Tuesday, December 13, 2005

Insights from Southwest

Southwest Airlines is an exceptional company. They are the only U.S. airline to have made money every year since 1973 (since 1978, 120 other airlines have gone bankrupt). Southwest has consistent market share of at least 60% in almost every nonstop city-pair market it serves. Southwest has the best customer service record in the airline industry and is the only carrier in the U.S. to win the industry's "Triple Crown" - baggage handling, on-time performance and customer complaints. Southwest has a turnover ratio of 6.4 percent, one of the lowest in the industry, and was listed in the top 10 best companies to work for in America.

Several interesting quotes from Nuts! Southwest Airlines Crazy Recipe for Business and Personal Success:
  • When people work really hard for something they believe in, a special bond inevitably develops between them.
  • "Most companies fail in their growth because they don't have a vision." Howard Putnam, former Southest CEO.
  • "Market share has nothing to do with profitability. Market share says we just want to be big; we don't care if we make money doing it. In order to get an additional 5 percent of the market, some companies increased their costs by 25 percent. That's really incongruous if profitability is your purpose." Herb Kelleher, former Southwest CEO
  • "We'll train you on whatever it is you have to do, but the one thing Southwest cannot change in people is inherent attitudes." Kelleher
  • Southwest was, in the words of Gary Barron, chief operations officer, "nimble, quick, and opportunistic." How did Southwest get that way? Whenever possible, Southwest flies in the face of bureaucracy: it stays lean, thinks small, keeps it simple."

No comments: