By: Brent Longnecker
I still remember the phone call like it was yesterday; I was 30 years old and in line to be a partner at KPMG Peat Marwick up in Dallas. The voice on the other end said:
“Mr. Longnecker, Herb Kelleher, Southwest Airlines, I hear you are the best executive compensation consultant in Texas.”
He paused.
I thought for sure that one of my crazy friends was “punking” me, but in the spirit of fun, I replied:
“Well, that would be amazing since I’ve only been at this for 15 months.”
He just laughed and replied:
“I like you already, Longnecker. I’d like you to be my executive compensation consultant.”
I was stunned. Years later, he said he had done a search, but I’ll be honest… I did not deserve the mentoring Herb would give me over the next 28 years – with me as his outside advisor. He was indeed one of a kind.
CULTURE
“Culture eats strategy for breakfast.” – Peter Drucker
As Drucker knew and taught, a robust corporate culture has intense sway in shaping an organization’s long-term success, efficiencies, and effectiveness. It considers shared values, beliefs, and behaviors that guide the actions of executives and employees and helps create the company’s corporate brand and identity.
Herb would be the best mentor/teacher I could have ever asked for. Thirty years after Southwest Airlines went public in 1971, Smart Money Magazine wrote that it was the BEST PERFORMING stock over those three decades; in an industry famous for red ink and crazy bankruptcies. To Herb, though, when he took over as CEO, Southwest Airlines was not a job… it was a passion! And he loved his people.
That passion and his true love of his team arguably created one of the most influential corporate cultures ever. Some of the key cultural aspects of Southwest Airlines include:
1. Fun-Loving Attitude: Under Herb, Southwest was known for its vibrant and playful atmosphere. Employees were allowed to display a respectful sense of humor that created a win-win for them and their passengers.
2. Customer-Centric Focus: Southwest Airlines strongly emphasized exceptional customer service. Their culture revolved around making the customer experience enjoyable and hassle-free. Employees were always encouraged to build personal connections with passengers.
3. Teamwork and Collaboration: Collaboration is a crucial aspect of Southwest’s culture. The company always promoted a sense of comradery and teamwork. Teams purposed to work together to achieve common goals and support one another to deliver a seamless and enjoyable travel experience.
4. Employee Empowerment: Herb was incredibly unique here. While other airlines and companies ran their companies off the financials, Herb ran it off his belief in his people. Truly wicked. He valued his employees such that they were empowered to make on-the-spot decisions. Rest assured, they were trained well to do this, but once ready, he gave them the autonomy to “own” their work, solve problems, be creative, and make decisions that would benefit BOTH the customers and the company.
Herb was indeed a pioneer here. When he was younger, if a customer were rude to one of his employees, he would call and “fire” the customer. I remember when he shared that with me and told me needed to do the same. I thought he was delusional. But after I left Deloitte and formed Longnecker – I did just that. It was amazing! In response, three companies called the employees at Longnecker, that they had offended, and apologized. The other two told me what I could go “do with myself.” But it was refreshing and freeing. Shortly after, as I shared what I had done, he put his arm around me and said, “Finally… well done.”
5. Work-Life-Family Balance: Herb recognized the importance of a work-life-family balance for the employees. He saw it as critical as a sound compensation and benefits package. Under his leadership, Southwest strived to create an environment supporting their employees’ well-being and personal lives. This included flexible schedules, family-friendly policies, and a commitment to maintaining a healthy work-life-family balance.
6. Warrior Spirit and Winning Attitude: The employees of Southwest were encouraged to have a “Warrior Spirit” that drove employees to attack challenges with determination, a positive attitude, and a result-driven mindset. The company worked relentlessly on fostering a culture of teamwork, continuous improvement, and innovation – that still holds to this day – thanks to the vision and care of one of the most outstanding leaders ever – Herb Kelleher.
Culture – what did Herb see that made this element so key for him to lead? Why is culture crucial to other great companies like Google, Netflix, Patagonia, and Zappos?
In my opinion, all of these companies understand that creating a robust corporate culture is a true market differentiator. Specifically:
· Employee Engagement and Productivity: A great culture increases when individuals feel connected and valued; they become more engaged, motivated, and passionate about their work. This leads to higher productivity, better teamwork, and increased employee AND customer satisfaction.
· Attraction and Retention of Talent: Great cultures are magnets to top talent. When a company consistently demonstrates a sound culture, it becomes an employer of choice. This, in turn, improves the organization’s ability to attract and retain the talent needed to differentiate itself from its competitors.
· Organizational Cohesion and Synergy: Cultures create a shared identity and unity with employees, suppliers, and clients. It aligns a “community” of people around a common purpose, vision, and set of values empowering all to work together, in sync, towards organizational goals.
· Innovation and Adaptability: Strong cultures encourage innovation and a willingness to embrace change. Studies show that when employees feel supported, they become more likely to generate creative and unique ideas that contribute to the company’s overall well-being. In addition, strong cultures foster a team environment where continuous learning, research, and adaptability are valued and wanted. No better way to navigate today’s constantly changing world than to have innovation and adaptability woven within the DNA of the corporation.
· Enhanced Decision Making: Strong cultures also enhance more precise decision-making. That, in turn, allows for increased qualities and efficiencies that result in better results and more effective problem-solving. It also enhances a corporation’s adaptive processing skills, which are true differentiators in today’s market. With these skills, corporations create resilience that allows corporations to cope better with challenges.
· Customer Supplier Experience and Reputation: Herb was not just interested in his employees; he also wanted his suppliers and brand awareness advisors to be part of the culture. When this happens, an entire “community” of people are affected. When employees are aligned with the company values and dedicated to treating the “community” with exceptional attitudes and passion, customers, suppliers, and advisors enjoy being part of that “community” and the positive experiences involved. This, in turn, contributes to customer, supplier, and advisor loyalty, positive word-of-mouth, brand awareness, commitment, and, best of all: AN ENHANCED REPUTATION. For the organization and all those associated with it.
“REPUTATION” – there’s that word again!
A robust corporate culture is a “value” differentiator in today’s ever-competitive marketplace. It serves as the bedrock upon which an organization’s values, behaviors, and strategic decisions are incorporated into the DNA of all.
Finally, a great culture that drives an even better REPUTATION can become a LEGACY, just like Herb Kelleher and Southwest Airlines now have, and a “beacon” for all.
Thanks, Herb… you were indeed one of a kind!
***
Fun Fact: Herb was originally an attorney. He clerked for the New Jersey Supreme Court, eventually moved to San Antonio, and was a law partner at Oppenheimer, Rosenberg, Kelleher & Wheatley from 1969-1981. He and one of his clients – Rolin King of Texas – created the concept with banker John Parker that became Southwest Airlines. The company was incorporated in 1967 but spent years on legal issues. The first flights took off in 1971. Herb became CEO in 1981, and the rest, as they say, is history.
Comments