The Southwest Airlines Way : Using the Power of Relationships to Achieve High Performance

Management lessons from the world's most profitable airline "If you want to understand how one organization can change the competitive rules of the game for an entire industry, read this book."--James L. Heskett, Baker Foundation Professor, Harvard Business School and Coauthor of The Value-Profit Chain Fortune magazine calls Southwest Airlines "the most successful airline in history." With a market value greater than the rest of the U.S. airline industry combined, Southwest Airlines is an amazing company with amazing management practices. Drawing on extensive research and interviews with frontline Southwest employees, managers, and senior executives­­The Southwest Airlines Way explains how Southwest's relationship-based performance principles can be adopted by managers in any industry, with dramatic results. Full of frontline tales of Southwest's innovative management style, this compelling book explains how Southwest's relentless focus on high-performance relationships and its people-management practices have been the key to its unparalleled success in the airline industry. It reveals how any organization willing to invest the time and effort can learn from Southwest's management style by creating shared goals, shared knowledge, and mutual respect among management, employees, and suppliers. This is the secret of how Southwest consistently outperforms its competitors in the high-pressure, timesensitive airline industry. Copyright......Page 5 Contents......Page 7 Preface......Page 13 Acknowledgments......Page 17 PART 1 High Performance Relationships......Page 19 CHAPTER 1 From Love Field to the World’s Most Successful Airline......Page 21 Quality......Page 24 Controlled Growth......Page 25 Demand for Reliable Low-Fare Travel......Page 26 Competitive Threats......Page 27 Success Factors—Leadership, Culture, Strategy, and Coordination......Page 30 Behind These Success Factors—High Performance Relationships......Page 34 The Productivity Disadvantages of Short-Haul Flying......Page 36 Coordination through High Performance Relationships......Page 40 Other Possible Responses to the Same Challenges......Page 41 Summing Up......Page 42 CHAPTER 3 Southwest versus American Airlines......Page 43 Communication......Page 44 Relationships......Page 47 Coordinating through Relationships......Page 53 Southwest versus Continental, American, and United: Relational Coordination Pays Off......Page 56 Findings......Page 57 Improving Both Quality and Efficiency......Page 59 Why Relational Coordination Works: The Power of Collective Identity......Page 60 The Challenge of Coordinating Patient Care......Page 62 Performance Effects of Relational Coordination......Page 64 Findings......Page 65 When Relational Coordination Matters Most for Performance......Page 66 Summing Up......Page 69 PART 2 Ten Southwest Practices for Building High Performance Relationships......Page 71 CHAPTER 5 CHAPTER Lead with Credibility and Caring......Page 74 Leadership at Southwest Airlines......Page 75 Leadership at Continental Airlines......Page 77 Leadership at United Airlines......Page 80 Leadership at American Airlines......Page 81 Southwest’s Leadership Transition......Page 86 Southwest’s Top Management Team......Page 87 Summing Up......Page 90 CHAPTER 6 Invest in Frontline Leadership......Page 91 Supervision at Southwest Airlines......Page 92 Benefits of High Supervisory Staffing Levels......Page 94 Supervision at United Airlines......Page 95 Supervision at American Airlines......Page 97 The Case for Reduced Supervisory Staffing......Page 99 The Case for Increased Supervisory Staffing......Page 100 Summing Up......Page 101 CHAPTER 7 Hire and Train for Relational Competence......Page 103 Hiring and Training at Southwest Airlines......Page 104 Benefits of Hiring for Relational Competence......Page 109 Hiring and Training at United Airlines......Page 110 Hiring and Training at Continental Airlines......Page 113 Hiring and Training at American Airlines......Page 114 Summing Up......Page 117 CHAPTER 8 Use Conflicts to Build Relationships......Page 119 Conflict Resolution at Southwest Airlines......Page 120 Conflict Resolution at United Airlines......Page 123 Conflict Resolution at Continental Airlines......Page 126 Conflict Resolution at American Airlines......Page 127 How Conflict Resolution Evolved at Southwest......Page 128 Summing Up......Page 130 CHAPTER 9 Bridge the Work/ Family Divide......Page 132 Encouraging Employees to Be Themselves at Work......Page 134 Recognizing Personal Pain and Triumph......Page 136 The Culture Committee......Page 137 Giving to the Community......Page 138 Efforts to Bridge the Work/Family Divide......Page 139 Summing Up......Page 140 CHAPTER 10 Create Boundary Spanners......Page 142 Boundary Spanning at Southwest Airlines......Page 144 Benefits of the Boundary Spanner Role......Page 146 Boundary Spanning at Continental Airlines......Page 147 Boundary Spanning at American Airlines......Page 148 Southwest’s Boundary Spanners in Action......Page 150 Summing Up......Page 155 CHAPTER 11 Avoid Finger Pointing—Measure Performance Broadly......Page 157 Performance Measurement at Southwest Airlines......Page 158 Benefits of Cross-Functional Performance Measurement......Page 159 Performance Measurement at United Airlines......Page 160 Performance Measurement at Continental Airlines......Page 162 Performance Measurement at American Airlines......Page 164 Accountability versus Learning......Page 167 A Different Approach to Performance Measurement at Southwest......Page 170 Summing Up......Page 171 CHAPTER 12 Keep Jobs Flexible at the Boundaries......Page 173 Job Flexibility at Southwest Airlines......Page 174 Job Flexibility at Continental Airlines......Page 176 Job Flexibility at United Airlines......Page 178 Job Flexibility at American Airlines......Page 180 Why Flexible Boundaries Are So Uncommon......Page 181 Summing Up......Page 182 CHAPTER 13 Make Unions Your Partners, Not Adversaries......Page 183 Labor Relations at Southwest Airlines......Page 186 Labor Relations at Continental Airlines......Page 190 Labor Relations at United Airlines......Page 192 Labor Relations at American Airlines......Page 196 Summing Up......Page 199 CHAPTER 14 Build Relationships with Your Suppliers......Page 201 Partnering with Airports......Page 202 Partnering for Security after September 11, 2001......Page 204 Partnership Challenges......Page 205 Partnering with Air Traffic Control......Page 207 Partnering with Aircraft Manufacturers......Page 208 Benefits of Partnering with Your Suppliers......Page 209 Summing Up......Page 211 PART 3 Building High Performance Relationships—And Keeping Them......Page 213 CHAPTER 15 How the Ten Southwest Practices Reinforce (or Undermine) Each Other......Page 215 Lead with Credibility and Caring......Page 217 Hire and Train for Relational Competence......Page 218 Use Conflicts to Build Relationships......Page 219 Bridge the Work/Family Divide......Page 220 Measure Performance Broadly......Page 221 Keep Jobs Flexible at the Boundaries......Page 222 Build Relationships with Your Suppliers......Page 223 Summing Up......Page 224 CHAPTER 16 Learning from Southwest......Page 226 Efforts by Other Airlines to Learn from Southwest......Page 227 American Airlines......Page 229 Continental Lite......Page 233 The United Shuttle......Page 237 JetBlue Airways......Page 240 Summing Up......Page 246 CHAPTER 17 Thriving under Pressure—Southwest’s Response to September 11 and Other Crises......Page 248 Resilience in the Face of Competition......Page 249 Resilience in the Face of Growth......Page 251 US Airways’ Response......Page 254 American Airlines’ Response......Page 257 Continental Airlines’ Response......Page 259 Southwest Airlines’ Response......Page 260 Layoffs as a Response to Crisis......Page 261 The Role of Financial Reserves......Page 262 Summing Up......Page 265 CHAPTER 18 Implementing High Performance Relationships in Your Organization......Page 268 Lead with Credibility and Caring......Page 269 Invest in Frontline Leadership......Page 270 Hire and Train for Relational Competence......Page 271 Use Conflicts to Build Relationships......Page 273 Create Boundary Spanners......Page 274 Measure Performance Broadly......Page 276 Keep Jobs Flexible at the Boundaries......Page 278 Make Unions Your Partners, Not Adversaries......Page 280 Build Relationships with Your Suppliers......Page 281 Maintain Financial Reserves......Page 282 Summing Up......Page 284 Appendixes......Page 285 Endnotes......Page 305 Index......Page 329 Copyright 5 Contents 7 Preface 13 Acknowledgments 17 PART 1 High Performance Relationships 19 CHAPTER 1 From Love Field to the World’s Most Successful Airline 21 Efficiency 24 Quality 24 Controlled Growth 25 Demand for Reliable Low-Fare Travel 26 Competitive Threats 27 Success Factors—Leadership, Culture, Strategy, and Coordination 30 Behind These Success Factors—High Performance Relationships 34 CHAPTER 2 How Southwest Uses High Performance Relationships to Overcome Strategic Challenges 36 The Productivity Disadvantages of Short-Haul Flying 36 Achieving Quick Turnarounds 40 Coordination through High Performance Relationships 40 Other Possible Responses to the Same Challenges 41 Summing Up 42 CHAPTER 3 Southwest versus American Airlines 43 Communication 44 Relationships 47 Coordinating through Relationships 53 Southwest versus Continental, American, and United: Relational Coordination Pays Off 56 Findings 57 Improving Both Quality and Efficiency 59 Why Relational Coordination Works: The Power of Collective Identity 60 CHAPTER 4 How Relational Coordination Works in Other Industries 62 The Challenge of Coordinating Patient Care 62 Performance Effects of Relational Coordination 64 Findings 65 When Relational Coordination Matters Most for Performance 66 Summing Up 69 PART 2 Ten Southwest Practices for Building High Performance Relationships 71 CHAPTER 5 CHAPTER Lead with Credibility and Caring 74 Leadership at Southwest Airlines 75 Leadership at Continental Airlines 77 Leadership at United Airlines 80 Leadership at American Airlines 81 Southwest’s Leadership Transition 86 Southwest’s Top Management Team 87 Summing Up 90 CHAPTER 6 Invest in Frontline Leadership 91 Supervision at Southwest Airlines 92 Benefits of High Supervisory Staffing Levels 94 Supervision at Continental Airlines 95 Supervision at United Airlines 95 Supervision at American Airlines 97 The Southwest Difference 99 The Case for Reduced Supervisory Staffing 99 The Case for Increased Supervisory Staffing 100 Summing Up 101 CHAPTER 7 Hire and Train for Relational Competence 103 Hiring and Training at Southwest Airlines 104 Benefits of Hiring for Relational Competence 109 Hiring and Training at United Airlines 110 Hiring and Training at Continental Airlines 113 Hiring and Training at American Airlines 114 Summing Up 117 CHAPTER 8 Use Conflicts to Build Relationships 119 Conflict Resolution at Southwest Airlines 120 Benefits of Conflict Resolution 123 Conflict Resolution at United Airlines 123 Conflict Resolution at Continental Airlines 126 Conflict Resolution at American Airlines 127 How Conflict Resolution Evolved at Southwest 128 Summing Up 130 CHAPTER 9 Bridge the Work/ Family Divide 132 Encouraging Employees to Be Themselves at Work 134 Recognizing Personal Pain and Triumph 136 Employee and Family Identification with the Organization 137 The Culture Committee 137 Giving to the Community 138 Efforts to Bridge the Work/Family Divide 139 Preventing Work from Overwhelming Family and Community 140 Summing Up 140 CHAPTER 10 Create Boundary Spanners 142 Boundary Spanning at Southwest Airlines 144 Benefits of the Boundary Spanner Role 146 Boundary Spanning at United Airlines 147 Boundary Spanning at Continental Airlines 147 Boundary Spanning at American Airlines 148 Southwest’s Boundary Spanners in Action 150 The Boundary Spanner as Relationship Builder 155 Summing Up 155 CHAPTER 11 Avoid Finger Pointing—Measure Performance Broadly 157 Performance Measurement at Southwest Airlines 158 Benefits of Cross-Functional Performance Measurement 159 Performance Measurement at United Airlines 160 Performance Measurement at Continental Airlines 162 Performance Measurement at American Airlines 164 Accountability versus Learning 167 A Different Approach to Performance Measurement at Southwest 170 Summing Up 171 CHAPTER 12 Keep Jobs Flexible at the Boundaries 173 Job Flexibility at Southwest Airlines 174 Benefits of Job Flexibility 176 Job Flexibility at Continental Airlines 176 Job Flexibility at United Airlines 178 Job Flexibility at American Airlines 180 Why Flexible Boundaries Are So Uncommon 181 Summing Up 182 CHAPTER 13 Make Unions Your Partners, Not Adversaries 183 Labor Relations at Southwest Airlines 186 Labor Relations at Continental Airlines 190 Labor Relations at United Airlines 192 Labor Relations at American Airlines 196 Summing Up 199 CHAPTER 14 Build Relationships with Your Suppliers 201 Partnering with Airports 202 Partnering for Security after September 11, 2001 204 Partnership Challenges 205 Partnering with Air Traffic Control 207 Partnering with Aircraft Manufacturers 208 Benefits of Partnering with Your Suppliers 209 Summing Up 211 PART 3 Building High Performance Relationships—And Keeping Them 213 CHAPTER 15 How the Ten Southwest Practices Reinforce (or Undermine) Each Other 215 Lead with Credibility and Caring 217 Invest in Frontline Leadership 218 Hire and Train for Relational Competence 218 Use Conflicts to Build Relationships 219 Bridge the Work/Family Divide 220 Create Boundary Spanners 221 Measure Performance Broadly 221 Keep Jobs Flexible at the Boundaries 222 Make Unions Your Partners, Not Adversaries 223 Build Relationships with Your Suppliers 223 Summing Up 224 CHAPTER 16 Learning from Southwest 226 Efforts by Other Airlines to Learn from Southwest 227 American Airlines 229 Continental Lite 233 The United Shuttle 237 JetBlue Airways 240 Summing Up 246 CHAPTER 17 Thriving under Pressure—Southwest’s Response to September 11 and Other Crises 248 Resilience in the Face of Competition 249 Resilience in the Face of Growth 251 Response to the Crisis of September 11, 2001 254 US Airways’ Response 254 American Airlines’ Response 257 Continental Airlines’ Response 259 Southwest Airlines’ Response 260 Layoffs as a Response to Crisis 261 The Role of Financial Reserves 262 Summing Up 265 CHAPTER 18 Implementing High Performance Relationships in Your Organization 268 Lead with Credibility and Caring 269 Invest in Frontline Leadership 270 Hire and Train for Relational Competence 271 Use Conflicts to Build Relationships 273 Bridge the Work/Family Divide 274 Create Boundary Spanners 274 Measure Performance Broadly 276 Keep Jobs Flexible at the Boundaries 278 Make Unions Your Partners, Not Adversaries 280 Build Relationships with Your Suppliers 281 Maintain Financial Reserves 282 Summing Up 284 Appendixes 285 Endnotes 305 Index 329 In an industry that regularly loses billions of dollars, Southwest Airlines has an unbroken string of 31 consecutive years of profitability. How do they do it? In The Southwest Airlines Way, you’ll learn the key to Southwest’s success—high performance relationships based on shared goals, shared knowledge, and mutual respect among all levels of management, employees, and suppliers.This in-depth profile, based on eight years of field research on the airline industry, reveals 10 practices that Southwest Airlines uses to build high performance relationships, and how they can be implemented in any organization—with dramatic results. You’ll learn how to implement Southwest-style management practices while learning from the successes and failures of American, United, Continental, and other airlines as they have struggled to adopt Southwest’s practices.Why is Southwest Airlines valued higher than all other major U.S. passenger air carriers combined?How, in the wake of September 11, could Southwest keep all of its employees working and continue its unblemished record of growth and profitability as other airlines laid off thousands, begged Congress for money, and filed for Chapter 11 bankruptcy protection?Can the now-legendary “Southwest effect” be applied successfully in other industries?In The Southwest Airlines Way, you’ll find the answers to these questions and more. 'If you look at Southwest Airlines, and I admire what they do, they've been the most successful airline in the industry.' --Gerard Arpey, CEO, American Airlines 'Through extensive research Jody Hoffer Gittell gets to the bottom of what has sustained Southwest Airlines' positive employee relations and high performance through good and bad times.' --Thomas A. Kochan, professor, MIT Sloan School of Management, MIT Global Airline Industry Program In an industry with losses in the billions, Southwest Airlines has an unbroken string of 31 consecutive years of profitability. The Southwest Airlines Way examines how the company uses high-performance relationships to create enormous competitive advantage in motivation, teamwork, and coordination among employees. It then goes further to show how any company can foster these powerful cooperative relationships and explains how to: Lead with credibility and caring Invest in frontline leaders Hire and train for relational competence Use conflicts to build relationships Make unions its partners, not its adversaries Build relationships with its suppliers "The Southwest Airlines Way explores the policies, strategies, and techniques that have led to Southwest's success and explains how these proven methods can be put to work in any organization. It explains how American, Continental, United, and other airlines have tried to imitate Southwest - and why they have failed. Based on Professor Jody Hoffer Gittell's eight years of field research in the airline industry, this book unveils the secret ingredient - high performance relationships - that has enabled Southwest to sustain a steady 10 to 15 percent rate of growth throughout its 32-year history while turning a profit in every year but its first."--BOOK JACKET. The original low cost operator, Southwest Airlines is now one of the world's most profitable airlines. This book examines the relationship-based performance principles & innovative management that have driven this company to the top of the league SOUTHWEST AIRLINES HAS been profitable every year for 31 years-an unsurpassed record in the highly turbulent, frequently unprofitable, airline industry.