In the airline industry, just running a company in the black is an accomplishment. But somehow, Colleen Barrett, president of Southwest Airlines Co., has found a way not only to operate in the black but to expand the airline’s reach and grow, as other airlines are filing bankruptcy, cutting service and even folding. Barrett and the company’s two other top managers, Herbert D. Kelleher, chairman of the board, and Gary C. Kelly, CEO, have done this by building a culture of employee warriors who help them look out for the company’s best interests. “We tell our employees over and over and over that if they want to continue to enjoy job security, which is very rare in our business, and if they want to increase their personal welfare from a financial standpoint, the only way we can continue to do those things is if we make more money,” Barrett says.
Southwest’s legendary warrior spirit started in the early days of the airline’s epic fight for the right to fly planes. The company spent three-and-a-half years in court fighting just for the right to put a plane in the air.
From those early days, everyone has been ready for a fight, always understanding that the airline’s very survival was at stake, every single day, with every single customer. With that attitude, employees have helped build the airline into a company that brings customers back, time and again, because it has taken flights beyond functional to fun.
Since its founding in 1971, Southwest has grown to 32,000 employees and reported $7.6 billion in revenue in 2005. Drawn to the airline by low fares and high customer satisfaction ratings, some 88.4 million people flew Southwest in 2005.
Since 1987, the airline has maintained the fewest overall customer complaints as published in the Department of Transportation’s Air Travel Consumer Report, according to Southwest.com, the company’s Web site. In 2005, Southwest ranked first in customer satisfaction. In 1973, the airline adopted the first profit-sharing plan in the U.S. airline industry. Through this plan and others, employees own at least 10 percent of the company stock, increasing the employees’ ownership mindset.
Barrett says that early fight was the basis for how the company thinks and operates today.
“The competition and the arrogance of people who didn’t think we should be there caused us to want to be there even more,” Barrett says. “I’ve often thought that if they had just left us alone, we probably would have been out of business in a year or two. Every step we took, they tried to block, and that built up a fire in the belly, and a ‘By God, nobody is going to do this to us’ sort of mentality that I think created what we now call our warrior spirit.”
So how exactly do you engage your employees in helping grow your company? Barrett says it starts with hiring the right people.
Southwest has defined what kind of personality matches nearly every type of job within the airline. For a customer service representative, the company looks for proactive extroverts who won’t be afraid to lean toward customers when talking to them. “We have learned over many years how to talk to people,” Barrett says. “It doesn’t matter what the subject. When they answer us, words that they use in their answers will give us certain kinds of personality characteristics that will be a good fit for each job that we have profiled. We have profiled almost all jobs at Southwest.”
Conducting interviews in a group setting is one way Southwest both culls applicants at a quicker pace and sees how applicants deal with people they don’t know. Some 50 to 60 people are interviewed at one time for similar jobs. “In a group setting, we are really looking for the superstars,” Barrett says.
The main interviewer has the participants play a few games to warm the group up and tells them they are expected to be respectful of each other. The interviewer then asks individuals to answer questions in the midst of the group and watches not only how they answer but how others in the room react to them. Are they looking at the person who is speaking? Do they laugh when the person says something funny?
Barrett says the company also sometimes watches how applicants act when they go to lunch in the Southwest cafeteria. Do they talk to others while they are in line? Do they sit in a group with people they don’t know and converse easily? Or do they find a quiet corner and sit alone, hoping to be unnoticed? The better fit for Southwest, in most cases, is the natural extrovert.
In the book “Nuts! Southwest Airlines’ Crazy Recipe for Business and Personal Success” by Kevin and Jackie Freiberg, the authors tell the story of a pilot being interviewed for a job at Southwest who is rejected because he is rude to several employees during his trip to the interview location. His credentials were sterling, but his personality was all wrong, so he was not hired. “If you are not a warm-spirited, touchy-feely person, you are going to feel so out of your element that you are not going to be happy here,” Barrett says, which is even true for the company’s managers. Barrett recalls one comptroller whom she helped find a new job after he confessed he didn’t like the warm-and-fuzzy culture.
After employees are hired, Southwest has to deprogram them. At most traditional companies, employees strive to be professional, which is often interpreted as suppressing humor and personality. “That’s the craziest thing I ever heard,” Barrett says. “One of the most important and significant freedoms we allow our employees is the freedom to be an individual. I have to stress, particularly with new hires, and particularly with pilots, do not spend your first year as you would at any other company not wanting to be known and just being low-key until you get off of probation. If you do that, you are wasting the very first year of your life at Southwest Airlines. “Good grief, we hired you because of who you are. We didn’t hire you because you filled a mold.”
Southwest has handbooks and guidelines that employees are given to help them handle tricky situations with customers. But those are only guidelines. Barrett wants employees to make their own judgments on how to best handle a customer. “I can’t sit here in Dallas, Texas, and write a scenario for every single thing our employees will run into, so they have to use some common sense,” Barrett says. “I don’t want people using rule books as reasons not to help customers, or each other.”
Southwest encourages its employees to have fun. The airline has a book of games that circulates among flight attendants that gives them ideas for how to keep customers entertained. Southwest employees contribute their own ideas to it, and the book is changed about once a year so the games don’t get old.
Among the games flight attendants have used is one that gives a prize to the person on board with the oldest penny. The prizes aren’t usually anything special — it’s whatever they can find on the plane, including luggage tags and extra snacks. But it’s basic psychology, again, that aids Southwest: People love to win. “People will do anything to compete,” Barrett says. “It doesn’t matter how silly the prize. … It’s unbelievable what you can get grown adults to do.”
And Barrett trusts that Southwest is hiring people who know how to judge when it’s the right time to play a game.
“You have to know your audience,” Barrett says. “A bunch of businessmen taking a 6:30 a.m. flight from Dallas to Houston reading The Wall Street Journal, they don’t want you playing games with them. But on Friday afternoon, when it is the end of a long week and they are loosening their ties and having a cold beer and they are on their way home, then it is probably OK. You learn that sort of thing from your peers, and you learn it from their body language.”
Barrett also applauds efforts to diffuse difficult customer service situations with humor. For example, a ticket agent in Houston was faced with an upset customer claiming he was a big shot and entitled to special treatment. “He really was all over her about, ‘Don’t you know who I am?’” says Barrett. “So she got on the speaker and said, ‘Ladies and gentlemen, I have a problem. Maybe you can help. This gentlemen in the blue suit and green tie, he doesn’t know who he is. Can anybody help him?’ Eventually he was falling down laughing at it. You have to know if you can pull it off.”
And what if the customer doesn’t laugh? Barrett says she might visit with the employee and talk about what went wrong. But she is careful not to scold unless it is warranted, because she wants her employees to take chances. “I’m OK with failure as long as they learn from their mistakes,” Barrett says.
Not only does Southwest trust the employees’ judgment on the best ways to handle customers, Southwest considers those employees experts on how to save money. Its pilots know the shortest routes that save the most jet fuel. And, also recounted in the book “Nuts!,” a flight attendant once suggested the company stop buying special trash bags imprinted with the company logo for collecting trash at the end of a flight; use regular garbage bags instead. It saved Southwest thousands of dollars. And a computer technician told the airline he could build the computers it needed much more inexpensively than it could buy them, so the airline took him up on his offer.
Little things matter
What keeps employees wanting to work so hard for their employer is, in part, self-interest in keeping Southwest in business so that they can reap the rewards of ownership. But Southwest also works hard to take care of its employees, creating the kind of place they want to stay.
Barrett has a seven-employee internal customer care team that keeps track of every single employee’s birthday, significant anniversaries, the birth of children and other important events, and makes sure that cards go out for nearly every occasion. Barrett’s office sends out about 75,000 cards annually, and she knows it is meaningful to employees because she hears from them if she misses something.
“You really have to be good about it,” Barrett says.
What may be the key for Southwest is sincerity. Barrett says no company can sell employees on a fun family culture if it isn’t practiced, and believed in, from the very top down. The message from management has to be the same for both employees and customers, and it has to be honest and sincere. “We’ve always underpromised and overdelivered, and we’ve always kept it simple,” Barrett says. “We do not purport to be all things to all people, and we don’t make any bones about who we are and what we stand for. We talk openly, both internally and externally, from the same mouth, if you will. We don’t worry a lot about inconsistent messages because we don’t use them. Sometimes we’ve been ridiculed, and we’ve been the butt of many jokes, but it works for us.”