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Herb Kelleher was the longest serving CEO in the airline industry. A charismatic leader, highly popular with managers, employees and the press, he created a unique culture and leadership style at Southwest Airlines. As he approached retirement, there was much anxiety among Wall Street analysts, other industry observers and employees about how Southwest Airlines would fare following his departure in 2001. We examine the successful change in leadership at Southwest Airlines over the last few years and highlight the contributing factors that led to a seamless transition.
Southwest Airlines is a remarkable company. It has sustained a steady 10–15% rate of growth over the last 30 years and turned a profit in every year after its first. In an industry that regularly loses billions of dollars, this is quite extraordinary.
Ability to Build and Maintain Quality Relationships
Jody Gittell[1] conducted field research into the airline industry over a period of eight years. Gittell concluded that Southwest Airline’s most distinctive characteristic is its ability to build and maintain quality relationships among managers, employees, business partners, unions and suppliers. These relationships are based on:
- shared goals
- shared knowledge
- mutual respect
The quality of these relationships provide the foundation for competitive advantage, through good times and bad, and is widely regarded as the most essential factor contributing to Southwest’s success.
Kelleher’s Leadership Style
Kelleher’s leadership was critical in shaping this unique culture. He helped to develop the organizational practices that strengthen relationships and his personal actions exemplified to employees the importance of relationships. Kelleher has often been described as a charismatic leader.
A charismatic leader…
‘… has the ability to relate the mission of the organization to deeply rooted values, ideals and aspirations shared among followers, thus giving the work of the organization more meaning than it would otherwise have.’ Robert J House.[2]
That sense of mission, if strong, will remain with the organization as a legacy.
However, there is always a risk to an organization’s ongoing success when a charismatic leader leaves; especially one that has played such a critical role in shaping the culture. Gittell highlights two vital features of leadership effectiveness, along with various actions Kelleher and his management team implemented to ensure his legacy was sustained:
- Leading with credibility – ability to inspire trust
Kelleher and his top management team have excelled at gaining the trust of managers and frontline employees. They have built trust over time by being up front and consistent in their message. This level of honesty is respected, “If it’s bad, they tell you it’s bad.”
Leading with caring – ability to inspire a belief by employees that their leaders care deeply about their well-being
Gittell quoted many examples of sincere praise for Kelleher from employees and managers which demonstrated their respect and support. One pilot said, “He is one of the inspirations for this company. He’s the guiding light. He listens to everybody. He’s unbelievable when it comes to personal etiquette. If you’ve got a problem, he cares.”[3]
The top management team reinforces this level of caring that is beyond the norm. Their accessibility is instrumental to this perception.
The level of caring is also demonstrated by a willingness to forego short-term success for strong, long-term relationships. For example:
Following September 11, other airlines laid off thousands of employees. Southwest was the only airline to retain all employees. This investment paid off and Southwest kept its unblemished record of growth and profitability.
Kelleher’s successor, Colleen Barret, is also highly regarded as a caring leader. This comment by a customer service agent was typical, “Colleen is the greatest. She spreads the Southwest spirit. She’s adamant about it.”
How Southwest Achieved a Successful Transition
Kelleher planned for his retirement several years in advance. Many of the foundations for a successful transition were put in place during the years leading up to his departure as CEO.
- Selected the right leaders
Kelleher was careful to select the right leaders for his top management team. It was essential that they mirrored his value set so that the spirit would carry on.
- Invested time in a cohesive top management team
The top management team invest their own valuable time in building relationships with one another. This can mean lengthy meetings. However, the managers believe this investment is worthwhile and has resulted in a cohesive, well functioning, top management team that will not allow itself to be torn apart by jealousies related to succession. Gittell observed managers from different business areas speaking knowledgably about issues beyond the expertise suggested by their titles. The unity was also evidenced by managers repeatedly building on each others’ thoughts. This ongoing conversation is one important way Southwest achieves shared goals, shared knowledge, and mutual respect across functional divisions. It saves time and money in the long run by nipping in the bud functional disputes which can slow down implementation of policies and decisions.
- Transferred unity throughout
Solidarity at the top is infectious and can directly influence coordination on the front line where customer service is delivered. Exceptional customer service, of course, is directly linked to Southwest’s unwavering performance.
Kelleher planned for his successor a long time in advance of his retirement. He “… wanted someone who would be respectful of Southwest’s culture and would be the sort of person who was altruistic in nature.”[4]
Invested Time Building Relationships Throughout
A great deal of time and energy was also invested in building relationships between top management and frontline employees and among these employees. This appears to have paid off, judging by the number of testimonials from individuals throughout the organization consistently describing feelings of trust and support.
Invested in Frontline Leadership
“The most influential leaders in our company – aside from Herb [Kelleher] – are the frontline supervisors.”[5] Although Southwest has a flat structure, it has the highest supervisor-to-employee ratio in the airline industry. This enables supervisors to work side by side with their direct reports and take on a ‘player coach’ role – i.e. they have managerial authority and also perform the work of frontline employees. The benefits include:
Benefits of player coach supervisors
- increased familiarity with the work of their team members
- more frequent and intensive interaction with direct reports, enabling them to reduce barriers and build shared goals
- more time to provide support, feedback, encouragement, recognition and coaching
- richer sharing of information and ideas
- greater credibility and respect
Conclusion
Far from being a soft approach to management, Southwest Airlines has demonstrated that attention to relationships is simply good management practice. The leaders at every level throughout the organization believe that taking care of business, means taking care of relationships. The quality of these relationships provide the foundation of competitive advantage, through good times and bad. They see the quality of these relationships as the most essential successful factor.
References[1] Jody H Gittell, The Southwest Airlines Way: Using the Power of Relationships to Achieve High Performance (McGraw Hill, 2003), p xi.
[2] Cited in Jody H Gittell, The Southwest Airlines Way: Using the Power of Relationships to Achieve High Performance (McGraw Hill, 2003), p 72.
[3] Jody H Gittell, The Southwest Airlines Way: Using the Power of Relationships to Achieve High Performance (McGraw Hill, 2003), p 13.
[4] Jody H Gittell, The Southwest Airlines Way: Using the Power of Relationships to Achieve High Performance (McGraw Hill, 2003).
[5] As before, p 73.
