According to Wikipedia, the 35-year old Southwest Airlines is the third larger airline in the world for passenger carried. Fortune magazine defined Southwest "the most successful airline in history." Yet, I didn’t understand what a big deal Southwest was until I flew with them for the first time.
Overcoming my fear of flying
Southwest started to fly out of Philadelphia in 2004 and I tried them for the first time in March of this year, when my husband’s grandmother died and we had to buy a ticket to Detroit the night before leaving. Since them, I have already flown Southwest 4 times. And I hate flying. Really.
When I get on a plane I mentally prepare myself for the worst, assess my life up to that day (not a bad one, I have to admit), think of all the people I love, and close my eyes. When the plane takes off I don’t look outside the window and try to breath v-e-r-y slowly.
When I told my husband that when I fly Southwest I not am afraid of flying, he looked at me incredulous. But if you think about it, it’s not so strange. And it’s not just because Southwest Airlines has not had fatal events since it began service in 1971 (except one victim on the ground, the six-year old car passenger that was hit by a plane that wasn’t able to stop on the snowy runway in Chicago).
Flying is all about trust. You are putting your life in the hands and wings of a stranger. How do you feel about your safety when your airlines is in bankruptcy or close to it, their employer’s salaries have been cut, said employees don’t seem able to provide useful information when your flight is delayed or cancelled, and they often seem to work against you rather than for you? I feel nervous, unhappy, and unloved.
Buying an economy plane ticket is still a big deal with all those restrictions and penalties. This makes flying something you have to plan way ahead. Flying Southwest is not a big deal. For our latest flight, both my husband and I changed our ticket the night before our early morning flight, without any penalty (I actually got $10 back because the new ticket was less expensive).
Even Southwest crew’s appearance and attitude make you feel that, indeed, flying is normal as getting on a bus: they dress casual, crack jokes, and–this must sound unbelievable–they actually look happy (Trivia: although Southwest has the lowest costs in the industry, it now pays the highest wages to many worker groups, making up the difference with higher productivity and by holding its costs down.)
This is why I don’t cringe when I plan to fly Southwest. I must be another casualty of the Southwest Effect.
Southwest Golden Rules
There a few rules behind Southwest’s careful but formidable growth. The Golden Rule sets the priorities straight for the company’s management: Employees first, customers second, and shareholders third. Says Herb Kelleher, Southwest co-founder:
For all the executives, the job is to serve the needs of the employees, who will, in turn, take excellent care of the customers, which will, in turn, provide a good return for shareholders.
And Colleen Barrett, President of Southwest:
If our employees don’t feel good about their work environment and don’t feel they have the tool to do their job, what kind of exchange are they going to have with our passengers?
Which brings us to the second rule, the flexibility plan: Employees will not be penalized or reprimanded for making independent decisions that benefit customers, even if they are not the "right" decisions (with the exceptions of decisions that jeopardize security). Says Colleen Barrett:
As long as an employee has used common sense and good judgment, they really aren’t going to be disciplined if they made a mistake that is leaning towards the customer.
This is a much subtler, more threatening, and way more revolutionary in a corporate environment than the Golden Rule.
Focusing on the customer experience
When Herb Kelleher tries to explain the secret of Southwest’s success, he doesn’t talk about management and bottom-line although Southwest has made many smart business decisions throughout the years (such as maintaining a clear focus in destination offering and fleet composition and purchasing fuel "hedges" in 1999). Kelleher talks about the Southwest customer experience and word-of-mouth marketing that it generates.
Everyone is looking for a formula in business, like E=MC2. But it’s’ not a formula, it’s got to be emotional, spontaneous, and from the heart. (…) There are some things that you can’t quantify – intangible things that are exceedingly valuable and that are, in some cases, more valuable than the tangibles.
It’s more than just providing the customer with value. it’s giving them an experience (…) I want them to get off and say "Well, that was pleasant; it was really memorable. That was different than a lot of other flights I’ve taken." I want them to leave with a smile on their face and communicate that smile to a lot of other people that they talk to.
We emphasize that because it’s good for our people, and it’s the hardest thing for competitors to imitate. They can get all the hardware: Boeing will sell them the planes. But it’s the software, so to speak, that is hard to imitate.
[Kelleher is talking about the "net promoters score" that Scott Cook mentioned in his talk on innovation at the last CHI Conference. The percentage of net promoters, people who would recommend the company to their friends, is highly correlated with the 5-year net revenue of the company.]
Not everybody likes the Southwest experience. If you are traveling for work and your employer pays for the flight, you’d probably prefer business class assigned seating and free drinks. But this is exactly the point: Southwest has clearly identified their customers and it’s building the experience for them, not for everybody.
Technology is a mean, not an end
Southwest knows how to use technology to support their business model. From the "Quickie Tickets" machines introduced in 1979 all the way to today’s web check-in and outstanding reservation software, technologic innovation has been used by Southwest not just to improve the bottom-line, but to support the customer experience.
Gary C. Kelly, Southwest CEO:
We were the first major airline to issue paperless, electronic tickets. We were the first major airlines to have a website and to sell tickets over the Internet, but in other areas of the operation we were often not the first airline to introduce automation.
I view technology as an enabler. As long as a new technology adds value to Southwest airlines, especially if it enhances customer service and improves efficiency, then it’s something that we will want to pursue.
Southwest is not perfect. It’s a corporation, after all. Ten years ago, for example, Southwest successfully lobbied against the construction of a high-speed train line in Texas to avoid competition. Still, when I have the choice, I’ll go Southwest. Too bad they don’t fly to Italy.