Kelleher's Steps to a High-Performance Culture

When asked in 2002 what advice he would give to other companies attempting to instill the "Kelleher spirit" into their own organizations, the Southwest founder took the question very seriously. His response (sent in written form to this author) is nothing less than a culture-enhancing blueprint for other managers and organizations to emulate. It is reproduced here with virtually no editing (in other words, this is Kelleher, "uncut"):

Bureaucracy is antithetical to accomplishment. Success in most businesses depends upon the quick achievement of external results, rather than the purity and institutionalization of internal processes. For those businesses wishing to become more entrepreneurial and less bureaucratic in nature, I would recommend at least the following steps:

1. FOCUS UPON THE WORLD OF COMPETITORS, CUSTOMERS, AND SOCIETAL CHANGES, rather than upon an inside general office world, sometimes composed primarily of slavish devotion to forms, protocols and procedures.

2. DON'T BE AN ONION, BE AN ORANGE Reduce layers from "bottom" (there is none—just "us") to "top" (there is none—just "us").

3. REDUCE, TO THE MAXIMUM EXTENT POSSIBLE, THE NUMBER OF PERMANENT CORPORATE COMMITTEES. Use ad hoc groups to solve particular problems; include people on them who actually perform the functions involved (Customer Service Agents, Mechanics, etc.), and then dissolve those groups when the problem is solved.

4. THERE IS NO "PERFECT KNOWLEDGE," THERE IS ONLY GOOD JUDGMENT. Don't waste an inordinate amount of time on analyzing, studying, discussing, and planning (i.e., avoiding the risk of making a decision). Set deadlines on decision making—"at this meeting, within two weeks, etc."

5. REQUIRE YOUR OFFICERS AND OTHER "MANAGERIAL" PERSONNEL TO SPEND TIME ACTUALLY WORKING WITH (NOT WATCHING) EMPLOYEES AND EXTERNAL CUSTOMERS in the field and to report on what they did, what they learned, and what they intend to do with their acquired knowledge.

6. RECOGNIZE THAT ALL PAPERS PRODUCED, INCLUDING THE BUDGET, ARE SIMPLY WHITE PAGES WITH LITTLE BLACK MARKS ON THEM; they are impotent unless they lead to meaningful action or decisive (not inadvertent) inaction, and they are not immutable.

7. ESCHEW INFLEXIBLE RULES AND PONDEROUS MANUALS DESIGNED TO REGULATE THE MINUTIAE OF CORPORATE LIFE AND CUSTOMER INTERACTION, and instead, rely upon a well-understood and accepted set of corporate values. ...

8. BE A TRUE "INTELLECTUAL":Value ideas on their merits, rather than on the status, relationship, or credentials of those who submit them, and invite everyone to submit those ideas directly to the top (there is none—just "us").

9. GIVE "MANAGEMENT" PERSONNEL PROBLEMS TO SOLVE IN AREAS OTHER THAN THOSE OF DIRECT RESPONSIBILITY and give Employees the opportunity to learn others' jobs; learning, empathy, and unity are most often the results.

10. FOCUS UPON THE ESSENCE, NOT THE PERIPHERAL—e.g., this is the issue that confronts us; this is how we are going to resolve it;and now tell me how we are going to overcome (not succumb to) any impediments that might frustrate our proposed resolution.

11. HAVE A GENERAL STRATEGIC PLAN, NOT A LONG-RANGE PLAN OR GUIDELINE, as to what you are and what you aspire to be in the world that confronts you;use that strategic plan as a benchmark, not a bible, with respect to your decisions and actions; and then move nimbly and quickly within the ambit of that plan.

12. IN ORDER TO HAVE A DEFINABLE AND UNDERSTANDABLE "NICHE," you must be prepared to eschew a revenue-generating opportunity and give up market segments.

13. BE HUMBLE; BE APPROACHABLE; BE ETHICAL; LEAD BY SERVING; DON'T BE PERSONALLY GREEDY; don't discriminate; be fair; be firm, but never mean; have fun; enjoy people; tolerate mistakes; take risks; and share sacrifices.

14. ALWAYS REMEMBER THE G.O. (THE SUPPLY CORPS) IS THERE TO SERVE PEOPLE AT THE FRONT LINES, NOT THE REVERSE.

Kelleher also added specific ideas for managing the "people part" of the business—and, more specifically, concrete suggestions for developing a culture and ensuring that bureaucracy doesn't work against that culture (which he deems to be the company's greatest asset).

Once you have established an appropriate G.O. culture, recognize that your company's Employees are your premier Customers: Hire, train, infuse, involve, and inspire them, and they will be tolerant, empathetic, welcoming, caring, good humored, and altruistic toward each other and your external Customers.

1. HIRE GOOD ATTITUDES IN PREFERENCE TO BAD ATTITUDES (EVEN OVER BAD ATTITUDES WITH SUPERIOR DEGREES, EXPERIENCE, AND EXPERTISE).

2. TRAIN PEOPLE IN TWO THINGS: LEADERSHIP AND CUSTOMER SERVICE.

3. HAVE A CUSTOMER (INTERNAL AND EXTERNAL) REP-RESENTATIVE AT YOUR HIGHEST OFFICER LEVEL WHO IS KEPT INFORMED OF ALL DELIBERATIONS AND PROPOSALS ON ALL SUBJECTS AFFECTING YOUR INTERNAL AND EXTERNAL CUSTOMERS (from benefits to methods of operation to work hour schedules to plans for company parties, etc.)

4. LET YOUR PEOPLE BE THEMSELVES AT WORK, manifest their true personalities, and not have to put on a "work mask" or worry about the niceties of hierarchical protocol.

5. CELEBRATE THE ACHIEVEMENTS OF YOUR PEOPLE, OFTEN AND SPONTANEOUSLY; celebrate the milestones in your people's personal lives, such as weddings, marriages, birthdays and births, holidays, and more; care for, and grieve with, your people when they are ill, lose loved ones, experience catastrophes, or have other unhappy events in their lives. In short, value your Employees as people, not just workers.

6. CLEARLY DELINEATE WHAT YOUR COMPANY IS DOING AND WHY; make every Employee a participant, not an on-looker; ennoble the purpose of the work that's being done (you're not simply processing passengers, you're giving Americans the Freedom to Fly and thereby making a valuable contribution to society).

7. ADDRESS EMPLOYEE CONCERNS INDIVIDUALLY, PROMPTLY, AND SPECIFICALLY; even a "mental problem" is still "a problem" for the person involved.

8. THROUGH ROLE MODELS, CELEBRATIONS, AND COMMUNICATIONS, HONOR EXCELLENCE IN SPIRIT AS WELL AS PERFORMANCE; generate pride in accomplishment and selflessness;and remember that the intangibles, which can't be easily emulated, are more important than the tangibles, which can be purchased.

9. TITLE AND POSITION ARE UNIMPORTANT; LEADERSHIP QUALITIES ARE ALL-IMPORTANT; and everyone, no matter the title or position, is a leader by example. Correspondingly, it is an injustice to your people not to change poor leadership.

10. COMMUNICATION FROM THE HEART IS MORE IMPORTANT THAN COMMUNICATION FROM THE HEAD, AND INFORMAL COMMUNICATION IS JUST AS IMPORTANT AS FORMAL COMMUNICATION (e.g., "It's a pleasure to see you." "I was delighted to hear about your new baby." "Did you find that hat in a trash can?" "I hear your music recital went beautifully!"). Moreover, communicating goals, ideas, emotions, inspiration, and love is just as important as communicating facts and figures.

11. IF YOU ARE NOT ON FIRE ABOUT WHAT YOU'RE DOING, WHY YOU'RE DOING IT, AND THE PEOPLE WHO DO IT WITH YOU, THEN YOU CAN'T KINDLE THEIR MINDS, HEARTS, AND DEVOTION TO A CAUSE.

What Would Herb Kelleher Do?

Picking up from the scenario at the beginning of the chapter (the three candidates seeking the management job), which one did you decide to hire? Which one would Kelleher have selected? Let's begin with the candidates that the ex-Southwest chairman probably would have eliminated.

He would have eliminated our first candidate, Bill S., because Bill spent much of the interview taking credit for the company's success (e.g., he turned the company around, he came up with the last successful ad campaign). That would be anathema to Kelleher, who feels that humility, selflessness, and modesty are indispensable attributes for any employee. Although he mentioned a small-company culture at the end, it seemed as if it was an afterthought.

He would also have decided against the third candidate, Harry P., who seemed far more interested in numbers and profits than in customer service. As long as profits were up, he was not concerned that the restaurant he managed served 5 percent fewer customers. Kelleher says, "Don't worry about profit. Think about customer service. Profit is a by-product of customer service. It's not an end, in and of itself."

This, of course, leaves Sally J., the candidate that Herb Kelleher would most likely have selected. Sally was the most modest, speaking of her mistakes as well as her successes. Yet she maintained an infectious enthusiasm and a genuine passion for her work. She left her last job because management did not seem concerned enough about satisfying customers—a stance that Kelleher would respect. Although she was the least experienced of the three, Kelleher, who strongly urges managers to "hire for attitude," would have been impressed enough with Sally to hire her. He feels that resumes and experience are not as important as finding managers who fit the company's unique culture.