SOUTHWEST CEO| CEO Gary Kelly and What Makes Southwest Airlines So Successful| | CEO Gary Kelly and the employees of Southwest Airlines have fun at work. His skills as an accountant gave him a chance to change how the airline handled the accounting end of business. The corporate culture and core competencies have made Southwest Airlines a front runner in the business. | | LeAnne Powell| 10/15/2011| | Page 1 CEO Gary Kelly and What Makes Southwest Airlines So Successful The main reasons for the success of Southwest Airlines are three fold, with CEO Gary Kelly, co-founder and board chairman Herbert D.
Kelleher, and president Colleen Barrett, core competencies, and corporate culture as its base. This includes their company values; concern, respect, and caring for their employees and customers – to define it. (BCLC SOUTHWEST AIRLINES, 2006) Southwest Airlines started in 1972 with three planes and has continued to strive toward meeting the needs of their customers. Southwest Airlines has built its culture and its reputation from the inside out. It values a happy workforce, and believes that its 32,000 satisfied employees will keep customers coming back. BCLC SOUTHWEST AIRLINES, 2006) Kelly’s first task at Southwest was to bring its accounting and information management systems into the computer age. At the time, all financial and technical functions were still being been done on paper, or contracted out to companies that owned computers. The only computer at Southwest was one that Kelly’s predecessor had bought with his own money — and took with him when he left. “I sponsored the business case for the first mainframe computer we bought in 1987,” Kelly recalls. “It wasn’t an easy sell. (Reed, 2004) Kelleher had seen larger airlines waste, in his opinion, millions on new-fangled technology. He was skeptical that computers could benefit an airline where keeping costs low is a religion. Page 2 CEO Gary Kelly and What Makes Southwest Airlines So Successful Gradually, Kelly was able to convince Kelleher that technology could lead to cost-cutting, revenue-generating innovations. The corporate culture is displayed in many ways. Barrett says that “Southwest likes to think of itself as a customer service organization that happens to fly airplanes. In fact, one of the attributes that Southwest looks for in employment candidates is a “servant’s heart. ” (BCLC SOUTHWEST AIRLINES, 2006) Southwest’s hiring and training process is unique and one of the chief ways that the airline advances its corporate culture. Southwest looks for people with the right “spirit,” and will hire for attitude and train for skills. For example, with flight attendant candidates, Southwest conducts group interviews to observe how the applicants interact with other people, and considers this a strong indicator of how future employees will interact with and treat customers.
It’s an effective mechanism to quickly spot talent that will positively add to the company’s culture, reputation, and long-term success. Another way is Southwest empowers its managers and front-line staff – those who deal daily with the customers – to act as “problem solvers,” often making decisions on the spot that can save the relationship with a customer. In the airline industry, a company is only as good as its customers’ last travel experience. They believe in promoting from within and providing their employees the opportunity to grow and learn from each other. BCLC SOUTHWEST AIRLINES, 2006) Page 3 CEO Gary Kelly and What Makes Southwest Airlines So Successful Corporate cultures such as Southwest’s take commitment from the boardroom down to the front line employees. They’re not “programs” or “tactics,” but a way of life. Hardage, who heads Southwest Airlines’ internal and external communication, shared some thoughts about the role of communications in fostering a positive corporate culture. * Companies must provide the level of knowledge and information that allows employees to “act like owners. Southwest Airlines provides daily news updates via its intranet; the CEO records a weekly telephone message for all employees; and the company communicates detailed financial information called “Knowing the Score” on quarterly earnings. More than 14 percent of outstanding shares of stock are held by Southwest employees. * Southwest communicates with employees every day through news on their intranet, every week through a telephone news line, every month with a 32-page magazine, every quarter through the financial Knowing the Score message, and every year through a series of town hall meetings. Communicators must nurture their corporate cultures so that employees understand how their behavior contributes to how their organizations are judged. In its monthly newsletter LUVLines, Southwest features employees who have been nominated by their peers for “Winning Spirit” recognition. These outstanding employees are modeling the type of behavior that results in a remarkable vs. ordinary experience for a customer or fellow employee. Page 4
CEO Gary Kelly and What Makes Southwest Airlines So Successful What traits and skills does Kelly possess which make him an effective leader? There is a very simple answer to this. Kelly is a down to earth person who never wanted to be a CEO. He did not want the stress and headaches that went with the position. He started out as a Controller and made his way to the top. He is an accountant, musician, loves sports, and people. His wife Carol states that she’s the more talkative and outgoing of the two. But she laughs at her husband’s suggestion that he used to be a little shy. He’s a born leader,” she says. (Reed, 2004) Kelly himself says, however, his leadership abilities are all learned. “Being a leader is about character … being straightforward and honest, having integrity, and treating people right,” he says. Kelly can be a demanding boss. But he tries to be more nurturing than neutering in his dealings with employees. (Reed, 2004) Denison says that Kelly can be “nurturing almost to a fault. ” But that, he adds, also is the secret to his ability to get great performance from those who work for him. “Gary on’t give up on people,” Denison says. “He will go to extraordinary lengths to help those having trouble keeping up. ” That attribute makes the people who work for him willing to “run through walls for him,” Denison says. (Reed, 2004) I see Kelly as a person who puts his employees and customers first. This man will look you in the eyes and give you honest answer to your question. I would work for him at the drop of a hat…so to speak. Page 5 CEO Gary Kelly and What Makes Southwest Airlines So Successful Identifying the core competencies was fun.
I found very interesting information on this and want to give information straight from the site. * They operate 1 type of aircraft which lowers maintenance and training costs though that will change if the merger with AirTran goes through. * They hedge aggressively on fuel which allowed them to be profitable when other airlines were losing money. * They have a strong domestic network. * They empower their employees to make decisions. Their philosophy is to treat their employees well and put them ahead of their customers.
The logic is if the employees are valued, they will treat the customers well and with repeat business and a good name, more people will fly therefore allowing the airline to make more money, making the stockholders happy. * The airline employs a fun and casual work environment. There was this story of how a group of people were interviewing for jobs at the airline. The applicants were told to change into bermuda shorts. The ones that ended up doing so ended up getting a job. (contributor, 2010) Page 6 CEO Gary Kelly and What Makes Southwest Airlines So Successful
What I see is that Southwest Airlines has come a long way in the industry. This airline will be around when others close down. The core competencies, culture, and pride that this company has will make it even more successful in the future. From the top man down to the employees who clean the toilets, each has pride in their company. No one is left behind when it comes to learning and promotions. Other companies should take a hard look into how this company has excelled and make changes needed to succeed. Page 7 CEO Gary Kelly and What Makes Southwest Airlines So Successful
Reference Page BCLC SOUTHWEST AIRLINES. (2006). Retrieved October 15, 2011, from Business Civic Leadership Center: http://bclc. uschamber. com/about/companies/southwest-airlines contributor, p. t. (2010). Yahoo Answers. Retrieved October 15, 2011, from answers. yahoo. com: http://answers. yahoo. com/question/index? qid=20101017192638AAPJvYv Reed, D. (2004, September 26). USA TODAY/ MONEY/ EXECUTIVE SUITE/ CEO PROFILE. Retrieved October 15, 2011, from USATODAY. COM: http://www. usatoday. com/money/companies/management/2004-09-26-kelly-usat_x. htm