role in an interview. In a story related in the book Nuts, a highly decorated military pilot applied to the flight department. While traveling to Dallas on Southwest for his interview, the pilot was rude to the customer service agent and cold and arrogant when he arrived and spoke to the receptionist. Despite his excellent resume and decorated flight record, his attitude was simply not a fit for the company, and he was quickly dismissed. This is a clear example of how attitude trumps skill in SWA hiring practices.

Self Esteem

Southwest Airlines has done an excellent job promoting employee self-esteem. A company will receive huge benefits by taking time to focus on improving employee self-esteem. An individual’s low self-esteem results in low confidence and negative feelings, which will eventually overwhelm the individual. These negative feelings will affect the individual’s quality of work, productivity and overall health.

There are two needs that fulfill a person’s self-esteem. The first is a sense of belonging or love. The second need is territory or a person’s individuality. Individuality is what separates a person from the herd. It focuses on the individual’s ethics, morals and spirit.

A person can relate these needs to the self-esteem sausage. The self-esteem sausage is made up of two parts. One half is love and the other half is individuality. In order to have a healthy self-esteem, a person must have a full sausage with both ends well-balanced.

Southwest airlines focuses on keeping its employees’ self-esteem sausages balanced. In order to keep the love half in balance, the company focuses on creating a home or family within the organization. Employees are not afraid to hug each other. Instead of handshakes, introductions are done with hugs (Culberson, 2004). Southwest Airlines is not afraid to talk to their employees with emotion and tell them that the company loves them and wants to make sure they are happy. The company’s goal is to have employees retire and tell their grandchildren that working at Southwest Airlines was one of the finest experiences they ever had and that it helped them grow beyond anything they thought possible (Kelleher, 1997). Southwest Airlines number one priority is their people. This strong focus on their people and creating an atmosphere that focuses on love helps fulfill the employee’s need for belongingness.

Southwest Airlines also makes sure to promote employee individuality. The company’s core values focus around fulfilling an employee’s need for individuality. Some of these values include; individuality, ownership, fun, family and equalitarianism (Freiberg, 1998). The company promotes uniqueness through letting employees be themselves when they come to work. The company doesn’t want the employees to have to change their personality and become extremely formal or conservative in the work environment. Southwest Airlines also creates a fun environment for its employees. The company prides itself on practical jokes among the employees and its gallery of fun photos displayed at headquarters. Finally, employees are given ownership of the company. Each employee is empowered to make suggestions and implement change. The company takes the time to listen to employees.

Southwest Airlines contributes its huge success to its employees. The company focuses on building an organization in which personality counts as much as quality and reliability (Kelleher, 1997). Employees learn to respect one another and the company focuses on the two key aspects of the self-esteem sausage, love and individuality. The company’s values and goals help to keep its employees self-esteem sausages in balance, which leads to greater employee satisfaction and performance.

One of the reasons for Southwest’s success is the way that the company handles its employees. Kelleher says “when people derive enjoyment they tend to work together better, they tend to be more productive” (Bird, 2003). An affect of this philosophy, according to Vice President of People Libby Sartain is that Southwest has a lower turnover rate than other airlines (Gittell, 2001).

Maslow’s Hierarchy

Southwest has been able to maintain a jovial work environment because they have met the needs of their employees. Abraham Maslow’s Hierarchy of needs provides an excellent analysis mechanism for examining Southwest’s success. Maslow argued that human needs could be based on five specific hierarchical categories: physiological, safety, belongingness, esteem and self-actualization. Physiological needs can be defined as the basic human requirements such as food and water. Safety needs include the desire to be protected from harm, while the belongingness need refers to the human want to give and receive love. Esteem and self-actualization relate to a person’s self confidence and desire for self-fulfillment, respectively. Maslow further argued that the “five needs formed a need hierarchy according to their prepotency” (Champoux, 2006). He believed that once a lower need is satisfied, a human’s behavior “focuses more continually on the satisfaction of higher-order needs, which happen throughout daily living” (Champoux, 2006).

For a company to be successful its employees must have their existence needs (physiological and safety) and their relatedness needs (belongingness) satisfied so that they can focus on esteem and self-actualization. Southwest’s corporate approach towards employees is designed to satisfy the existence and relatedness needs, and encourages employees to focus on the esteem and self-actualization, or growth, needs.

From an employee perspective, the existence needs can be at least partly satisfied if they have a secure and well-paying job. This type of job security typically occurs with a stable growth company. To that end, Southwest has met their employees’ existence needs on the following levels:

1) The airline has been profitable for 28 years straight

2) Southwest implemented a no lay-off strategy after the catastrophic events of 9/11, while other airlines laid off a combined 50,000 workers

3) Southwest was the first airline to offer a profit-sharing plan

4) Southwest’s corporate strategy identified employees as more important than customers or shareholders.

But Southwest does not stop with satisfying existence needs. On the relatedness level, they strive to maintain a family environment. At their headquarters in Dallas, the walls are dotted with more than ten thousand picture frames containing photos of employees' pets, of Herb dressed like Elvis or in drag and of Southwest planes gnawing on competitors' aircraft (Serwer, 2004). This type of display could be called a family scrapbook rather than a typical corporate headquarter art exhibit. Additionally, according to Chief Operating Officer Colleen Barrett, “We celebrate everything. It's like a fraternity, a sorority, a reunion. We are having a party!” (Serwer, 2004).

With the existence and relatedness needs met, Southwest employees can focus on the more corporate-relevant needs of esteem and self-actualization, and the company helps in this regard as well. Southwest has an empowering suggestion policy that bolsters the esteem needs of an employee because a response is always returned within 1 week. “This kind of environment creates a corporate culture where people feel comfortable talking with anyone, sharing ideas, and posing questions on a problem” (Cohen, 2005). Additionally, Southwest encourages focus on their employees’ self-actualization by maintaining a high number of front line supervisors. Southwest maintains a manager to employee ratio of 10:1 (Gittell, 2001).

By focusing on the satisfaction of employee existence and relatedness needs, and then encouraging the development of the growth needs, Southwest is able to maintain a low level of employee turnover in an industry that is ripe with layoffs.

COMMUNICATION

Southwest Airlines management team has used effective and open communication to maintain a happy and productive work force from the company’s inception. The groundwork for this communication effort lies in the approach to labor relations that Southwest has adopted. With 90 percent of the airline’s workforce organized into one labor union or another, it is essential for Southwest to maintain positive and sincere channels to communicate changes in corporate goals and strategies.

From day one, Southwest realized that labor relations would be a critical component to the future success of the airline. With this fact in mind, senior leaders adopted a revolutionary approach to the age old issue of organized labor; they welcomed and even encouraged the presence of labor unions in the business model. This new method of dealing with organized labor allowed both sides of the issue to move away form the classic adversarial relationship between management and organized labor and towards a merger of success and goals for both sides (Kochan, 1999). Both sides have worked hard to maintain the open lines of communication to ensure common goals and objectives that have helped Southwest maintain its edge in the competitive airline industry.

The first achievement in this advanced relationship was the elimination of rigid structures between unions and management outside of the necessary formal negotiations and grievance process. This informal approach has allowed both sides to initiate conversations and convey concerns without the usual negative consequences of formal labor-management relationships. When questions were raised by employees about how Southwest was implementing the Family Medical Leave Act, the company help briefing sessions to clearly communicate how the company was complying with the act and inform employees of new benefits relating to the act. From the management side, when changes and updates are made to the benefits package, informal conversations are held with labor leaders to explain the need for the changes and what effect it will have on the collective bargaining agreements (Kochan, 1999). This approach gives both sides a sense of trust in each other and helps maintain a positive atmosphere throughout the company.

The second major development Southwest has made in labor communication is between front line workers and senior management. Several times a year managers visit various locations to meet with front line workers. These meetings have no set agenda and are simply an opportunity for employees to voice concerns to top managers in the company. This tactic has several benefits for the company. First, it offers employees a direct line of communication to top managers, giving employees a feeling of inclusion in the decision making process. This process also helps to ensure that employees feel their needs and concerns are heard and addressed. These meetings have a very important impact on mangers as well. Through these meetings with front line employees, new managers are introduced to the unique culture that is Southwest Airlines (Kochan, 1999). In addition to educating new managers, these meetings keep top mangers close to the everyday issues that confront the airline making sure that they never lose sight of the ultimate goal; a happy customer.

LEADERSHIP

Herb Kelleher helped build Southwest Airlines into the successful business that it is today. He is considered a top business leader for several aspects. After examining his leadership style, it seems that he may be classified as a charismatic leader. Charisma comes from the Greek word meaning gift. Not everyone has a charismatic leadership style. The employees of Southwest Airlines had strong positive feelings about Kelleher, which relates to the personal basis of leadership, referent power and charisma.

There are several reasons why Kelleher can be considered a charismatic leader. The first is he created an emotional attachment from the employees within the company. Employees trusted Kelleher and he generated intense loyalty to himself and the company (Inkpen & DeGroot, 2005). Executives were willing to work for significantly smaller salaries than competing airlines. These employees supported the company’s beliefs and caring culture that Kelleher created. Another example is the pilots willingly giving up salary increases in return for stock options. This concession helped Southwest Airlines continue to be profitable in a declining industry. It also demonstrated the close emotional tie the pilots have to the company. They are willing to sacrifice pay increases in order to help the company grow.

Finally, Southwest Airlines has created a strong relationship with the company’s labor unions. The company doesn’t struggle with long labor disputes. The employees and Southwest Airlines executives cooperate and continue to strive for a healthy and caring work environment. These examples show that the employees of Southwest Airlines have committed themselves to the mission of the company. This commitment stems from their emotional ties to Kelleher’s strong charismatic leadership style.

Leaders Leading Leaders

As we learned more about the leadership culture at Southwest, we were reminded of Tre Cates of Silicon Mountain Magic who told us about his company’s philosophy of hiring leaders in all levels of the company. From the beginning, Southwest has rejected the typical hierarchical corporate structure where leaders only exist at the top, and everyone else is a “follower.” At Southwest, leadership is not determined by position or title to any extent. In their book NUTS, Kevin and Jackie Frieburg offer the term “leader-collaborator” as more descriptive than the more typical “leader-follower” to describe the dynamics they observed at Southwest. Southwest employees are empowered to act at all levels of the organization. The unusual “Fuel from the Heart” program was not a management team directive. Instead, employees at all levels of the company identified that the company they loved was struggling due to high fuel prices, and many choose to take voluntarily pay decreases to help offset the higher fuels prices and help ensure the survival of their company.

In another example, employees from several different organizations within the company formed an internal action team to research a way to reduce the company’s dependence on major reservations systems that were owned by their competitors. One by one, the competitors were excluding SWA from these systems as they launched Southwest Airlines clones. By the time Jim Kelleher announced in frustration to the American Society of Travel Agents that Southwest would be the first airline to go ticket-less, the entrepreneurial group was already well on their way to developing a feasible system.

Southwest believes that those on the front line are best able to recognize issues and problems and devise solutions to do what’s right for the company. These examples show that Southwest has hired leaders at all levels of the company who are capable of recognizing problems, and has empowered everyone to make the changes they see fit. As a result, Southwest is able to quickly adapt and thrive.

CONCLUSION

Southwest Airlines is considered the most successful airline company in the industry. It has built this success not only from strong business plans, but also through strong leadership and an overwhelming focus on its employees. Southwest takes measures during the hiring process to ensure that they hire not only based on experience and skills, but also attitude. The company seeks people with particular personality traits that will fit the company culture.

Another key to Southwest’s success is the company’s dedication to make its employees the number one priority. This helps balance the employees’ self-esteem sausages, which leads to greater productivity and quality of work. In addition, the company also realizes and understands Maslow’s hierarchy of needs. It focuses on satisfying employee needs leading to low turnover and high employee satisfaction. To keep employees satisfied the company also exhibits strong open communication. This open communication has helped Southwest create a solid relationship with its labor unions. Through this relationship the company has teamed with its employees to accomplish shared goals.

Finally, Southwest can attribute a large portion of its success to its views concerning leadership. Herb Kelleher used his charisma to get the employees excited and emotionally tied to the company. This leadership inspired employees to willingly give up pay increases in order to help the company succeed during a tough business year. Kelleher also helped build a company that focused on hiring and building leaders not managers. His unconventional approach to empower all employees to be leaders has made the organization successful. Through the strong leadership, strong communication and strong employee focus, Southwest Airlines continues to grow and is considered one of the best companies to work for in America.

References

Champoux, J. (2006). Organizational behavior: integrating individuals, groups and organizations. 3rd ed. Mason, OH: Thomson South-Western.

Culberson, R. (2004). LIGHTENing Bolts, Humor at work – An Interview with Southwest Airlines. Retrieved November 2, 2005 from www.funsulting.com.

Freiberg, K. & J. (1998). Nuts! : southwest airlines' crazy recipe for business and personal success. New York: Broadway Books.

Inkpen, C. & DeGroot V. (2005). Southwest Airlines 2005. Thunderbird Garvin School of International Management.

Kelleher, H. (1997). A Culture of Commitment. Retrieved November 2, 2005 from www.pfdf.org.

Kochan, T. (1999). Rebuilding the social contract at work: lessons from leading cases. #WP09 ed. : Institute for Work and Employment research, MIT Sloan School of Management.