For business executives and Culture enthusiasts alike, Southwest Airlines has attained an iconic status that is almost unparalleled. Since its maiden flight in March 1971, the organization has garnered almost every accolade and award possible for leadership, innovation and Culture including consistently placing in Fortune Magazine’s coveted “The World’s Most Admired Companies”. So how does a plucky airline, operating in one of the most competitive categories on the planet, continue to win awards, enjoy legendary levels of customer and employee devotion and loyalty and still operate as a low-cost carrier? Time and again, the answer points to Southwest Airlines unique Culture. I had the wonderful privilege of chatting with Cheryl Hughey, Managing Director Culture at Southwest Airlines to understand her perspective and understand what has allowed Southwest to create such a unique environment.

HB: Cheryl, this is a real pleasure and I appreciate you taking the time to talk Culture. With Culture becoming such a key management topic, you must be inundated with these calls.

CH: <Laughs> We certainly love to talk to folks who are interested in Southwest and our Culture. We believe we have something special here and are proud to demonstrate the heart that makes us Southwest. We try to share our story with those who are genuinely interested when we can.

HB: I always try to ground these conversations in that topical word “transformation”. Can you talk to me about the transformation that Southwest, or your sector, is going through right now and the direct impacts that’s having on your people and your Culture?

CH: Transformation isn’t really a phrase we use. We prefer Evolution because that’s more aligned with how we think and operate. We’ve been on our journey for 47 years and now have almost 60,000 employees but we’ve always been about being nimble, being customer and Employee focused and being swift and decisive to keep us competitive. That has always been in our DNA but we’re now thinking about different ways we have to deliver on that.

What has been critical for all of us at Southwest has been to clarify our Intent, and not just our Aspiration, as we move forward.

That intent is captured in our Vision, which is “To become the world’s most loved, the most flown and the most profitable airline”

The simplicity of that line means we all have absolute clarity on our intent – and we can start to focus our individual and collective energies against that.

HB: That’s certainly a very bold vision. Why has that been important to develop for Southwest?

CH: To be honest, clarity of our Vision has only come into focus in the last five years. Our Values, which we historically referred to as the Southwest Spirit, propels us to reach our Vision. The Values are what we now call Living and Working the Southwest Way with three main tenets: Warrior Spirit, Servant’s Heart, and Fun-LUVing Attitude. These Values encapsulate many of the fantastic behaviours and attitudes of our people. Clarifying these expectations for all Employees was a critical component we needed to make– particularly as we’re now hiring upwards of 8,000 people each year.

Where the Vision has had significant impact is that it sets up a charge for everyone to perform as one Team to achieve. It clarifies what is imperative for our employees to focus on and why that focus matters.

That then cascades down to specific actions like “what are we recruiting for?” “What are we holding employees accountable to?”, “What do we need to equip our people and leaders with to be successful?” and “How and what do we reward and recognize?”

Ultimately, for each one of us this Vision defines what is expected of us individually, how will we be held accountable to that expectation by Southwest and, equally important, what reciprocal expectations should we have of Southwest. That clarity is critical.

HB: That’s a monumental undertaking for a company of 60,000 and growing. How have you instilled this Vision and clarity across the organization?

CH: We have a very important tradition here that we call “Rally Season” each February. Its where our entire Executive team physically gets out in front of our teams and makes themselves available for questions, for sharing stories about where the organization is going and, as you said earlier, how we keep trying to get better in such a competitive market.

Of course, because its Southwest, we have a lot of fun with it too. And while its not entirely about having our CEO Gary Kelly appear in a Halloween costume, which he has done, it is about showing that each of us are held to the same Southwest expectations – which includes never taking ourselves too seriously.

What we do take very seriously though is communicating that competing against ourselves is not part of our Culture here at Southwest. That means demonstrating, at all levels, Respect, Care and Collaboration are critical to our organization’s well-being.

If we constantly demonstrate that care, respect and collaboration to our employees then it becomes something that they naturally demonstrate and live with our customers.

That is why, culturally, the “Rally Season” is so important for all of us at Southwest.

HB: I’d love to see those pictures of Gary by the way. Rally Season highlights what seems to be an incredible commitment to Culture – and all employees – here at Southwest. Why isn’t that commitment more prevalent across other organizations do you think? 

CH: I’m sure we can dig out a few photos of Gary. <laughs>

 

While I can’t speak for other organizations, here at our commitment to these efforts is never up for debate. The amount of heart our founder Herb Kelleher had for our Culture was legendary, and our current CEO Gary Kelly is remarkably similar in that way. I’m very fortunate to have frequent discussions with him and the sensitivity he has for our people is incredible. He is always asking if we’re doing the right thing by our people and ensuring that they feel the Southwest love.

Culture can’t be a program and it certainly can’t be something you switch on and off depending on how your organization is performing. That just signals that its lip service and not really that important to your leadership. And employees know that. You can’t hide that from them.

Culture has been something we’ve believed in from Day 1 and we’d not sacrifice that commitment and investment for anything. Otherwise we couldn’t legitimately call ourselves the company with Heart. That’s very important.

HB: That is a fantastic orientation and Southwest is fortunate to have had a founder with that enlightened perspective. However, I see any number of organizations operating under a perpetual 90-day or quarterly cycle where they’ll make decisions in the short-term because of market pressure. Can you comment on staying true while under significant pressure to perpetually grow?

CH: I can certainly understand that pressure and we’re certainly not immune to that call for growth and financial returns. Let me give you an example of how our commitment plays out and why we believe it is the right approach to achieve that growth and those returns.

Seven years ago we acquired this incredible airline called AirTran. To give you a sense, that meant integrating 8,000 AirTran employees – many who proudly and genuinely loved their company – with 35,000 Southwest employees. That is no small undertaking but it was critical to us that we were particularly sensitive to how we manage the Cultural integration piece. After all, AirTran had some fantastic traditions and celebrations and their employees felt passionately about their airline.

And we certainly didn’t want to lose any of that as so often happens in acquisitions and mergers.

Our consultants at the time were amazed that we were so concerned by that because they hadn’t seen that be a consideration in other acquisitions or mergers they’d done. But it was critical to us.

“How would an AirTran person feel about that gesture?”

“How might we get an AirTran person to actively be part of this transformation?”

Ultimately it came down to “acting with heart” as we always try to do here. If in difficult times we always chose to act with a good intent and make sure our focus is on leading with heart, we’re confident we’ll do the right thing. Not always of course but more times than not.

In the end we created a “Wingmate” process where each and every AirTran person was paired with a Southwest person so they could get to know each other personally, share stories and get to know how we were actually remarkably similar in how we operated. Ultimately it was about doing everything to create a genuine “One Team” attitude which is very close to our heart.

Our consultants were surprised but, for Southwest, these decisions aren’t just about a positive financial outcome but it’s as important that the Cultural outcome is positive too.

HB: Wow, that really is a commitment to Culture. Particularly in an activity like an M&A. Kudos. Is there ever been situations where you’ve gotten the Culture piece wrong? Where you’ve misread your employees or over-stepped? Does that ever happen here?

CH: I’d love to say we always get it right. We don’t. It is a very fine line to ensure that we always have the employee voice present in the decisions we’re making and we certainly have many amazing employee councils feeding into the process. That’s about being diligent. But even then, we make mistakes.

Here’s an example that might seem small to an outsider but it was significant for our employees.

When we undertook our beautiful brand refresh five years ago – putting that beautiful heart on all our aircraft, uniforms etc – we unveiled a new design for our service anniversary commemorative pins. You have to understand how these pins are cherished in our industry because they symbolize tenure and, in many ways, that person’s commitment to an airline. It’s huge.

Well when we unveiled the newly designed pins there was a huge employee outcry. How could we change an icon like that? Why were we changing the culture here at Southwest? So we took this to our CEO Gary and he said “Okay, maybe we need to just pause on this part of the refresh project and engage our people a little more” So we went out to get employee comments – and did we get a lot – but we also asked them to submit ideas, submit designs and so on.

Ultimately we arrived at a design that our employees adored. Equally important we showed that we could acknowledge where we’d made a mistake and how we’d tried to genuinely address that. It was a small example – especially when viewed from the outside – but it was an important example of that caring, respectful Southwest attitude we talked about at the beginning.

HB: For an organization with such a commitment to people, you must be drowning in job applications to join Southwest. How do you handle recruitment and training in a way that ensures you’re positively impacting your Culture?

CH: We are very fortunate that we do receive a large number of applications to join Southwest. Its important to point out – back to those expectations – that each new opportunity is posted internally first. That’s about ensuring our people who’ve grown here at Southwest get the first opportunity to keep growing.

To give you a measure we have had over 28,000 applications for 1,400 flight attendant roles. But its not just about the numbers its about ensuring we can align for Values fit and that processes like our Onboarding efforts are aligned too. After all, Onboarding is the start of our relationship with an Employee and it’s a key moment to highlight our promise to them around care and respect. It sets the tone for living up to the expectations we have of each other.

The other part is the changing face and expectations of the workforce. We talk a lot about Millennials and their job expectations but we think it’s as critical to think about Boomerangers who leave but want to come back. We’re seeing Millennials being around 50% of our New Hires and setting up expectations with that group is just part of an inevitable evolution we’re going through. We’re certainly very proud of how low our turnover is – less than 3% which is remarkable – but we also need to set that number in the right context. Certainly many people join us as their 1st job and it either isn’t what they thought it was going to be, which is okay, or – as we’re seeing with some of our Employees – that this job is a stepping stone to another adventure or a different path. That’s okay too.

HB: Cheryl, this has been incredibly insightful and an absolute delight. I always ask my interviews what advice they have for others grappling with these Culture related questions and struggles. What advice do you have to share?

CH: Well that’s very kind but we certainly don’t have all the answers. What we are always happy to do is share the lessons we have learned.

Here’s a few that stick with me from my time here at Southwest.

Do you have the right leaders in place? Leaders that are absolutely committed to leading according to the values your organization has determined are critical.

Are you absolutely clear on what those values are? Clear in terms of what expectations are set for your people and what your people can expect of the organization. That two-way street is crucial.

Finally, what is the commitment you’re prepared to make in real terms – that means actual dollars, actual time and actual people devoted to this – inside your company.

Like any endeavor the outcome is directly related to the commitment you’re prepared to make.

I hope that answered your question Hilton.

HB: 100% – for an organization with Heart, and one that prides itself on Love, that was a perfect response. Thank you so so much Cheryl. 

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