The mission of Southwest Airlines, as described in the case study, is to provide air travel at a low cost while caring for its employers. The operational philosophy upheld by the company is to achieve its mission by reducing turnaround time to a minimum and, by doing so, to create an opportunity for cheaper tickets. As such, the company’s philosophy largely amounts to being ‘lean and mean’ and operating with peak efficiency within a short timeframe to enable a broad range of point-to-point flights at affordable prices. Naturally, this approach requires having motivated and well-trained personnel willing to work swiftly and efficiently as well as the organizational culture supporting and promoting such functioning. The key components of Southwest’s culture are informality and the tightly-knit family-like attitude adopted within the company. On the one hand, the employees are encouraged to have fun at work, wear comfortable or funny clothes, and address their CEO by name only. On the other hand, the ‘small company’ attitude – inclusive, simple, and straight to the point – allows the employees to feel important and valued and understand their individual contribution to the company’s operation better.
Herbert Kelleher’s leadership during his tenure as the company’s CEO was arguably crucial in shaping its organizational culture, which is why it deserves a more detailed discussion. Kelleher spent much effort to shape and promote the attitudes that enabled the employees to perceive their company as a second family and return the favor by being precise and efficient at work. His insistence that the employees would simply call him ‘Herb’ of ‘Herbie’ regardless of their place in hierarchy created an atmosphere of friendliness and even familiarity within Southwest. Additionally, his style of ‘management by fooling around’ ensured that the employees felt comfortable at their positions. Importantly, Kelleher’s lenience toward having a fun time at work did not undermine the efficiency. On the contrary, he made it so that the company’s personnel could and was expected to have a good time at work as long as they were quick and precise. Thus, Kelleher’s leadership was paramount for shaping the informal and highly efficient culture. A different leader could certainly change it – for example, insisting on more formality and a more serious attitude could undermine the culture of ‘professionalism worn lightly.’
It is quite likely that organizational culture was one of the – if not the single most important – factor that ensured Southwest’s survival and profitability in a highly competitive industry. Maintaining direct and positive communication, encouraging people to have fun, and rewarding them for their contributions, as in the “Winning Spirit” awards, builds up loyalty. It also makes individual employees more aware of their place in the grand scheme of things. As a result, the personnel are not only willing to reciprocate and be their best selves at work but also become more conscious of the collective effort and the importance of their individual contribution. The result is the well-motivated workforce that is crucial for Southwest’s operational philosophy of being cheap by being quick.
The decision to avoid layoffs in the immediate aftermath of the 9/11 attacks was an extension of the aforementioned culture of caring for one’s employees. Its main intent was likely the same as behind the company’s organizational culture as a whole: to build loyalty by showing that Southwest treats its personnel as a family rather than merely business assets. Judging by the fact that Southwest still is a major airline and one of the world’s largest low-cost carriers – and a consistently profitable one at that – it means its workforce remains as dedicated as ever. Thus, one can conclude that the decision paid off because Southwest’s no-layoff policy traded severe short-term losses for long-term advantages of having a loyal workforce of motivated professionals.