Learning from Southwest’s Horrible Holiday

Southwest Airlines incredible – and if you look at the airline industry’s history, “miraculous” – run of consistent profitability finally came to end in 2020 with the COVID-19 pandemic restrictions shutting down nearly all travel. All US airlines suffered for obvious reasons. But 2020 was also the last year for SWA to hold the top spot in the Wall Steet Journal’s “Best and Worst” of airline ratings. They dropped to third place in 2021 and remained there for 2022. (December’s problematic data will haunt SWA’s rankings next year.)

Scholars and pundits have written case study after case study over the years to discuss SWA’s various approaches: fly only one airline platform to keep maintenance costs down; offer only one class of seating, to reduce burdens on flight attendants in they way they treat customers; rely on humor to create a shared culture between flights crews and passengers; put employees first.

So what happened this December?

While the easy scapegoat here is Bob Jordan, who has held the CEO title for just over a year, that’s not the right answer. Just like with the sinking of the Titanic or the start of an avalanche, it’s a series of events and decisions over time that created SWA’s epic December, 2022 meltdown.

I don’t have any inside insight to Southwest, other than reading about the organization over decades and maintaining A-List status for many years. However, I do pay particular attention to the way leaders affect organizations and their cultures, so I have some hypotheses.

1. The Founding philosophy Matters. Herb Kelleher, the famous SWA CEO who expanded the airline and became a purpose-driven celebrity business leader, retired from the company in 2008. That means other leaders – most long time employees – have been in charge of setting the tone for the company. Sometimes, the original vision gets lost in translation as visionary business leaders give way to leaders with other strengths. In my own experience, I saw this play out at the Procter & Gamble company. They company moved in fits and starts when CEOs Durk Jager and Bob MCDonald couldn’t quite pull off what John Pepper, AG Lafley, and David Taylor could do. AG Lafley pulled off the turnaround of P&G – with the same people that Jager had – by communicating clearly and re-focusing the company on doing the basics well.

2. Culture Matters. In a company famous for publicly stating that it puts its employees first – because disgruntled employees don’t make customers happy – then the company has to walk the talk. From recent reporting, it seems apparent that employees weren’t put first: pilots, flight attendants, and maintenance crews have all been quoted as saying the internal information systems and tools did not support a company trying to operate in the third decade of the 21st century. In today’s world, up to date technology is often the key to unlocking employees’ full potential.

3. Timing Matters. My wife, also my senior prom date, often reminds me, “It’s good to be lucky.” Unfortunately, sometimes business leaders inherit unlucky times. Bob Jordan took over as the company had been cutting costs to make it through COVID and delaying much needed investments as a result. The December, 2022 weather patterns conspired to make flying in the US difficult for everyone – but even more so for SWA which sees its “point to point” logistics paradigm as a competitive advantage versus airlines that operate with a “hub and spoke” model. With normal weather patterns, this may be true, but this past holiday season the “points” made it harder to get aircraft, flight crews, and passengers together at the right place and time. Great leaders in the past have shown us part of the solution: use a crisis, or burning platform, to advantage by rallying the troops and driving change.

Net, any organization can improve. Focusing on doing the basics well, relying on foundational principles and purpose, and communicating clearly all contribute to a leader’s ability to effect change, drive growth, and sustain the culture.

Referenced Articles:

https://www.wsj.com/articles/best-worst-us-airlines-flights-cancellations-delays-baggage-11673982171 https://www.washingtonpost.com/travel/2019/10/16/southwests-plan-conquer-airline-industry-one-joke-time/ https://www.cnbc.com/2022/02/02/southwest-airlines-new-ceo-bob-jordan-takes-over-as-airline-tries-to-get-out-of-pandemic-slump.html https://www.npr.org/2022/12/30/1146377342/5-things-to-know-about-southwests-disastrous-meltdown

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