About Southwest

• Founded in 1967 as a small commuter “Air Southwest Co.”

• Provide the best service with the lowest fare for short-haul, frequent flying &

point to point non interlining travelers.

• Commence operations in “Golden Triangle” of Texas, i.e, Houston, Dallas & San

Antonio.

• Worked on 3 themes:-

o Love

o Fun

o Efficiency

• “Won 5 consecutives annual triple crown awards”.

Company Culture

• Employees are encouraged to think outside the box and interact with customers.

• LUV program.• High morale.• Low employee turnover and good

relationship with labor unions.

Incentives

• It offer employees attractive incentives like discounted or free travel.

• They provide free tickets to the employees which costs them nothing, because its space available but the value to their people is enormous.

Job Satisfaction

• “We won’t staff up for peak and then furlough people once the peak season is over.”

• These lines create a satisfaction among employees.

• More security & better work environment at southwest.

• Career advancement through southwest people university.

• Company did not fire the employees at the time of recession as well.

Competitive Advantage

• Much of Southwest's success is due to the willingness of its leadership to be

innovative.

• Southwest management has created a culture where employees are treated as

the company's number one asset.

• Southwest's primary operating philosophy is low fares and lots of flights.

• The benefits it gives it employees, include: profit-sharing and empowering

employees to make decisions.

• Southwest mixes in New Age management techniques, such as celebrating

different milestones, and letting love play a part in running the airline.

Employee Empowerment

• Decision making is by worker/management committees.

• Employees are encouraged to be responsible and are given authority to make

decisions.

• Employee input into all policies and procedures.

Practices for Building High Performance Relationships

• Leading with credibility and caring.

• Investing in frontline leadership.

• Hiring and training for relational competence.

• Using conflicts to build relationships.

• Bridging the work/family divide.

• Creating boundary spanners.

• Measuring performance broadly.

• Keeping jobs flexible at the boundaries.

• Establishing partnerships with the unions.

Developing Leaders in Southwest’s Culture

• Leadership at Southwest is understood as a process that can take place at any

level of the organization.

• University of people trainers build a foundation for ongoing learning

environment.

• It also helps supervisors understand differences with their co-workers.

Employee Loyalty

• Highly motivated workforce.

• Employees have given 10% of company stock.

• Employee Retention rate is 92.3%.

• An example showing loyalty of employee toward southwest airline is,” after

losing a huge amount of business, each of its 32000 employees gave back some

of their pay to help company.

Learning

• The primary lesson is that though “relationships are relatively ‘soft’

organizational factors and therefore tempting to neglect under challenging

conditions,” strong working relationships allow organizations to move beyond

the traditional trade-offs between efficiency and quality and to achieve higher

levels of both, simultaneously.

• Relationships are not just a nice addition to the hard factors, but are powerful

drivers of organizational performance, if they are consistently integrated into

organizational practices over the long term.

Southwest Airlines• The primary lesson is that though “relationships are relatively ‘soft’

“I’ve tried to create a culture of caring for people in the totality of their lives, not

just at work. There’s no magic formula. It’s like building a giant mosaic--it takes

thousands of little pieces…The intangibles are more important than the tangibles.

Someone can go out and buy airplanes from Boeing and ticket counters, but they

can’t buy our culture, our esprit de corps.”

Herb KelleherCEO Southwest

Wall Street Journal

Herb KelleherCEO Southwest

Wall Street Journal