Southwest Airlines laugh at work - and all the way to the bank
The airhostess opens the overhead compartment from the inside and comes crawling out, while passengers fill the aircraft. When everyone has found their seats, she reads the safety procedures from the speakers: “There are 50 ways to leave your lover, but only six ways to leave this airplane…”
And she continues: “If the pressure drops in the cabin, place the oxygen mask on yourself first, and the on the child you like the best…”
When everyone has been given a drink and peanuts, she starts the competition “Who among the passengers has the largest hole in his or her sock?”
Is this a scene taken from the new film “Mr. Bean flies again” with Rowan Atkinson? A sketch from a West End show? No, this is a normal flight with Southwest Airlines, which has been voted the best airline in the world.
If you are one of those who believe that professional success has nothing to do with having fun, then you should read about how Southwest Airlines has laughed and played their way to a surplus every year since 1973 and has a market value of 7 billion pounds.
Our mission statement
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.
Hire for attitude, train for skills
Many companies believe themselves to be modern and customer-oriented when they say “Focus on the customer”. Southwest Airlines doesn’t. They say: “Staff first, then the customer.” When the employees are happy and function well in their jobs, then customer service comes naturally.
But the precondition is that you have a staff with the right attitude and the right qualities. “We are religious when it comes to recruitment,” says Southwest managers, who look for two particular qualities in a colleague:
1. Ability to improvise
With employees at 58 different airports, Southwest wants them to solve problems themselves instead of calling the manager or look it up in the company manual when problems arise. “Sometimes you may have to break company rules if necessary, in order to solve a customer’s problem,” says Southwest to its employees. “No, make that MUST break company rules if necessary, in order to solve the customer’s problem!” The management has faith in their employees instead of ensuring that the rules are being followed. This also makes the company more efficient, in that the employees often find better solutions than a manual could ever predict, they respond immediately to the customer (who won’t have to wait while manuals are checked and managers called), and they can use their energy on making the most of customer contact and market possibilities – because time is always scarce.
The Southwest organisation on each airport functions as a self-sufficient company, and the managers have the freedom and responsibility to ensure that the Southwest culture is maintained in their department. This very decentralised organisation gives a lot of freedom and encourages the employees to take pride in the company. “SWA really doesn’t care how people get their jobs done,” says the company management with a wink; the managers don’t interfere with how the employees come to solutions and results.
2 A sense of humor
Many things can go wrong in the airline industry: delays, overbooking, baggage ending up at the wrong airport, etc. In such cases, Southwest’s experience shows that people with a distinct sense of humor can more easily reduce the customer’s frustration and despair. At the same time, humorously inclined employees handle such situations better and are less exposed to aggression because they can more easily communicate with difficult customers.
Southwest Airlines interviewed many thousands of those 243,657 applying for a job in the company in 2002. Groups of applicants sit in a waiting room before they are called in for the interview. But in this room, Southwest has also placed a few fake applicants – one dressed in pyjamas, another dressed in a pilot uniform back to front and inside out. Then Southwest observe how the real applicants react to this. Annoyed applicants who clearly state with facial expressions and body language that they find such stunts simply ridiculous, lose the job before they get to the interview: Southwest Airlines look for generous and playful people who can handle surprising and unusual situations in a positive and inclusive manner.
The company’s legendary chairman, Herbert (Herb) D. Kelleher (74), lives by the motto “Work is important – don’t spoil it with seriousness”.
“We are nothing without our employees,” says Kelleher. “They must enjoy themselves – and most importantly: They must have a good time. Love and passion. A company is much stronger if love, not fear, is the glue that holds the employees together. This is no trade secret, but darn difficult to copy,” he says.
The Southwest Airlines’ ticker code on the Stock Exchange is of course LUV. Kelleher loves to point out that out of the company’s 35,000 employees, 2000 are married to another staff member.
Best at everything
Southwest Airlines at number on
Having fun at work requires that systems and routines function properly. At the same time, the consequence of having fun at work is that systems and routines are followed more accurately. That’s why this airline does most things right and has been voted Airline of the Year 2003 by Air Transport World.
The “Employee of the year” gets his or her name painted on a plane for one year. Impressive – but on the other hand, it only takes a few hundred pounds to hire a painter to do this job once a year. This is simply about having a firm focus on the employees and understanding the value of creating heroes and showing appreciation of those who create the company’s values. And you have to be rather blasé not to find it a little bit of fun to have your name on a Boeing 737 for the next twelve months.
When Southwest Airlines had to sell one of their four planes in 1971, the management discussed whether it would be possible to maintain a flight network for four planes with only three planes. They calculated that by “turning” the plane at the gate in ten minutes – getting the passengers out, cleaning and getting the new passengers in – Southwest could maintain all their flights with only three planes. And they did. The advantage of having that many employees without airline industry experience became evident. Station manager Denni Lardob later stated: “When the management asked if we could turn the plane in ten minutes, we answered ‘Sure!’. We had no idea that it was impossible, so we just did it …” And everyone contributes – airhostesses and pilots also pick up rubbish and prepare the plane.
Southwest Airlines still uses less time boarding and leaving than other airlines. As a consequence of efficiency at the gate, there is still no other American airline with as many hours in the air as Southwest Airlines. Accordingly, they need 35 fewer planes than a competing airline with a similar flight schedule, and they save several millions of pounds in cost of capital annually, by not having to invest 1 billion pounds.
The company was also the first to serve breakfast in the departure hall. Because they could start cleaning up after the passengers had boarded the plane, this went a lot faster than serving and cleaning on board the plane. The time saved by the crew could be spent giving service and meeting the passengers’ different requests during the flight.
The company also first introduced the ticket-free system. Because Southwest Airlines was excluded from the collective ticket system that the other airlines used, they for many years merely distributed a simple receipt to the passengers. A number of passengers complained that the ticket was easily thrown away with other receipts from the supermarket, etc. A group sat down to find a solution to the problem. Investing in a comprehensive, computerised ticket system seemed inevitable. Then, someone in the group suddenly had an epiphany and came up with the idea of printing “TICKET” with big, red letters on the ticket receipt, so that it could more easily be distinguished from other receipts. This became the solution, and the company saved several millions of dollars.
Southwest Airlines was the first airline to have its own website, and they are the first and the largest when it comes to online booking – 49 per cent of ticket purchases take place there.
They are the most punctual airline, have the quickest baggage handling, and for the 12th consecutive year, they are the American airline with the fewest complaints.
- They have the most modern fleet of planes, an average of 9,2 years in 2002.
- Southwest Airlines has the happiest employees, and was voted the best employer in the USA in both 1997 and 1998. In 2002, Southwest Airlines received 243,657 applications and employed 5,042 of them. The company has never made anyone redundant due to staff reductions.
- The company has extremely open internal communication, which they claim is a precondition for the quick reflexes of the organisation. Failing communication creates complexity, and the organisation becomes slow and lethargic while employees try to look for information. All information about the company is therefore available to all employees – including information about negative occurrences. They are skilled in strategy and planning - because naturally, they know that humor can never be a substitute for clear and efficient management. The company works with scenario planning, “What if …”, instead of spending resources on developing long-term strategies that cannot be followed because surroundings change so quickly and unexpected. Combined with know-how and experience, the consideration of possible scenarios leads to speedily making and implementing decisions. Taking over and rebuilding a vacant space in an airport often takes place only days after a competitor’s winding-up.
- Southwest has had a surplus every year since 1973, and works continuously to keep administration, bureaucracy and costs at a minimum. In order to ensure efficiency in operation, the systems must be our servants, not our masters, is the approach.
The last few years, and especially those following 11 September 2001, the airlines have struggled, and several have been wound-up or taken over by a competing company. Despite this, Southwest Airlines has managed successfully compared to the industry in general. To shed light on this, we have compared figures from the annual reports from Southwest and the Norwegian airline SAS from 2002.
While SAS has seven different types of planes and are working to reduce them to five, Southwest has always had only one: Boeing 737. That way, all mechanics can maintain all planes and all pilots can fly all planes – in addition to the quite beneficial agreements with Boeing.
Southwest Airlines has approximately the same number of planes as SAS. But this is where the similarities end. Southwest Airlines has three times the number of flights and transport almost three times the number of passengers of SAS – but with less operating expenses…
That’s why Southwest Airlines is in the black – even in a disastrous year such as 2002 – and is regarded by the investors as ten times more valuable than the Scandinavian company.
Key figures 2002
SAS SWA
Number of planes 314 375
Average passenger distance 1,062 1,333
Number of flights 295,813 947,331
Number of flights per plane 942 2,526
Number of passengers 22,087,000 63,045,000
Operateing income (million US$) -64 417
Market value June 2003 (million US$) 104 1,090
In 2005, SWA still flew three times more flights and more passangers than SAS, and SWA's operarting income was more than half a billion US$ better than SAS'.
Remember to have fun!
On the company’s website, you will find Herb Kelleher dressed up as Elvis on a visit to his employees on one of the airports, where he arrives in a white limousine or on a Harley Davidson. Sometimes he appears on a plane wearing a rabbit costume.
The company’s chairman lives out their staff philosophy, summarised in four simple points:
à Lighten up
à Be more playful
à Don’t take yourself too seriously
à Remember to have fun!
That’s worth seven billion dollars.
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This is an excerpt from Jon Morten Melhus' and Trond Haugen's success book "Play and Profit - about humour and enthusiasm at work" (in Norwegian: "Latterlig Lønnsomt", 2003), Norways most sold business book in 2004/05. More information at www.begeistring.bo or by mail to [email protected].
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