Southwest Airlines operations and business overview

Southwest Airlines: The corporate culture of the LUV airline

Southwest Airlines is known for a unique corporate culture that is particularly distinctive, in contrast to its competitors. Southwest Airlines has "a raucous corporate culture that is the exception in the grim airline industry" (Bailey 2008). From the Airline's inception, its founder and chairman, Herbert D. Kelleher ensured that there was "a startling amount of office hugging and kissing in lieu of handshakes; elaborate practical jokes; and on-the-premises beer drinking at headquarters, as long as it is after 5 p.m." (Bailey 2008). The Airlines' quirky sense of humor is communicated through everything from its abbreviation on the stock exchange (LUV) to its behavior of flight attendance on board, which often involves cheering, singing and dancing. "The service, while no-frills, is generally cheerful. And on many days that is enough to distinguish it from other airlines, where the workers have a hard time masking bitterness over pay cuts, increased workloads and often contentious relations with management" (Bailey 2008).

This is deliberately orchestrated by Southwest, which takes pride in hiring personalities not simply focusing on the candidate's resume. "We at Southwest put a lot of effort into our selection process. We received over 100,000 applications every year and hired a very small percentage of those people, maybe 2,000 or 3,000. We used to say that we hired for attitude and trained for skill" (Holstein 2008). Character and personality cannot be trained, unlike skills. Training of all employees is extensive, and regardless of the position filled by the employee, the stress is upon understanding Southwest as a holistic corporate culture. Southwest tries to enable all employees to understand how they 'fit in' to the processes of the company, which is designed to eliminate the interdepartmental and interpersonal rivalry which has plagued many airlines. Every "new employee would come in for orientation. It would be all sorts of employees, everybody from pilots and ramp agents to reservation agents to mechanics to executives" (Holstein 2008). There are no executive dining halls or separate areas where employees are segregated by rank and function. This creates a 'we're all in this together' collective mentality.

Southwest also views it as incumbent upon itself to create a positive corporate culture that supports its people. "You can hire great people and put them into a lousy environment and make them bad employees. The next thing is to create the culture where people feel like they are using their brains, they're using their creativity, they're allowed to be themselves and have a sense of humor, and they understand what the mission of the company is" (Holstein 2008). Southwest sees no contradiction between encouraging employees to be creative while still upholding the organizational culture. We "Live the Southwest Way,' and our Employees exemplify this with their Warrior Spirits, Servant's Hearts, and Fun-LUVing Attitudes, but each Employee is also encouraged to 'color outside of the lines' when appropriate in doing what is right by our Customers and our Company" writes Amy Marhoffer, Culture Communications and Planning Specialist on the Southwest blog (Marhoffer 2011). Top managers periodically go out into the field to visit places where workers are 'really working,' to understand how the business operates and to learn from subordinates (Holstein 2008).

This democratic model is integrated into the Southwest mission and vision as a whole. Southwest is a low-cost airline that enables ordinary Americans to fly with much greater frequency than they would otherwise if Southwest did not exist. Southwest views itself as giving Americans the 'freedom to fly' and its employees on every level are facilitators of that mission (Holstein 2008). This integrated philosophy also ensures that every employee is viewed as having valuable input into how the company serves its functions. In contrast, when most other airlines talk about leadership, "what they're usually thinking about is executives who might be a vice-president or CEO someday" (Holstein 2008). One of Southwest's former CEOs said he took pride in being the lowest-paid CEO in the industry, and although Southwest is a 'budget' regional carrier, it is not a low-wage airline. It is heavily unionized and did not cut lower-level worker's pay after 9/11. "Southwest, after pay cuts at other airlines, has the industry's highest wages. But because of efficient work habits, measured in how much it spends to fly a passenger a given distance, its costs are the lowest among big airlines" (Bailey 2008). All employees have access to stock options (Holstein 2008).