Southwest Airlines (NYSE:LUV) has been a leader in the airline industry, known for its financial success and its unique culture built by co-founder Herb Kelleher. Southwest’s innovative approach made it the largest U.S. domestic airline, surpassing competitors like American Airlines, Delta Air Lines, and United Airlines. However, as the airline faces pressure to adapt to a rapidly evolving market, its culture—once considered its most valuable asset—is undergoing a significant test. New leadership and external pressures are demanding significant changes, putting Southwest Airlines’ culture under unprecedented scrutiny.
The Shift in Strategy
Southwest Airlines’ success was built on a distinct model emphasizing simplicity and efficiency. A single class of service and no assigned seats were core to this model, allowing Southwest to turn planes around quickly and operate more flights per day than its rivals. This approach, coupled with a strong company culture, enabled Southwest to remain profitable for 47 consecutive years, a record unmatched by any other airline worldwide.
However, CEO Bob Jordan, alongside activist investor Paul Singer, has introduced plans that deviate from Kelleher’s original vision. They recognize the need for changes, such as introducing assigned seating and possibly a premium class. While these adjustments may seem necessary to keep pace with industry trends, they also pose a risk to the Southwest Airlines culture that has been central to its success.
The Importance of Culture
Herb Kelleher was a strong advocate for the power of culture. He frequently emphasized that while competitors could replicate Southwest’s operational strategies, they could never duplicate its culture. “Culture has everything to do with it,” Kelleher once said. This culture wasn’t just about employee satisfaction; it was a crucial factor in ensuring the airline’s smooth operations. When faced with tight schedules and unforeseen challenges, Southwest employees went above and beyond, often taking on roles outside their usual duties to keep things running smoothly.
This culture also translated into customer experiences unique to Southwest. The lack of assigned seating, for instance, was softened by the friendly and often playful interactions passengers had with the staff. It wasn’t uncommon for flight attendants to add a personal touch—whether by hiding in overhead bins to surprise passengers or by singing a fun song during the descent. These moments, small as they might seem, were reflections of a culture that valued both efficiency and a positive customer experience.
The Risks of Change
The proposed changes to Southwest’s model, particularly the introduction of assigned seating and a potential premium class, could undermine this culture. Assigned seating, while accommodating customer preferences, would eliminate the current system that allows Southwest to board and turn around planes quickly. The introduction of a premium class would require fewer seats, which could disrupt the operational efficiency that has been key to Southwest’s success.
Furthermore, these changes could erode the unique work environment that Kelleher cultivated. The Southwest Airlines culture thrives on simplicity and a shared sense of purpose among employees. As the company becomes more like its competitors, it risks losing the very spirit that has set it apart for decades.
The Legacy of Herb Kelleher
As Southwest navigates these turbulent changes, the question many are asking is, “What would Herb do?” Kelleher was always open to change when necessary, but he was also acutely aware of the risks involved in altering the company’s core values. His biggest fear, as he once expressed, was that the airline might lose its “esprit de corps, the culture, the spirit.” This fear seems particularly relevant today as Southwest’s leadership contemplates changes that could fundamentally alter the company’s identity.
Conclusion
The Southwest Airlines culture is at a pivotal moment. While changes may be necessary to remain competitive, they must be carefully balanced with the preservation of the company’s core values. As Southwest moves forward, it is crucial to remember that its culture is more than just a feel-good element—it is the backbone of its success. Losing this culture could mean losing the very essence of what made Southwest Airlines a leader in the industry. The decisions made today will determine whether Southwest can continue to thrive while staying true to the principles that Herb Kelleher championed.