Southwest Airlines - Business Success Term Paper

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The company continually stressed the human nature of travel, and strove to make airplane travel affordable and enjoyable. Many people who used Southwest Airlines had never been able to fly before. However, the 'customer did not come first' at Southwest -- rather the customer came second, even though they "still got great service" (Friedberg & Friedberg 268). The company stood behind its employees, and allowed flight crews, for example, to use their expertise and knowledge to make autonomous decisions, rather than force the crews to worry about upsetting sensitive customers. The company believed that low fares and hospitality were what most customers care about, and did not focus on catering to customers with minor complaints. "Love doesn't guarantee approval... Although many people equate love and approval, they are not the same. Real love comes without conditions; it doesn't depend on anything. Approval must be earned by our performance" (Freiberg & Freiberg 228).

Southwest fulfilled its promises to its employees with real, hard dollars as well. As well as free airfare, Southwest offered an extensive profit sharing arrangement for its employees, a competitive salary and insurance benefits. Today, its employees rank themselves as highly satisfied with the company: "Southwest receives a minimum of 100,000 job applicants per year and consistently has the lowest turnover rate of any airline. People leaving is virtually nonexistent," ("Best practices case Study: Best perks, Southwest Airlines," the Vault, 2008). Only at Southwest could a legal secretary like current president Colleen Barrett move from the position of legal secretary to the corporate suite while, working with mentor and company co-founder Herb Kelleher.

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Barrett states proudly that she spends "85% of her time as president dealing with worker issues," which is based upon the idea "that a happy and motivated workforce will essentially extend that goodwill to Southwest's customers" ("Southwest Airlines' Colleen Barrett flies high on fuel hedging and 'servant leadership,'" 2008).

Follow up

Even after the attacks of 9/11 caused a crisis of confidence in the airline industry, Southwest continued to have the highest customer ratings of any airline and was the only airline not to engage in 'mass firings.' Today, Southwest is the only airline in America who had had a profit every year since 1973 and continues to service twice as many customers per employee as any other airline (Kjerrulf 2003)

Case Report

Southwest's success is judged particularly impressive because it occurred in one of the most difficult economic sectors for companies to excel, that of the airline industry. But its lessons are applicable to all companies. Treat the intelligence of employees as an asset, do not pander to them. Assemble a great team with a rigorous screening process, but once a person is hired, give the employee fair compensation and consideration if there is a problem. Don't hide behind empty rhetoric -- there is nothing to be ashamed of if you give customers a high-quality, no-frills product -- provided it is served with a smile, and some 'nuts.'

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