-
Southwest Airlines has been voted the “Best Domestic Airline of the year” for 2003 according to the travel agent readers of Travel Weekly magazine.
- Southwest Airlines was named Brand Keys Customer Loyalty Award winner in the airlines category for 2003. The annual Brand Keys Customer Loyalty Award honors the companies that are most single-mindedly devoted to creating loyal Customers.
- Southwest won the 2003 “Quest for Quality” award for outstanding Cargo performance, receiving the highest scores in the areas of On time Performance, Value, and Customer Service.
About Herb Kelleher:
Figure 1: Herbert D. Kelleher
Herbert D. Kelleher co-founded Southwest airlines in 1967. Herbert D. Kelleher has been Chairman of the Board of the Company since March 29, 1978. Mr. Kelleher became interim President and Chief Executive Officer of the Company in September 1981, and assumed those offices on a permanent basis in February 1982. After being diagnosed and treated with prostrate cancer, Kelleher decided to step down as President and CEO of Southwest in June 2001.
Herb Kelleher has been called perhaps the best CEO in America by Fortune magazine. Under his leadership, Southwest has become the most consistently profitable, productive, and cost-efficient carrier in the industry. It has also earned the "Triple Crown" award for best on-time performance, baggage handling, and customer satisfaction for four years running.
Herb Kelleher’s success at Southwest
Herb Kelleher the CEO of Southwest Airlines possesses the five types of power. He possesses legitimate power due to the CEO position he occupies in the organization and reward power as he controls the greatest number of rewards as the Southwest’s top manager. Coercive power is another type of power he possesses whereby he has the power to force compliance by means of psychological, emotional and physical threat. As indicated in the case, the employees are fiercely loyal to him and whenever he asks for any cooperation the employees react promptly. This implies that he possesses referent power whereby the employees react favorably because they are able to identify with him as partners in the fulfillment of their organizational goals. Finally, he has expert power because under his leadership, Southwest continually soars. He knows when and which decisions to make that keep the Airline above the rest as he continues to expand. Expert power is derived from information or expertise. Some major airlines like United have hub-and-spoke systems connections farther apart; Herb chose to fly frequently between cities not too far apart. An average Southwest flight covers only 700 miles, the average Southwest fare is a mere 86 dollars. The airline flies only one type of aircraft, the 737, which leads to millions more in savings because of flight crew training and plane maintenance expenditures to keep airfares low. The start-up avoided extras such as meal service and got planes in and out of the gate in twenty minutes or less.
"If somebody said to me, Herb, I'd love to be a great coach or a great leader but I don't have the time to do it. My response to them would be, you don't have time to do anything else until you accomplish that." ----------------Herb Kelleher.
Kelleher is both a job-centered and employee-centered leader. He pays close attention to Southwest Airline’s mission to make flying fun. This can be displayed by the way he selects his employees and the training instilled in them to ensure they can perpetuate the Airline’s organizational culture which plays a major role in the success of the organization.
"Coaching has to emanate from the heart rather than the head because people readily recognize the difference between the two."-----------------Herb Kelleher.
As much as he emphasizes performance, he ensures that the employees enjoy their work as well. The way the attendants interact with the passengers and their way of dressing are indications of high degrees of job satisfaction and spirit. Southwest is said to be one of the companies with the lowest turnover rates.
He applies two main leadership theories namely Path-goal theory and Vroom’s Decision Tree approach. He exhibits participative leader behavior when he consults employees regarding cost cutting measures. He draws out suggestions and involves his employees in decision-making processes. He also displays achievement oriented behavior as he sets challenges and expects the employees to perform at high standards, encourages them and shows confidence in them as he expects them to come up with solutions to problems that Southwest Airlines faces. By assessing the situation and deciding to what degree the employees should be involved in decision-making, Kelleher is applying some form of Vroom’s Decision Tree approach. He presents the problem to the employees, gets their suggestions and then decides.
"You need a totally open company where people feel free to talk to one another about anything. You need an environment of trust where people realize that coaching--really is coaching--and not implied criticism." ----------------Herb Kelleher
Kelleher is a transformational leader. He has gone beyond normal expectations by transmitting a sense of mission and inspiring new ways of thinking. He has transformed Southwest Airlines through the years to what it is today. He has achieved what no other Airline has by keeping Southwest Airlines profitable for over thirty years. By consulting employees regarding important issues concerning the organization, he continually changes their ways of thinking, which greatly contributes to the success of the organization not to mention the high morale, and job satisfaction that comes with it.
A Leader or a Manager
Herb Kelleher is both a leader and a manager. What classifies him as a leader is the way he inspires his employees who are ready to go out of their way to get things done. He exercises the various forms of power he possesses to bring out the best in them. His employees accept him as a leader. Given the way the employees responded to the cost cutting challenge, it shows they value his appreciation. His charisma, which inspires loyalty and enthusiasm from his employees, enables him to motivate and inspire change, which keeps Southwest Airline on top of its competition. He communicates the challenges the Airline encounters and asks for cooperation from all employees in line with the team spirit he emphasizes thus aligning employees to make sure everyone is on the same footing. At the inception of the Airline, he had a vision of making flying fun and he has established direction to that effect by for instance, surrounding himself with employees with the right attitude and frame of mind.
As a manager, Kelleher has kept the costs low and profits high. This is in line with the planning aspect of management. In organizing and staffing, he has for instance established guidelines to be followed in the selection of the employees. Also, through controlling and problem solving, he has maintained the profitability of the Airline.
Who will succeed Herb Kelleher?
The CEO who will succeed Kelleher should be a well-focused fun loving person. This is to ensure that the organization culture is kept alive which gives the Southwest Airlines the sustained competitive advantage it has. He or she should be both a leader and a manager and someone of vision. He or she should be someone who is both job centered and employee-centered who holds employees in high esteem and a good promoter of team spirit. He or she can be an initiator of change but change, which strengthens the organizational culture and ensures flexibility and faster decision-making process to maintain the position currently held by the Airline.
Southwest looked for a CEO that would continue to employ the strategic principles that helped the Airline become a profitable company in commercial aviation. Jim Parker embodied the principals by which Herb Kelleher founded the company in 1971.
Parker took over his job because of his strong commitment to keeping the organization running at an optimal level. He was widely depicted as an astute, dedicated, and unselfish executive. His significant caveat was that as a general counsel, he helped negotiate an innovative 10-year pilot contract in 1995 which encouraged the union to agree on a freeze pay for five years in exchange for stock options. As general counsel, he learned significantly from Kelleher about the organizational behavior and the inter-workings within all the personnel divisions.
His successful tenure as CEO will be judged by his ability to lead by example. The chief executive has already made significant provisions to keep costs down by having the airline devote its resources toward creating winglet technology for its 737-700 aircraft. This allowed the airline to save up to an average of 92,000 gallons of jet fuel per plane per year.
Many business analysts assert that to survive without Kelleher’s guidance, Southwest must be able eradicate internal dissention and the threat of new entrants that might steal some of the Airline’s corporate secrets. One current example of turmoil at Southwest is that the flight attendants are dissatisfied with their current labor contract. Union members are already attempting create a negative campaign against their company by informing them of the working conditions at Southwest. They are extremely dissatisfied with their work schedule, the longer flights, and the working environment is not as harmonious as in the past. But Southwest may be resilient in this particular conflict because of their history of ameliorating any calamity involving its large-union worker population. Management carefully uses strategic methods in dispute resolution to resolve contract disputes because they want to improve overall job satisfaction.
