Part 1: Read Case Study and Answer the Question: Southwest Airlines began as a fledgling operation with

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Part 1: Read Case Study and Answer the Question: Southwest Airlines began as a fledgling operation with four airplanes flying 18 daily roundtrip flights among three cities in Texas. The early history of the airline led to the development of a unique leadership approach. Before Southwest ever had its first flight, a group of competitors filed a lawsuit to block the upstart airline from initiating its proposed service. The legal battle dragged on for three years before Southwest finally got off the ground in 1971. The early days were lean for the airline; flights often carried only a handful of passengers, and the cost of the legal battles required to establish the company drained its resources. The CEO of Southwest Airlines from its founding until his retirement in 2001 was Herb Kelleher. An attorney by training, Kelleher turned the struggling airline into a personal crusade. To survive among its hostile and much larger competitors, Kelleher worked to develop the leadership practices that would allow Southwest to prosper. Southwest's operating strategy focuses on providing low-cost, no-frills service with frequent direct flights between cities. The method for achieving success in using this strategy has been to employ a revolutionary leadership approach. While many companies argue that the customer is always right, Kelleher believes employees come first. "Customers are not always right, and I think that is one of the biggest betrayals of your people you can possibly commit. The customer is frequently wrong. We don't carry those sorts of customers. We write them and say, 'Fly somebody else. Don't abuse our people.'"27 As Southwest's corporate philosophy explains: Employees are number one. The way you treat your employees is the way they will treat your customers. The results for customers have been exceptional. Southwest has consistently been rated by the U.S. Department of Transportation Air Travel Consumer Report as having the best on-time performance, best baggage handling, and fewest complaints of all major air carriers. In a highly competitive industry in which all carriers strive to get top ratings in any of the three reporting categories, Southwest is the only airline to ever be rated best in all three categories?a feat called the triple crown. Indeed, Southwest once held the triple-crown for five consecutive years?an astonishing record considering no other airline has held the triple crown for even one month! Southwest goes to extraordinary lengths to connect with employees. The company has a culture services department that sponsors Spirit Parties, chili cook-offs, awards banquets, and other special events. A team of five people acknowledges significant employee "life events" (births, deaths, serious illnesses) through phone calls, cards, and gifts. A customer communications team makes sure that commendations are forwarded to employees with acknowledgment to the customer making the compliment. The "Heroes of the Heart" program recognizes employees or departments for extraordinary service by painting the names of winners on planes for a year. CEO Gary Kelly views communication as his "primary job," spending an "incredible" percentage of his time communicating with Southwest employees. Kelly records news updates for employees every Monday morning and meets weekly with staffers. Every February he meets with company workers in six locations around the country, delivering a "State of the Company" address to thousands of employees. In August he holds a series of conversations with employees, meeting with flight attendants, pilots, and ground crews at airport locations.28Other key corporate philosophies emphasize that work should be fun (employees are encouraged to take their jobs and the competition seriously?but not themselves); that employees should demonstrate a warrior spirit that is passionate and committed to hard work; that others should come first (a servant's heart); and that employees should do whatever it takes to meet the needs of customers. As former company president Colleen Barrett explains, "No employee will ever be punished for using good judgment and good old common sense when trying to accommodate a customer?no matter what our rules are."29 Perhaps most noteworthy is Southwest's commitment to conducting its business in a loving manner which respects the dignity of every employee no matter his or her position in the organization. As consultants Kevin and Jackie Freiberg explain, "Southwest understands that when people feel loved they develop a greater capacity to love others. Employees bear out this belief every day in the kindness, patience, and forgiveness they extend to each other and their customers."30 This value is so deeply ingrained in the company's culture that Southwest's stock symbol is LUV. The results of the Southwest leadership approach have been nothing short of phenomenal. The airline has been rated as one of the nation's 10 best companies to work for.31 Each year Southwest receives over 200,000 applications for some 4,000 available jobs. The demand for employment at the airline is so great that it is easier to get accepted at Harvard than it is to become a mechanic at Southwest!32 In an industry plagued by problems associated with excessive costs, frequent labor disputes, and the often-changing whims of travelers, Southwest has been a bastion of profitability. Southwest is the only U.S. airline to have made money every year since 1973. It is the nation's largest domestic airline, carrying 100 million passengers a year. Certainly, Southwest's well-defined operating strategy has contributed to its long-term success. The airline's major competitive advantage, however, appears to be its people and its leadership practices. Kelleher's retirement has seemingly had little impact on Southwest's ongoing culture. Under the direction of new leaders, the company appears as strong as ever.