Whats Impressive About Southwest Airlines?

Looking at Southwest history is impressive to see how the figure of Herb Kelleher stood right from the beginning even when I was just the layer of the company not yet directly involved with the management of the company.

Probably without his persistence to fight against the others airliners willing to keep on the ground the newly formed company, Southwest airlines will never come to business.

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The other point that is very peculiar is the corporate culture created for the company based on “Love and Fun” that was surely, at that time, beginning of the seventies, something very far away from “Corporate America” company culture, but very much spread in popular culture.

Weren’t those the years of hippies and sons of flowers culture after all ?

This approach coupled the low cost option underneath the idea to enlarge to customer base making flying more affordable and less posh and more popular allowing new class of customers to use airplane.

2. What grade would you give Southwest management for the job it has done in crafting the company’s strategy? What is it that you like or dislike about the strategy? Does Southwest have a winning strategy?

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The strategy crafted by Kelleher over the years of service as CEO brought the company to became one of the leader in the US domestic airline industry with years of good financial performances even the all the competitors financial records were bad. This surely shows that the strategy was well crafted and executed to reach the growing results in terms of cities served, transported passengers, revenues and profitability.

Surely what I most like about Southwest strategy is the popular cultural approach to make more affordable using airplane to move short distances enlarging customer base, moving traffic from other kind of transportation such as cars, trains and bus lines.

The history records of the company speak for themselves to show that the Southwest strategy is so far a winning strategy, that has lead to change in the industry with the introduction of low fare concept previously unknown.

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3. What are the key policies, procedures, operating practices, and core values underlying Southwest’s efforts to implement and execute its low-cost/no frills strategy?

Southwest has always putted in place operating practice that allowed to company to tight control its cost to be able to keep ticket costs at the lowest possible level.

Running a airplane single-model fleet to lower maintenance and spare parts costs, operates to and from less known airports to lower landing and stationing fees and lowering the risk of delay due to congested traffic (Tierney S. Kuby M. 2008), offering ticketless travelling systems, managing loading and uploading procedures to keep to minimum gate turnaround time are all operating practices that build up a careful managed cost reduction system.

These procedure are developed and performed in the light of Southwest values that are expressed in its 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.” (The Mission of Southwest Airlines)

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4. What are the key elements of Southwest’s culture? Is Southwest a strong culture company? Why or why not? What problems do you foresee that Gary Kelly has in sustaining the culture now that Herb Kelleher, the company’s spiritual leader, has departed?

The distinctive key element of Southwest’s corporate culture is focus on employees rather than on customers(Srinivasan M. n.a). To Southwest employees satisfaction, their attitudes towards customers are the keys success factors to run the company. The company believes that without satisfied employees it’s not possible to run successfully a company where high level of interaction with customers is required like in travel industry is.

Southwest has a strong culture because it has strong basis in its history and telling history is an important ground to build a corporate culture upon. Stories about what employees did for customers, how they proudly behaved are spread around the company. Further company culture is strengthened by plans in place where employees have a taste of what others employees jobs involve through exchange plans.

Top manager don’t live in their “ivory towers” but spent most of their time “managing by walking around”, this show their commitment to the company to all workforces.

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The Kelleher’s legacy is very notable he has shaped the company culture for many years, Kelly has a very important duty to carry, make corporate culture evolves to be ready for future challenges without abandoning the track traced by Kelleher, this could be a possible source of problems.

5. What grade would you give Southwest management for the job it has done in implementing and executing the company’s strategy? Which of Southwest’s strategy execution approaches and operating practices do you believe have been most crucial in accounting for the success that Southwest has enjoyed in executing its strategy? Are the any policies, procedures, and operating approaches at Southwest that you disapprove of or that are not working well?

Southwest strategy execution has been very successful and all the activities put in place to execute the strategy have been very successful, all of them have contributed to create a unique value chain unmatched by competitors.

This is well testified by the recorded results of the company, so far it is very difficult to spot relevant points of possible improvement.

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6. What weaknesses or problems do you see at Southwest Airlines?

Looking at the records available is hard to spot weakness or problems that could bother the company.

Nevertheless rapid changes in environment could leads to new scenarios able to create problems to the company.

7. What recommendations would you make to Gary Kelly?

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Looking at the positive past records of the company the only thing that I wish to recommend to Kelly is to keep thinking unconventionally has the company did at is beginning. Being so successful now Southwest is “state of the arts” and no longer an outsider as it was, thus it’s the leader to be chase by followers, to maintain the leadership the must keep innovating.

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