Monday, June 6, 2016

Company values, employee engagement and sucessful strategies


I just returned from a Summer Leadership Symposium on campus at the Heinz College and my takeaways from there align well with successful strategies at organizations like Southwest.

We spent two days talking about values, ethics and leadership. Companies that excel are the ones that clearly understand the connection between their values and their biggest asset – employees. For an internal organizational analysis to be accurate and to implement any strategy that will be executed well, employees must be a driving force. Southwest is particular about its hiring process , what type of employees are on boarded and this has always played well in Southwest’s strategy selection process. The company always knew that its quick-witted staff could make up for lack of food service on its airplanes and the employees came through. I once saw the Pilot come out of cockpit and close the overhead compartments on a flight as the attendants were busy sorting out an issue with loading of beverages, now I see the connection – it is in the values of the company, the crew operates as a team to get the flight off the ground and everyone has a broad list of duties to get the mission accomplished. "Our people are our single greatest strength and most enduring long-term competitive advantage." The statement from Gary Kelly, CEO Southwest Airlines says it all.

Southwest could foray into new markets and make scheduling decisions because its employees always supported strategies that aligned with core values of the company. The company leadership is focused on its mission statement to provide affordable air travel. In 2015, average passenger airfare at Southwest was $154.85 one way, and the average passenger trip length was approximately 994 miles[1] so that is about 15 cents a mile – cheaper than the cost of driving a medium sedan 17.18 cents[2]. Over the years, Southwest has not changed its hiring priorities and it continues to have some impressive employee turnover figures – “Voluntary turnover is only two percent, and many of Southwest’s original employees are still there”.[3]For the past 45 years, the company has kept words like FUN and LUV in values mission and its employees have taken it to heart. The company has benefitted from coherence premium, with executives and employees that understand the way creates value for its customer – “Make air travel cheaper than driving”. Three to six key capabilities to deliver value proposition – Limited in-flight service, frequent departures, short haul routes, high aircraft utilization, lean and highly productive ground and gate crew. Everything that Southwest does for product and services strategic leverage the capabilities system. Invariably Southwest’s success is its focus on internal (Employees) and external (Customers) forces in equal parts.



[2] http://exchange.aaa.com/wp-content/uploads/2015/04/Your-Driving-Costs-2015.pdf - Your Driving Costs Page 7, AAA Association Communication, 1000 AAA Drive, Heathrow, FL 32746-5063
[3] http://www.forbes.com/sites/kenmakovsky/2013/11/21/behind-the-southwest-airlines-culture/#ca3dc6e3fb94 – Published NOV 21, 2013 @ 04:46 PM, By - Ken Makovsky ,CONTRIBUTOR

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