Low costs, personality key to airline's success


September 26, 1994|By TOM PETERS

"There are 50 ways to leave your lover, but only six exits from this airplane" -- start of a safety announcement from Southwest Airlines.

"Better quality plus lesser price equals value, plus spiritual attitude of our employees equals unbeatable" -- CEO Herb Kelleher on Southwest Airlines' success formula.

Southwest Airlines is so far ahead of the competition it hardly seems fair.

Its costs are much lower. So is airport turnaround time. Its youthful aircraft fleet logs many more flights than other carriers'. Wages are high, but productivity is even higher.

That's why the airline, now serving 41 cities, is so consistently profitable in an industry stuck in intensive care. Southwest also tops customer service polls -- and, according to one prestigious survey, was rated safest airline over the last 20 years.

What's the secret? The grand scheme is simple, even elegant. (Short hauls only, no baggage transfer, no food, no seat assignments, one type of aircraft, etc.)

But there's more: Southwest has soul.

Or, as the airline's larger-than-life CEO, Herb Kelleher, puts it, "We defined a personality as well as a market niche. [We seek to] amuse, surprise, entertain."

Kelleher is as shrewd a businessman as I've met. But it's his humanness that's so exceptional.

He easily peppers his remarks with "love" (the airline's stock symbol is LUV), "fun," "spirituality." He rips CEOs who sit on numerous outside boards and hang out mostly with one another. Kelleher insists he gets his kicks being around Southwest's people.

"They are restorative and rejuvenating for me," he told me. "Ponce de Leon was looking in the wrong place when he sought the fountain of youth in Florida. The people of Southwest are the fountain of youth." (And the funny thing is, when you've been around Kelleher for a while, you're sure he means it.)

While Kelleher gives his customers a great deal and a great time, he's clear that the people of Southwest come first -- even if it means firing customers!

Are customers always right? "No they are not," Kelleher snaps. "And I think that's one of the biggest betrayals of your people you can possibly commit. The customer is frequently wrong. We don't carry those sorts of customers. We write them and say, 'Fly somebody else. Don't abuse our people.' "

Such beliefs -- and actions -- make Southwest one of the 10 best places to work in America, according to the authors of "The 100 Best Companies to Work for in America."

To be allowed to join Southwest's game, you undergo an intense hiring process that includes at least a half-dozen interviews. But you won't be subjected to psychological tests.

"What we are looking for first and foremost is a sense of humor," Kelleher told Fortune magazine.

"Then we are looking for people who have to excel to satisfy themselves and who work well in a collegial environment," Kelleher explained. "We don't care that much about education and experience, because we can train people to do whatever they have to do. We hire attitudes."

Colleen Barrett, executive vice president for customers (she began at Southwest as a secretary in 1971), told me the airline looks for "listening, caring, smiling, saying thank you and being warm" -- in accounting hires as much as reservation agents and flight attendants.

The spirited, yeasty work force is also flexible. Though unionized to the hilt, anyone will help anyone else in a pinch.

"Our people are results-oriented, not process-oriented," Kelleher says. "They're not form-oriented; they don't focus on the organization hierarchy or position or title."

So this, then, is a profitable, no-frills airline?

Whoops! Don't you dare use "no frills" anywhere near Barrett, who responded to such a claim, "Oh, no, no -- not 'no frills.' A frill is something extra special. And we offer something extra special every day."

For Southwest, cheap means "more for less, not less for less," said one exec.

Kelleher's magic -- matchless business acumen and oversized heart -- has led the way to 21 straight years of black ink in a viper pit of an industry.

In the early days, Braniff (which, with the help of a few friends, blocked Kelleher's efforts to take off for almost five years) undercut Southwest's bargain-basement $26 fares.

Kelleher's response to Braniff's $13 ticket price was to give his passengers an only-on-Southwest choice: $13, to match Braniff -- or the regular $26 fare plus a bottle of premium liquor.

Southwest ended up distributing a lot of booze.

Tom Peters is a syndicated columnist. Write to him at Tribune Media Services Inc., Suite 1500, 435 N. Michigan Ave., Chicago, Ill. 60611; (800) 245-6536

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