Chapter 7: Create a Performance-Driven Culture


Overview

The rule at Southwest is, if somebody has an idea, you read it quickly and you respond instantaneously. You may say no, but you give a lot of reasons why you're saying no, or you may say we're going to experiment with it in the field, see if it works.

—HERB KELLEHER, Founder and former Chairman, Southwest Airlines

We try to value each person individually at Southwest and be cognizant of them as human beings—not just people who work for our company. What we're really trying to say is, "we value you as people apart from the fact that you work here." That approach has been very helpful to Southwest.

—HERB KELLEHER

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What Would Herb Kelleher Do?

In the seat of the CEO: You are the CEO of a successful $25 million chain of steak houses that is well known throughout the United States and Europe. The restaurant chain has built its reputation on its excellent food and unconventional service. Waiters and the bus staff sing to customers, or perform poetry and movie "readings." Even the chefs come out of the kitchen and get into the act. This is no accident, of course: Your company's training program teaches all employees and managers to do just about anything to delight your customers.

You are now in the process of hiring a key senior manager for your flagship restaurant in Chicago. Several of your managers have interviewed more than 200 candidates, and they have narrowed the field to three, all of whom seem highly qualified. You have a file on each, and you bring each in for a final interview:

Bill S. He seems to have what it takes to be a good manager. He attended a top-notch hotel/restaurant school and has a strong r sum . Most of his 14 years in the business have been with one of your smaller competitors— a highly profitable outfit in the Midwest. When asked what he is most proud of, he speaks of how he helped turn that company around. The company was in trouble, with razorthin margins and few growth prospects. Thanks to his financial management, cost cutting, and other innovations—he developed new processes that allowed the company to seat more customers per restaurant—the company became a leader in its niche. He concludes his interview by telling you that the last ad campaign was his idea ("Great food at a great price, and the fastest service in town"), and by speaking of the importance of building a strong team and a family-like culture.

Sally J. She has been in the restaurant business for just under 8 years. Her last position was in an upscale seafood restaurant in New York. She appears passionate about her work, and her enthusiasm is contagious. When asked why she left her last job, she declared that she could no longer tolerate management's arrogance toward employees and customers. ("They acted as if the customer should be grateful for getting a seat in the restaurant," she explained.) She speaks modestly of her accomplishments, but she also admits that she has made some mistakes during her career (e.g., as manager of the New York restaurant, she sometimes alienated management by challenging its ideas). She also has limited understanding of financial management, which is important in the new position.

Harry P. He is the most seasoned of all of the candidates, with two decades of experience, most recently in New Orleans. Harry attended one of the best hotel/restaurant programs in the country, and he says that there is no job that he could not handle. Once he starts talking about his achievements, he goes on for some time, speaking of the "groundbreaking" things he accomplished in previous jobs. He is most proud of what he achieved in his last job, at a Bourbon Street bistro, where profits increased by more than 20 percent even though the restaurant was serving 5 percent fewer customers.

So those are the three candidates. Whom do you hire? Why? Is there a clear choice? What are the factors that will shape your decision?

What would Herb Kelleher do?

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Let's face it, there aren't many chain-smoking, tattooed CEOs leading Fortune 500 companies. But former Southwest Airlines CEO Herb Kelleher is not your typical chief executive. Southwest was founded over cocktails at the St. Anthony's Club, a San Antonio watering hole, in 1966. The idea for the airline was groundbreaking:a budget airline that would fly between Dallas, San Antonio, and Houston. Almost from day one, the company played the role of a scrappy kid fighting off the village bullies. The day after Southwest got its approval to fly, for example, angry competitors petitioned the court for a restraining order to stop it.

The battle went all the way to the Supreme Court, where Kelleher and Southwest got the last laugh. Competitors Braniff and Texas International were indicted for conspiring to put Southwest out of business.

Kelleher took on the role of CEO later, when the company had only 27 planes and was doing $270 million in business. By 2001, the company had 30,000 employees and was a $5.7 billion business. In the fall of 2002, Southwest's market capitalization was 10 times that of American and United combined. Even though the feisty lawyer-turned-airline-chairman handed over the CEO reins in 2001, much of the company today remains the organization he created.




What the Best CEOs Know[c] 7 Exceptional Leaders and Their Lessons for Transforming Any Business
What the Best CEOs Know[c] 7 Exceptional Leaders and Their Lessons for Transforming Any Business
ISBN: 007146252X
EAN: N/A
Year: 2002
Pages: 109

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