How Southwest Airlines Keeps Flying High

William C. Taylor

Here is an article written by William C. Taylor about Southwest Airlines for BNET (November 22, 2010), The CBS Interactive Business Network. To check out an abundance of valuable resources and obtain a free subscription to one or more of the BNET newsletters, please click here.

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Yesterday’s New York Times [on November 21, 2010] featured the kind of article about Southwest Airlines that the business press has been running for decades. On the one hand, it was a celebration of success—the company, which marks its fortieth anniversary next year, remains the only consistently profitable player in the worst business in the history of business, an industry whose leading companies have lost a combined $55 billion over the last decade.

At the same time, the article was a worried rumination about whether this “rebel” and “maverick” can maintain its growth in the face of ever-tougher economic conditions and rivals determined to fight back. At some point, the Times suggested, high-flying Southwest simply must conform to the laws of economic gravity.

I’m not interested in speculating about Southwest’s financial future. What I will argue, though, is that this company—as folksy, quirky, and old-fashioned as it may seem on the surface—represents the most compelling symbol of cutting-edge business leadership in America today, a company from which all sorts of companies, in all sorts of industries, can learn.

The “same old” doesn’t work anymore

Here’s why Southwest matters. We are living in the age of disruption. You can’t do big things anymore if you’re content with doing things a little better than everyone else or a little differently from how you did them before. In any field, whether it’s Apple in computing or Netflix in home entertainment, the most successful organizations don’t just out-compete their rivals. They redefine the terms of competition by embracing one-of-a-kind ideas in a world filled with me-too thinking.

Let’s face it: Most big companies in most industries have a kind of tunnel vision. They chase the same opportunities that their rivals are chasing, they miss the same opportunities that a few upstarts manage to identify. It’s the organizations and leaders that see a different game that wind up winning big.

There’s no doubt that Southwest has been a game-changer in its field. From Day One, the purpose of the airline has been to “democratize the skies,” to give rank-and-file Americans the same “freedom to fly” as business travelers and the well-to-do. It developed an entirely different way to be in the airline business, based on the unique impact it aimed to have on that business. Its fleet is unique—just Boeing 737 aircraft. Its route system is unique—it doesn’t use the hub-and-spoke network the legacy carriers use. Its ticketing policies are unique—no first-class seats, no assigned seats whatsoever. Its marketing and advertising is unique—it has become a “passion brand” in an industry that spends much of its time at war with its own customers.

Strategy requires passion

In other words, Southwest Airlines is more than just a company, it’s a cause, both in terms of its personality in the marketplace and the mindset of its employees in the workplace. And that, I would suggest, is the essence of strategy in tough times. The only sustainable form of business leadership is thought leadership.

Or let me put it another way. With all the problems and challenges in business today, so many leaders I know focus on that age-old question, What keeps you up at night? What are the problems and worries that nag at you? But the more powerful question, the one around which the famously intense Southwest culture is built is, What gets you up in the morning? What keeps you and your colleagues more committed than ever, more creative than ever, more determined than ever, even as the environment around you gets tougher and more uncertain that ever?

If Southwest Airlines can keep growing, making money, and adding people in an industry where every other major player has flirted with or entered bankruptcy, surely you can do the same in your field. So set aside for a moment the products and services you sell. What are the ideas that you and your company stand for? What do you see that the competition doesn’t see?

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William C. Taylor is co-founder of Fast Company magazine and co-author with Polly G. Labarre of  Mavericks at Work. His new book, Practically Radical, will be published on January 4, 2011. You can follow him on twitter.com/practicallyrad.

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