Employees per aircraft much lower than industry ◦ SWA: 94, United & American: 160 ◦ Industry:...
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Transcript of Employees per aircraft much lower than industry ◦ SWA: 94, United & American: 160 ◦ Industry:...
Employees per aircraft much lower than industry◦ SWA: 94, United & American: 160◦ Industry: 135
Passengers served per employee◦ SWA: 2,443◦ Industry: 840
Customer service◦ Triple Crown winner
On-time performance Fewest lost bags Fewest customer complaints
Fewer employees at the gate◦One agent, ground crew of 6 (SWA)
◦Three agents, ground crew of 12 (Avg.)
Quicker aircraft turnaround time◦25 minutes (SWA)
What is the secret of Southwest Airlines unbelievable level of performance?
Southwest Video
SWA values◦Work should be fun…it can be play…enjoy it
◦Work is important…don’t spoil it with seriousness
◦People are important…each one makes a difference
“They can imitate the airplanes. They can imitate the ticket counters and all the other hardware…..But they can’t duplicate the people of Southwest and their attitudes.”
Herb Kelleher
One of FORTUNE ‘s Most Admired Companies
FORTUNE has ranked Southwest Airlines in the “Best Companies to Work For”
2005, American Customer Satisfaction Index (ACSI) recognized Southwest Airlines as leading the industry in customer satisfaction
Business Week “Top 25 Most Innovative Companies”
Traditionally staffing has focused on the match between an applicants skills and experience and the job requirements.
Match
PersonKSA’s
Motivation
JobRequirements
Rewards
Most Companies
MatchImpact
PersonKSA’s
Motivation
JobRequirements
Rewards
HR Outcomes
Performance Extra Effort Retention
Satisfaction Commitment
Hire for the Job
SWA
MatchImpact
PersonKSA’s
MotivationATTITUDE
JobRequirements
Rewards
Organization
Task
Flexibility
Val
ues/
Cul
ture
Career Progression
HR Outcomes
Performance Extra Effort Retention
Satisfaction Commitment
Hire for the Organization
It used to be a business conundrum: “Who comes first? The employees, customers, or shareholders?” That’s never been an issue to me. The employees come first. If they’re happy, satisfied, dedicated, and energetic, they’ll take real good care of the customers. When the customers are happy, they come back. And that makes the shareholders happy.”
Herb Kelleher (1996)
CharismaticCharismatic
LeadersLeaders
Strong vision and articulationStrong vision and articulation
Self-sacrificing, risk-takingSelf-sacrificing, risk-taking
Unconventional, Unconventional, novel behaviornovel behavior
High expectationsHigh expectationsBuild self-esteem in followersBuild self-esteem in followers
Self-confident, dynamicSelf-confident, dynamic
Founder of SWA Zany, crazy approach
to management – e.g. arm wrestling to settle business matters
Work should be fun – sing, dance, play but get the job done….
Began as a secretary at Southwest Airlines and eventually became SWA President
Known for◦ Humanistic◦ Idealistic◦ Sense of Humor◦ Commitment to Customer◦ Servant Leadership
“We look for folks who are eager, who are “quick on their feet” with “outside the box” thinking and who have caring, friendly natures.”
About Herb and Colleen
Current president, CEO and chairman of the board
Long history in SWA culture working with Herb and Colleen
Leadership is..."Effectively supporting your team of Employees."
Fuel hedging a key strategic advantage but becoming more difficult each year◦ SWA fuel hedging for future:
2007 95% hedged at $50/barrel 2008 65% hedged at $49/barrel 2009 50% hedged at $51/barrel 2010 25% hedged at $63/barrel 2011 15% hedged at $64/barrel 2012 15% hedged at $63/barrel
“Even with $511 million in favorable cash settlements from derivative contracts in the
second quarter 2008, our economic fuel costs increased 35.2 percent to $2.19 per gallon.” -
Gary Kelly
Failed acquisitionWhy??
Could it have worked?
InternalMaintenance
ExternalPositioning
Flexible Processes
Control-orientedProcesses
CLANBuild interpersonalRelationships; cohesion;morale
ADHOCRACYEntrepreneurial; innovative;Adaptable; risk-taking
HIERARCHYStability; efficiency;Rules & regulations;Policy development
MARKETCompetitive; achievement-oriented;Goal-focused
SWA vs. S&P 500 over 10 years
Past 3 months
What has been SWA’s competitive advantage?
Can they keep this competitive advantage in the future?
What does their future hold?