How a slight disadvantage plays more attentively

262
10
He who has a slight disadvantage plays more attentively, inventively and more boldly than his antagonist who either takes
it easy or aspires after too much. Thus a slight disadvantage is
very frequently seen to convert into a good, solid advantage.
—Emanuel Lasker
Everyone has a Customer, so if you are inclined to be a oneman show and not serve others, then you really don’t want to
be at Southwest. It’s not a matter of right or wrong. It’s just that
we are so into team and so into positive attitudes and pride in
how we deliver our services everyday to whomever we are interacting with, that if you don’t really sign up to that theory,
then you aren’t going to be very happy here.
—Colleen Barrett, President and Chief Operating Officer,
Southwest Airlines
Southwest Airlines is one of the most admired companies in the past twenty
years. Few B2C (business to consumer) companies have been as consistently
successful as this upstart air carrier, which in 2001 achieved its twenty-ninth
consecutive year of profitability. Southwest is a darling of the business press
because of its flamboyant cofounder, Herb Kelleher, who turned over the
helm as president and CEO in 2001; its homey culture (Southwest’s stock
symbol is LUV); and its business model, which is a radical departure from
WHY SOUTHWEST AIRLINES
SOARS: B2C BEHAVIORAL
DIFFERENTIATION
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Why Southwest Airlines Soars: B2C Behavioral Differentiation 263
other major airlines. A large part of Southwest’s success can be attributed to
the elements of its business model that have enabled it to put more planes in
the air, at lower cost, with faster turnarounds, and less downtime than its
larger competitors. As Jack Trout observes, “By using one kind of airplane
they saved on training and maintenance costs. By offering no advanced seats
they avoided expensive reservation systems. By offering no food they eliminated expense and time. By avoiding expensive hub airports and using less
expensive smaller airports they avoided high gate charges.”1 Southwest’s
careful management of costs enabled it to be the low-fare, short-haul airline.
However, it would be shortsighted to assume that the only reason for Southwest’s success is its business model. As important, if not more so, are the
unique culture Herb Kelleher created and the company’s commitment to
“positively outrageous service,” which enabled it to create and sustain powerful behavioral differentiators, both internally and with the more than 64
million people who fly Southwest Airlines annually.
To understand how this unique company came to exemplify BD, we have
to go back to 1966 at St. Anthony’s Club in San Antonio. Legend has it that
attorney Herb Kelleher met a client, Rollin King, over drinks at St. Anthony’s
to discuss King’s idea for an intrastate airline serving San Antonio, Dallas,
and Houston. They sketched the triangular route on a cocktail napkin, talked
about how they could make money by doing it differently than the majors,
and set a course that would later redefine the airline business. The core of
their idea was simple: Get people to their destination when they want to go,
get them there on time, and make it enjoyable. If you provide this kind of service, they reasoned, Customers* will choose your airline.
The plan was simple and as feasible as most cocktail napkin business ideas
are, but getting into the air was not. Legal challenges grounded the fledgling
carrier for more than three years. Texas International, Braniff, and Continental tried to eliminate the new competitor, and Herb Kelleher was forced to argue Southwest’s case all the way to the U.S. Supreme Court, but he prevailed.
On June 18, 1971, four years after its incorporation, Southwest initiated
flights from Dallas’ Love Field, and by 1973 the company was in the black
and would remain there. The most important by-product of this prolonged
battle to get into the air was that it galvanized the company as an underdog,
and the Southwest “warrior spirit” was born. Colleen Barrett, now president
*Southwest Airlines’ policy is to capitalize the words Customer and Employee to emphasize their importance to the company. To reflect the spirit of Southwest Airlines,
in this chapter we will honor this convention except in direct quotes from people who
are not part of Southwest Airlines. Throughout the rest of this book, we follow the
normal rules of capitalization.
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264 Winning Behavior
and COO of Southwest, believes that those early trials by fire were crucial in
forming Southwest’s culture: “I think the basics of our culture were created
because of the warrior spirit that was dictated by those ‘bad guys’ out there
who believed they could keep us out of the air. . . . I firmly believe in my
whole heart and soul that if they had left us alone and basically ignored us we
probably would have been out of business in two years.”2
Southwest’s first CEO was Lamar Muse. Recently retired from Universal
Airlines at fifty, he had a wealth of airline experience and a tough, entrepreneurial attitude.3 Muse raised money, began buying 737s (the only
plane Southwest would fly), and hiring the right people. His senior staff initiated some of the fundamental and revolutionary operating procedures that
set Southwest Airlines apart, even today. He also launched the “Now There’s
Somebody Up There Who Loves You” ad campaign, featuring a bit of 70s
chic that today would not even qualify as nostalgia: flight attendants wearing
hot pants and go-go boots. Herb Kelleher became president and CEO of
Southwest in 1982 and later introduced a number of innovative programs, including a reduced fares program for leisure travelers (today’s version is called
Friends Fly Free) and a frequent flier program, Rapid Rewards, based on the
number of flights taken instead of mileage. To attract passengers and improve
tourism in Texas, Southwest joined forces with Sea World of Texas and made
Southwest Airlines the official airline of Sea World. During this program, in
yet another wacky move, Southwest created Shamu One, a Boeing 737
painted like Shamu the killer whale. More special theme planes were to follow. Herb also gained media attention by starring in Southwest’s television
commercials and by arm wrestling Kurt Herwald, chairman of Stevens Aviation, for the rights to the tag line, “Just Plane Smart” (Kelleher lost but the
gimmick generated a lot of publicity).
Greatness in marketing and customer service is a function of attitude, not resources.
—Art Weinstein and William C. Johnson, Designing and Delivering
Superior Customer Value
In 1990, Southwest hit the billion-dollar revenue mark and became, by
anyone’s definition, a major airline. During the nineties, the company continued to expand rapidly, adding destinations on the east coast and in California and Florida. Everywhere that Southwest went, it caused the dominant
carriers to scramble to compete. In 1993, the U.S. Department of TransportaCopyright © 2003. AMACOM. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law.
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tion coined the expression “The Southwest Effect,” which reflected the fact
that average fares decreased and the number of passengers dramatically increased whenever Southwest Airlines began serving a new city. In its journey, Southwest is credited with a number of firsts:
The first major airline to fly a single type of airplane (Boeing 737s).
The first airline to use a no-seat-assignment boarding process.
The first major airline to offer ticketless travel systemwide.
The first airline to offer a profit-sharing program to its Employees (instituted in 1973).
The first major airline to develop a Web site and offer online booking. In
2001, 40 percent ($2.1 billion) of its passenger revenue was generated
through online bookings at southwest.com. Southwest’s cost per booking
via the Internet is about $1, compared to a cost per booking through travel
agents of $6 to $8.
Another first is that although seven of the eight largest airlines in the U.S.
continue to hemorrhage red ink, Southwest remains profitable year after year.
In the first quarter of 2002, for instance, the majors (except for Southwest)
lost nearly $2.5 billion; Southwest’s profits dipped considerably in the first
quarter of 2002 (part of the continuing fallout from the 9/11 tragedy), but it
still managed to earn over $21 million.4
How does Southwest do it? The answer that comes to mind first is its unconventional business model, and indeed this is one reason why Southwest
has soared. Although Southwest has grown to be one of the largest airlines
in the United States, it has not significantly shifted from its initial focus:
short-haul, point-to-point flights; low fares; high-frequency flights; a single
type of airplane, which reduces maintenance and training costs; and conservative, fiscally responsible expansion. This operational game plan rests on
speed, efficiency, and Customer service. Airlines such as the now-defunct
People’s Express had similar strategies and grew rapidly. However, People’s
then veered from its course with the acquisition of jumbo jets and competing with the major airlines on longer routes, with disastrous results.5 Finding your niche, believing in your business strategy, and sticking to what you
do well are highly differentiating strategies that have worked for Southwest.
However, if we assumed that this is the only reason Southwest has soared,
we would be missing the fundamental ingredient that has differentiated
Southwest from its rivals in the airline industry and most companies in other
industries: its behavior toward its Employees and its Customers.
Why Southwest Airlines Soars: B2C Behavioral Differentiation 265
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The Behavioral Differences
at Southwest Airlines
To say that much has been written about Southwest Airlines would be an
understatement. Southwest has been a maverick in the airline industry and a
company that has marched to a different drummer throughout its thirty-year
history. It is one of the most admired and successful companies in America,
so attention has readily come its way. In 1996, Kevin and Jackie Freiberg
wrote Nuts! Southwest Airlines’ Crazy Recipe for Business and Personal
Success to tell Southwest’s unconventional success story. The book was followed by hundreds of other written pieces—articles, book chapters and press
releases—that elaborate upon Southwest Airlines’ business model and behavior, yet no one has successfully copied them. In Hidden Value: How
Great Companies Achieve Extraordinary Results with Ordinary People, Jeffrey Pfeffer and Charles A. O’Reilly raise two important questions about the
mystery of Southwest Airlines: Why hasn’t the competition been able to
copy the Southwest model? and How has Southwest been able continue to
grow and to be successful over such a long time? 6 Part of the answer to these
questions is that unlike other product or service differentiators, positive BDs
are much more difficult to imitate. In the B2B world, they are also much
more difficult to observe, so what’s stunning is that in this B2C world where
the behaviors are as blatant as they are outrageous, the competition still can’t
imitate them regardless of how many memos management issues or training
classes they put their people through. Southwest behaviorally differentiates
itself in numerous ways. That has added greatly to the remarkable success of
this company, and it provides a lens through which to better understand its
sustained and largely unimitated model of success.
The Customer Service Business
Colleen Barrett, shown in Figure 10-1 with Herb Kelleher, likes to say,
“We’re in the Customer service business; we just happen to provide airline
transportation.”7 Customer service takes top priority at Southwest Airlines,
and they are dead serious about it. They call it “Positively Outrageous Service,” which means that everyone regardless of rank or job position does
whatever it takes to get the job done and please the Customer. Herb Kelleher,
now Chairman of the Board, has been noted for helping out the baggage handlers on the Wednesday before Thanksgiving Day, one of the busiest flying
times of the year. To emphasize the respect accorded to both Customers and
Employees, Southwest always capitalizes the “C” in Customer and the “E” in
Employee, a policy that underscores its alignment between behavior and op266 Winning Behavior
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erating principles.8 Barrett underscores the importance of the service difference: “Our behavior is certainly a whole lot different. It’s certainly different
than the airline industry in general, but I also think it’s pretty easy to differentiate our Southwest Employees from almost any Customer service business, whether it’s the airline industry or not.”9
Operations as Internal Customer Service
All relationships at Southwest are considered part of the Customer service
package. Passengers are not the only Customers. Everyone at Southwest has
a Customer. The mechanics are told their number one Customer is the pilot;
provisioning agents are told that their number one Customers are the flight attendants, and so on. All of these relationships are considered equally important, so the same servant leader mentality, Customer service orientation, and
behaviors are expected of everyone. Colleen Barrett explains: “We are so culturally operational. The way we run our business is so involved in internal
Customer service. As a nonoperational officer, I probably have the best understanding of our operations of any officer at Southwest. In order for me to
provide internal Customer service, I have to work within the operational environment. I suppose that is unique for us versus some other airlines.”10
Why Southwest Airlines Soars: B2C Behavioral Differentiation 267
Figure 10-1. Herb Kelleher and Colleen Barrett. At Southwest Airlines,
the spirit of fun starts at the top.
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The Southwest Spirit
Southwest has forged a unique culture inseparable from its brilliant, zany,
celebrity CEO (now Chairman) Herb Kelleher, and a spirit synonymous with
its underdog beginnings. From early on, Kelleher stood behind the idea that
Employees came first. If Employees were happy and satisfied, then they
would be able to provide the kind of experience to passengers that would keep
them coming back for more. In order to keep costs low, Southwest had to maximize the productivity of both planes and people. In other words, Southwest
Employees had to be willing to work harder. To handle that kind of stress,
Kelleher knew they needed a sense of humor and a tight-knit family culture,
which would create the warrior spirit of “doing whatever it takes.” According
to Joyce Rogge, Senior Vice President of Marketing, Herb instilled in the culture all the characteristics that went into making him a great person: being
egalitarian, truly believing that people make the difference, and having a great
love of people—talking to them and listening to their ideas.11 It’s the intangibles of vision, attitude, and core values that drive BD at Southwest Airlines,
qualities that are hard to copy, as Herb Kelleher noted: “It’s the intangibles that
are the hardest thing for a competitor to imitate. You can get airplanes, you can
get ticket counter space, you can get tugs, you can get baggage conveyors. But
the spirit of Southwest is the most difficult thing to emulate.”12
In practice it is difficult in a service operation to distinguish
clearly between the service, the process of providing service,
and the system for delivering it. Since the service itself almost
always consists of an act involving the customer, quality will be
perceived by the customer in terms of this interaction. Similarly,
the system producing the service will be judged from the behavior and style of the contact personnel and the physical tools
and facilities on display. The very intangibility of a service automatically forces the customer to look for additional clues for
evaluation.
—Richard Normann, Service Management: Strategy and Leadership in
Service Business, 2d ed.
We have argued throughout this book that behavioral differentiation is hard
to copy because it is not simply a matter of observing how your competitors
are behaving toward Customers and then sending out a memo asking your Employees to behave the same way. People are not robots, and their behavior is
not like a broken part you can replace. Behavior is the outward manifestation
268 Winning Behavior
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of deeply rooted attitudes, values, and beliefs. Companies like Southwest Airlines know that they cannot fundamentally change what people bring to the organization, so they hire for those attitudes, values, and beliefs. Then they teach
their new hires how to do the job. Furthermore, to sustain differentiating behaviors they create a culture that supports and rewards those behaviors and encourages people who are already disposed to treat Customers well to be themselves. As we were exploring BD at Southwest, we asked Joyce Rogge why
Southwest has been able to sustain its BD while other companies that tried to
copy Southwest were unable to do so. Here’s what she said:
I believe the sustaining part is the difficult part because we’ve had competitors try to copy us before. They’ve instructed their flight attendants
to be friendlier or tell jokes, or they have copied some of our scripts and
that will go along for a while, but the key is having Employees who will
sustain that behavior. The difference is that for our Employees that kind
of behavior is the norm. It’s abnormal for us to trip up and give bad Customer service. Our norm is great Customer service (friendly and with a
smile), extra effort, going the extra mile, that sort of thing. So sustaining that is just part of our life, whereas for somebody else it’s easy to
copy for a short period, but it’s hard to keep it going.13
The Southwest Spirit is deeply embedded in the culture and is a source of
pride for Southwest Employees. It creates a sense of uniqueness that comes
from being part of a special organization, and it motivates people to try harder
and do more for Customers than they would otherwise do. Airline analysts acknowledge that the effort Southwest Employees put forth makes a real difference. They also believe that short-haul clones designed to steal some of
Southwest’s business would have to reproduce Kelleher’s operation with
some precision and therefore face an uphill battle. According to veteran airline analysts, “No other carrier has demonstrated the operating skills and cultural cohesiveness needed to approach Southwest’s standards of service and
reliability on a broad scale.”14
Hire for Attitude, Train for Skill
Recruiting and hiring the right people to fit the Southwest culture is a very
high priority, as it is at Ritz-Carlton, Men’s Wearhouse, and other exemplars
of BD. According to Barrett, they are religious about it. Some companies may
claim to hire for attitude, but Southwest backs up its claim with rigorous procedures to hire for positive attitudes and a straightforward dedication to
Why Southwest Airlines Soars: B2C Behavioral Differentiation 269
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weeding out anything different. Hiring is critical, Barrett says, because you
cannot institutionalize behavior. Instead, you must identify those people who
already practice the behaviors you are looking for. Then you can allow Employees to be themselves and make decisions about Customer service based
on common sense and their natural inclinations.
Hiring at Southwest is a two-step process. The first step is a group interview, conducted by Employees, where candidates’ interpersonal skills can be
observed. Next are one-on-one interviews, where the questions are designed
to uncover candidates’ attitudes and orientation toward serving others. These
hiring criteria apply regardless of the job function because all Employees
play a Customer service role, internally or externally. Every job at Southwest
is a Customer service position.
All new Employees at Southwest go to a new hire class at the University
for People. There, they receive a Freedom Planner that describes benefit
plans, people programs, services, and opportunities available to Employees
of Southwest. The purpose of the Planner is to help new Employees understand how these programs can help them achieve their personal goals. Freedom is one of Southwest’s themes. They talk about giving Customers the
“freedom to fly” and their latest ad campaign is, “You’re now free to move
about the country.” The Freedom Planner is intended to help Employees develop their own sense of personal freedom in eight ways:
Freedom to Create Financial Security
Freedom to Pursue Good Health
Freedom to Work Hard and Have Fun
Freedom to Make a Positive Difference
Freedom to Learn and Grow
Freedom to Create and Innovate
Freedom to Travel
Freedom to Stay Connected
Does this kind of Employee program work? Consider this. In 2001, the
People Department at Southwest received nearly 200,000 resumes. They conducted more than 27,000 interviews, and hired 6,406 Employees. Since 1997,
Southwest has been among the top five in Fortune’s list of the Best Companies to Work For in America four times. In 2001, Southwest Employees received more than 30,000 Customer commendations and over 13,000 internal
commendations for their “Positively Outrageous Service.” This company is a
superstar in Customer service, and it accomplishes it through hiring, development, and retention of outstanding people.
270 Winning Behavior
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Donna Conover, Executive Vice President of Customers, says that Employees can be terminated for having bad attitudes, even if they are good at
their job.15 However, hiring for attitude makes life so much easier for everyone. She likens it to coaching teams. If a player is coachable—listens, has a
good attitude, wants to work hard to achieve the team’s goals—then you can
teach them anything and they will work hard to learn. Under these conditions,
it’s easy to stick with Employees through the learning curve and support them
through the mistakes that are an inevitable part of risk-taking and growth.
Leadership Bench Strength
In 2001 Southwest Airlines celebrated its thirtieth anniversary. To coincide with that event, Herb Kelleher stepped down from his role as President
and CEO but stayed on as Chairman of the Board. Jim Parker was named
CEO and Colleen Barrett became President and COO. Both are veteran leaders at Southwest, and their succession illustrates a longstanding policy at
Southwest—to grow its leadership talent from within. Herb Kelleher has
been an outstanding leader at Southwest, and whenever a strong, charismatic
leader steps down people are apt to question whether the company and its culture can be sustained. In retrospect, there might have been more risk had
Southwest sought a replacement CEO from outside the company who did not
know the company’s culture and was not as dedicated to preserving it.
Southwest emphasizes homegrown leadership and strives to move talented
Employees up through the ranks—more so than most other companies. Leaders like Colleen Barrett, Jim Parker, and Donna Conover are just a few of the
current leaders in the company who have grown with Southwest. For these
longstanding representatives of Southwest’s culture, Herb’s change of role is
a moot point. For them, it is business as usual with some shift in responsibilities. Colleen Barrett remembers telling an analyst who questioned whether
the magic at Southwest could continue after Herb left, “You almost insult me!
Do you think I’ve learned nothing from Herb in thirty years?”16 Joyce Rogge
echoes others in saying that Kelleher’s major legacy at Southwest is the culture he created and people he attracted and nurtured. “Herb alone could not
have brought the culture to bear,” she says, “if he had not had people on his
team, key top leaders who have been at Southwest for a long time, who also
believed in it.”17 It is illuminating that Fortune, in its 2002 ranking of America’s Most Admired Companies, cites Southwest’s management bench
strength as an important reason for its continued selection on this list.18
Why Southwest Airlines Soars: B2C Behavioral Differentiation 271
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Places in the Heart
Southwest Airlines’ courage to talk openly about love as a central emotional theme for the company is also unprecedented, and although that may
sound hokey, it has created a degree of caring for Employees and Customers
that has made both groups more loyal to the company. From the NYSE ticker
symbol (LUV) to the hearts that abound in company visuals and communications, Southwest is not shy about the role of love in its success. The company began at Dallas’ Love Field and for years used the tag line, “The airline
that love built.” One of the company’s recognition programs for Employees
who demonstrate the Southwest Spirit is called “Heroes of the Heart,” and the
monthly Employee newsletter is entitled LUVLines. This is not mere image
making on Southwest’s part; they live these values and believe deeply in
them. It shows in the cards Colleen Barrett sends to Employees on their birthdays and other special occasions. It shows in the Employee Catastrophic
Fund, in which Employees can donate a portion of their paychecks if they
wish, and the money is distributed to Employees who have faced a devastating tragedy like a house fire or tornado. It even shows in Southwest’s policy
not to respond to Customer communications via email, which they consider
too impersonal. Instead, when Customers send an inquiry or question, the
company responds to each inquiry with an individually researched and prepared letter that responds to every one of the Customers’ questions. Southwest Airlines never sends out form letters.
People can copy our fares. They can copy how many flights we
have between cities. And they can tell their people to tell jokes
and read funny scripts. All those things can be programmatically put in place, but you can’t force someone to be nice if they
haven’t had any modeling of that, or any training for it, or any
rewards for doing it.
—Joyce Rogge, Southwest Airlines
It shows, too, in the role fun plays at Southwest Airlines. People are hired
in part because they enjoy life and don’t take themselves too seriously. Herb
Kelleher’s antics are legendary (dressing as Elvis, for instance, or as an Arab
sheik), but he’s not alone. When he stepped down as CEO and his functions
were taken over by Jim Parker and Colleen Barrett (see Figure 10-2), someone asked Jim how they were going to handle succeeding Herb, and he
replied, “Well, Colleen’s going to handle the smoking, and I’m going to handle the drinking.”19 Much of Southwest’s lightheartedness centers on planned
social events: annual chili cook-offs, spirit parties, Halloween celebrations,
272 Winning Behavior
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and deck parties. However, the spirit of fun is also casual and spontaneous:
decorating work areas with family and Employee photos, creating games to
entertain passengers at the gates and during flights, breaking into song, telling
jokes, and holding impromptu birthday celebrations. Being wild and crazy is
an art form at Southwest. People don’t have to be comedians to work at
Southwest, but it isn’t discouraged either. The emphasis is on being yourself,
being genuine, and being free to have a good time while you are working and
serving others. More than most other companies we have seen, Southwest
Airlines understands the value of fun and caring, and it encourages both organizational and individual behaviors that manifest those values. Clearly, this
creates an environment in which interpersonal and exceptional BDs are more
likely to occur.
Living The Golden Rule
The executive team at Southwest speaks regularly about the Golden Rule
as the guiding principle behind all of their interpersonal interactions and relationships. The interpersonal skills that flow from this ethic are an integral
part of the culture and Customer service orientation. The absence of this view
and lack of skills that naturally flow from it is also a filter for employment.
Why Southwest Airlines Soars: B2C Behavioral Differentiation 273
Figure 10-2. Jim Parker, Herb Kelleher, and Colleen Barrett. When Kelleher stepped down as CEO in 2001, Parker became CEO and Barrett became
president and COO. This experienced leadership team continues to drive behavioral differentiation at Southwest.
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The Golden Rule or the ethic of reciprocity is generally regarded as the most
concise and general principle of ethics.20 Simply put, it means to treat others
as you want them to treat you. At Southwest, this means that management
treats Employees with trust and respect because that’s how they would like
Employees to treat them. People are allowed to make mistakes and learn from
them. In short, they are empowered to be themselves. According to the leaders at Southwest, people must join the company with a desire for service, and
then the company can shape their behavior. The behavioral difference between Southwest Employees and other airlines’ Employees is apparent, at
least to Colleen Barrett. She believes that the kind of Customer interaction
shown in Figure 10-3 is the norm at Southwest. She said, “I sit in gate lounges
all the time and I can identify for you, even when they are not in uniform, who
the Southwest Employees are versus other airline Employees, because
they’re talking to one another, they’re animated, they’re making eye contact.
When they’re walking down a corridor they’re saying hello or at least acknowledging with their eyes the other people they are passing, whether they
are our passengers or not. It’s a human being thing!”21
274 Winning Behavior
Figure 10-3. At the Southwest Ticket Counter. The airline hires people
who are comfortable with themselves and have a strong sense of service.
Their values and attitudes help Southwest behaviorally differentiate itself
from its rivals.
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Barrett believes that the Golden Rule is a simple principle with a cumulative effect on Customer relationships and, ultimately, on the success of the
business:
If I try to teach anything to my front-line people, I teach them to deal
with their passengers the way they would their grandmother, their nextdoor neighbor, or the person they sit next to in church. Because really
and truly if you read our mission statement, which is posted all over, it
is as simple as saying, “Practice the Golden Rule everyday.” If you do
that with your fellow workers as well as your passengers, you are going
to have a happier day. Now it just stands to reason, and it’s not really
very complicated, if you have a better day, the people you are working
with will probably have a better day. If our Employees are happy, some
of that happiness will transmit to the passengers, if they are consistently
happy when dealing with us, then they are more likely to come back,
and then we probably are going to make a little money, and our shareholders are going to be happy. It’s really pretty simple. We know people repeat Customer service stories all the time, so I would rather have
them repeating good stories than bad.22
The Culture Committee
In Chapter 9, we discussed the important role culture plays in driving BD,
and Southwest Airlines is virtually unique among large companies in having
a standing committee dedicated to preserving the spirit and values of the company. In 1990, when she was still Executive Vice President—Customers,
Barrett formed the Southwest Airlines Culture Committee. Its members represent all regions and departments across the system. Their purpose is expressed in the committee’s mission statement:
This group’s goal is to help create the SOUTHWEST SPIRIT and culture where needed; to enrich it and make it better where it already exists; and to liven it up in places where it might be “floundering.” In
short, this group’s goal is to do “WHATEVER IT TAKES” to create,
enhance, and enrich the special SOUTHWEST SPIRIT and Culture
that has made this such a wonderful Company/Family.23
Will Southwest Airlines be able to sustain its unique character after Herb
Kelleher is gone? The answer lies in such tools as the Culture Committee,
which will help sustain his legacy, and in the tiers of leaders he left behind to
Why Southwest Airlines Soars: B2C Behavioral Differentiation 275
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run the company. The Culture Committee is a powerful internal behavioral
differentiator that helps sustain the external behavioral differentiators that affect Customers. Interestingly, this is one of the few standing committees in
Southwest Airlines, and it’s considered an honor to be a member.
From Customer Loyalty to Customer Advocacy
It should be clear from our discussion of Southwest Airlines that its “Positively Outrageous Service” is not the result of a department, or a program, or
a mandate from management. It is not secondary to the product; it is the product. Southwest flies airplanes, but it manages behavior, and the behavioral
differentiation that has made it the darling of the airline industry is based not
on proprietary technologies, brilliant ideas, or clever financial dealings but
rather on old-fashioned values and a strong sense of community. Is this unusual? According to Joyce Rogge, it is:
“I’ve worked other places besides Southwest Airlines, and it isn’t normal for a corporation of our size to have a culture that cares about its
Employees. I’ve worked at a smaller company, and it had a family
feel, but it was more of a ‘daddy as dictator’ family feel, as opposed
to growing up and learning, being given opportunities, having a safety
net—all those kinds of things. Although we are 34,000 people, it is a
family. There is an incredible effort from upper management to continuing that feeling and that culture. We have a culture where being
nice to one another has very high value. And it’s internally first, even
more than to our Customers.”24
Southwest’s behavior toward its Employees is a powerful behavioral differentiator. It creates the conditions in which those Employees are more
likely to treat Customers in ways that behaviorally differentiate the company,
and there are numerous stories of passengers who have received exceptional
treatment from Southwest Airlines Employees who were willing to do more
than was called for (and more than most other people would have done).
Imagine arriving at the airport gate to check your luggage with your husband and two small children in tow. You are on your way home from a visit
to family in Florida. You arrive ninety minutes before departure only to discover that your wallet with every piece of identification is missing. You have
your paperwork from your flight to Florida but nothing else. Luckily for you,
the person behind the ticket counter was Amy, a Southwest Airlines Employee, because you have chosen to fly with Southwest. In this time of heightened security, was there anything Amy could do?
276 Winning Behavior
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“Amy went over and above the call of duty to try to get us on the flight,”
this passenger recalls. “She called her supervisor to ask what she could
do. The first attempt was to fill out a yellow form that was to allow us
access to the concourse. However, when I attempted to pass through the
security gate, the airport security would not allow me to pass without
federally issued picture identification. They instructed me to return to
the ticket counter. I then went back and talked to Amy again. Due to the
enormous lines at both the ticket counter and the security gate, it was
about 15 minutes before the flight was to depart. She then decided to
personally escort us down through security and to the gate. When the security officer stopped us, Amy volunteered to personally take responsibility for us until we were able to get on the plane. Again, security
would not allow even this. They said the only way they would allow me
through was with a picture ID. I then decided to contact my employer
and have them fax a copy of my work ID. Amy gladly gave me the local fax number for the airline and retrieved the fax when it arrived. In
the meantime, she had to quickly get our luggage off the airplane. She
helped us retrieve our luggage, then booked us on the next flight home
without additional charges for the change in ticketing.” Amy’s efforts
to solve this family’s problems went well beyond what the family expected, and the Customer later wrote, “I have been a loyal Customer for
several years before this incident, but now your company has not only
a loyal Customer, but also a vocal advocate as well.”25
On another occasion, an elated but weary mother-of-the-bride was on her
way home from the wedding when security checked her briefcase and discovered an ornate cake knife. She was a frequent flyer and was normally careful to comply with the heightened security measures; however, in the commotion of the wedding the day before she had forgotten to put the knife in her
checked luggage. Furthermore, this was a family heirloom, passed on to her
from her mother, and she was not about to part with it. Security suggested that
she go back through the long check-in line to check the serving piece. It was
either that or lose it, she was told. But her Southwest flight was about to depart. As she accepted the inevitability of missing her flight, Greg, a Southwest
agent who happened by, said he could help.
“I felt an immediate sense of relief,” she later said. “There would be someone who could find an easier way to accomplish the same thing, without me
having to miss my plane. He offered to personally take the cake piece to the
baggage Customer service desk and to hand carry it to the plane to make sure
it made it back home with me! I cannot tell you how relieved I was. The sentimental value of the piece was the most important part, of course. Greg unWhy Southwest Airlines Soars: B2C Behavioral Differentiation 277
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derstood my predicament and stepped right in and solved the problem. He
even joked and smiled with me throughout the entire transaction. As he
walked by me (I was waiting in line again, waiting for my boarding pass!), on
the way to the plane, he smiled and said, ‘We only do this for cake knives!’”26
The Golden Rule is of no use to you whatever unless you realize that it is your move.
—Frank Crane
Another passenger had a brief but memorable encounter with a Southwest
agent named Kimberly at Austin’s Bergstrom Airport. She had received a call
from her twin sister in Lubbock, who told her that the caesarean delivery of
her child, scheduled a few days later, had to be done that day for medical reasons. She had flight arrangements to get her to Lubbock for her twin’s original delivery date, but getting there that day presented a serious challenge.
Both twins had wanted to be together for this special occasion and were distraught that it might not happen. The seven-hour drive between Austin and
Lubbock was out of the question because it would still get her there too late.
But flying did not look feasible either. Southwest is the only carrier with direct flights to Lubbock, but the only flight with seats available that day would
also get her there too late. The reservations agent she spoke to advised her to
get to the airport as quickly as possible and try for standby. Once at the airport, however, she found that that was not easy either.
“I could not get through security without a ticket, and I could not buy a
ticket due to the line,” she recalls. “So I could not even attempt to get on
standby. By then, I was a miserable mess. I approached the Customer service
desk from the end and asked to see the supervisor, who turned out to be Kimberly. Barely able to speak by now, I told her a short version of my need to
get to Lubbock. I can only imagine what she thought about this strange
woman crying in front of her, but she looked me square in the eye and said,
‘Let’s see what we can do.’”
Kimberly was able to get her a ticket, the woman said. “She called the
boarding gate and told them I was coming. Then, to top it off, she walked me
through security and right to the boarding gate. I was bawling the whole time.
I was only hoping to get on standby, and she got me on the plane. I hugged
her and told her I would never forget what she had done.” This story has a
happy ending. The woman did make it to Lubbock in time to see her twin give
birth to a baby girl.27
Is Southwest Airlines the only air carrier whose passengers would offer
testimonials to exceptional treatment? That would be unlikely. People who
are kind and empathetic, and who have a service mindset, can work any278 Winning Behavior
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where, and given the opportunity they may go out of their way to help Customers in distress. However, such treatment is more likely to occur at Southwest because the company’s policies and behavior toward its Employees encourage and reward them to go the extra mile for Customers—and to do it
consistently.
The Behavioral Difference After September 11
The terrorist attacks on 9/11 had a devastating effect on the airline industry. Air travel ceased entirely for several days and then came back slowly as
the government was able to institute more stringent security procedures. Jittery passengers were reluctant to fly, and it took months for the airline industry to recover. By October 17, just over a month after the attacks, more than
122,000 people in the airline industry had been laid off. The majors led the
way: United and American laid off 20,000 each; Delta, 13,000; Continental,
12,000; U.S. Airways, 11,000; Northwest, 10,000; Air Canada, 9,000; British
Airways, 7,000; and America West, 2,000.28 As usual, Southwest took a different approach. Although demand was down, Southwest decided to keep flying a full schedule as soon as airports reopened—and they chose not to lay off
a single Employee. Management did discuss whether to pay workers for the
few days the planes were grounded during the crisis, but Colleen Barrett
made it a short discussion. “Pay ‘em. This isn’t their fault. It’s the right thing
to do.”29 However, the board of Southwest Airlines, along with Kelleher,
Parker, and Barrett, chose not to pay themselves. Following 9/11 and through
December 31, 2001, the board declined to accept any board fees, and Southwest’s top three leaders suspended their own salaries in order to preserve operating capital. That is an unprecedented example of leaders differentiating
themselves through their behavior.
Southwest’s cash-starved rivals may have had little choice but to cut back
on flight schedules and Employees. Most were swimming in red ink already,
and 9/11 dealt a severe blow. In contrast, Southwest decided to reduce fares
and fly a full schedule, to get people back in the air as soon as they were ready
to fly. They thought it was important to communicate confidence in the air
traffic system and to help people return to what would pass for normalcy after the terrorist attacks. Geoffrey Colvin, writing in Fortune, noted how
Southwest’s bold decision to keep flying was paying off:
“I suspect Jim Parker is smiling. He’s the new CEO of Southwest Airlines, having succeeded Herb Kelleher at the worst possible moment a
few months ago. After September 11, I figured Southwest’s profit
streak, one of the most remarkable records in business—the company
Why Southwest Airlines Soars: B2C Behavioral Differentiation 279
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has made money every year for the past 28 years in a notoriously awful industry—was finally toast. But maybe not. Alone among major
airlines, Southwest has not cut back operations, and management actually believes it could show a profit for the year. Just for the perspective,
this year will probably be the worst in this business’ pathetic financial
history, with the industry losing $4 billion to $6 billion. Now imagine
all those carriers going deeper in the hole every day, impairing their
ability to invest, market, and hire for years to come, while Southwest
stays in the black. That’s why—you won’t believe this, but it’s true—
Southwest is now worth more than all the other airlines in America
combined.”30
Southwest’s response following 9/11 is indicative of the maverick way it
has approached the airline industry and conducted its business all along.
While the other airlines responded predictably and in mass, Southwest chose
a different path that behaviorally differentiated it in the eyes of its Employees and its Customers. Table 10-1 summarizes the behavioral differentiators
and the impacts of those differentiators for this remarkable B2C company.
B2C Behavioral Differentiation
In business-to-consumer companies, much of the BD occurs during various interactions between Employees and Customers. However, as our discussion of Southwest Airlines shows, the basis for differentiating behaviors
with Customers is in how the company treats its Employees. Companies like
Southwest Airlines pay an extraordinary amount of attention to their culture
and to the way Employees are treated internally. Exceptional behavior toward
Employees is almost a prerequisite for exceptional behavior toward Customers. Indeed, in businesses that treat Employees as second-class citizens,
it’s difficult to imagine how or why Customers would be treated any differently. You reap what you sow, and if you hire Employees for their service orientation and friendly attitudes, if you treat them well and give them the latitude and responsibility to treat Customers well, and if you establish policies
and procedures that enable exceptional Customer treatment, then you have
the right conditions for systematic and consistent behavioral differentiation.
In our research on BD, we examined a number of professions to determine
what Customers expected and what happened when they received exceptionally positive treatment and exceptionally poor treatment. We included one
profession—new car salesperson—that most of us like to complain about and
that represents one of the purest forms of a business-to-consumer transaction.
280 Winning Behavior
(text continues on page 285)
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Table 10-1. Southwest Airlines’ Behavioral Differentiators.
BD Driver Behavioral Differentiator Impact
Leadership Leaders like Jim Strengthens commitment to
Parker and Colleen Barrett, the culture; ensures that
who are grown from within transitions in leadership are
not jarring to the culture;
communicates commitment
to employees; offers
opportunity internally,
which increases retention
Leadership Herb Kelleher’s antics Differentiates from the stony
(such as arm wrestling for seriousness of rival business
the right to use a slogan) executives and airlines;
creates a lightheartedness
and sense of fun that
encourages other employees
not to take themselves too
seriously
Leadership Not furloughing employees Sends a strong message to
after 9/11 despite the employees, customers, and
required grounding of flights the market; builds employee
immediately after the attacks loyalty; reinforces the
“people first” values
Leadership Deciding to pay employees Stands by employees
after 9/11 for the days they through an event that was
did not work not their fault; builds
employee loyalty and
retention; enhances
employees’ willingness to
stand by and help customers
Leadership Herb Kelleher, Jim Parker, Sends a strong message that
and Colleen Barrett suspend- they are willing to sacrifice
ing their own salaries after first and most; builds
9/11 and through the end of employee admiration and
2001; the Board declining to loyalty through their
accept board fees for the willingness to bear the pain
same period themselves
Leadership A deep commitment to Communicates a high
and “Positively Outrageous service standard; sets the
Culture Service” expectation of the
extraordinary
Why Southwest Airlines Soars: B2C Behavioral Differentiation 281
(continues)
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Table 10-1. (continued)
BD Driver Behavioral Differentiator Impact
Leadership Employees come first; Makes employees feel
and believing and behaving as valued; creates conditions
Culture though people make the in which employees will
difference value and support each
other; encourages already
service-minded people to
treat customers
exceptionally well
Leadership Viewing themselves as being Focuses the business in the
and in the customer service right ways; encourages
Culture business (they just happen service behaviors that
to fly airplanes) differentiate; helps everyone
prioritize efforts to achieve
the primary goal
Leadership The “love” theme manifest Communicates a strong
and in many ways: slogans, sense of caring, both
Culture campaigns, messages intern- internally and externally;
ally and to customers appeals to customers’ family
values; conveys the people
first attitude of the
company; makes people
feel better about working at
Southwest
Leadership Numerous rewards programs, Reinforces the right
and such as “Heroes of the Heart” behaviors, as well as the
Culture culture; helps create cultural
myths, legends, and heroes;
makes people feel good
about themselves and the
company
Leadership, Having a culture committee Emphasizes the importance
Culture, that looks after and builds of culture and the deterand the culture mination to sustain it;
Process delegates responsibility for
cultural preservation to
employees; sustains the
founders’ momentum;
makes Southwest unique
Culture A “warrior spirit” that has Imbues the company and its
helped the company face employees with a sense of
numerous challenges and uniqueness; increases the
continues to make it more willingness to work harder
competitive today and do more to “prove” to
282 Winning Behavior
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those who sought to crush
the company and who still
criticize its unconventional
approach
Culture Everyone at Southwest has Reinforces the service
a customer; all relationships mindset; creates a set of
are considered equally mutual dependencies;
important guides behavior
Culture Regardless of rank or Reinforces the
and position, everyone helps get egalitarianism of the culture;
Process the planes in the air. is a strong behavioral
differentiator for employees,
who see that managers are
willing to load baggage, too
Culture Routinely going the extra Encourages exceptional BD;
and mile for customers, such as helps customers solve
Process escorting them to the problems; builds customer
departure gate when they loyalty; makes employees
are running late feel good through helping
others
Culture The words “Customer” and Distinguishes the culture
and “Employee” are always from others; sends a strong
Process capitalized in Southwest message about the
communications. importance of these two
constituent groups
Culture The spirit of fun; many Creates a warmer, friendlier
lighthearted events and environment; encourages
celebrations; numerous people to make work
occasions where people enjoyable; helps people
dress in costumes bond internally and thus be
more supportive and helpful
with each other
Culture The lighthearted spirit on Can take some tension out
airplanes; jokes and games of flying for passengers who
from pilots and flight are anxious; makes the
attendants experience more enjoyable;
brightens the day
Culture Living the Golden Rule as a Sets a high behavioral
matter of principle and using standard; gives a simple rule
it as a behavioral guide for guiding behavior;
establishes the primacy of
Why Southwest Airlines Soars: B2C Behavioral Differentiation 283
(continues)
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Table 10-1. (continued)
BD Driver Behavioral Differentiator Impact
treating others well; brings a
sense of humanity to the
work; reinforces the culture
and values
Culture A tight-knit “family” culture Helps employees feel
supported; creates a
stronger sense of belonging;
encourages people to look
out for one another; breaks
down barriers between
functions and ranks;
encourages employees to be
themselves and feel
accepted
Culture Friendliness and good humor Creates a more pleasant
and are the norm; people are working experience for
Process hired for attitude and values employees and a more
and then encouraged to pleasant flying experience
be themselves for passengers; builds a
sense of liking for
Southwest’s employees,
which builds a stronger
sense of liking and loyalty
for Southwest Airlines
Process Rapid Rewards program, Rewards frequent travelers
which is based on number on Southwest’s city-to-city
of flights rather than miles routes and does not
penalize them because the
distances are not
cumulatively large; is a
more generous program and
customers know it.
Process A group interviewing process Helps ensure cultural fit of
during hiring that focuses new hires; makes
on attitudes and service employees feel part of the
orientation process, which increases
their ownership; reinforces
the tight-knit family culture
284 Winning Behavior
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Process Southwest’s University for The name itself
People communicates an
important distinction
between this educational
group and other corporate
universities.
Culture The Freedom Planner new Establishes a unique,
and hires receive while attending participatory contract with
Process the University for People employees; reinforces the
culture; encourages
employees to take
responsibility for themselves
and others
Process Sending cards to employees Communicates caring;
on their birthday and other enhances the feeling of
special occasions family
Process Responding to customer Is a more personal form of
communications via letter communication; conveys
instead of email the message that Southwest
is different; increases
customer loyalty
Why Southwest Airlines Soars: B2C Behavioral Differentiation 285
The results of our surveys are shown in Tables 10-2, 10-3, and 10-4. First, we
will look at what Customers expect when they encounter someone selling
new cars.
We suspect that these expectations apply to every situation in which a consumer buys something from a company. Whether the company is selling new
cars, life insurance, groceries, lumber, wrapping paper, watch bands, computer software, or transportation to Phoenix, consumers expect the seller to
know the product, to provide accurate information that helps them make informed choices, and to be a capable and honest advisor. What we as consumers further expect, though we are often suspicious of this, is that the sellers will act in our best interests, that they will steer us in a direction that is
primarily right for us (and perhaps coincidentally right for them). Sellers
whose behaviors create positive BD will sometimes advise us not to buy a
particular product (even though they lose the sale) because they want to see
us make the right buying decision. Sellers on the other end of the BD spectrum will let or even encourage us to buy something that is not right for us if
it is profitable to them. Often, we later discover that this has occurred, and we
(text continues on page 291)
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Table 10-2. Behavioral Expectations of New Car Salespeople.
Technical Expectations
To provide clear answers on technical questions
To be able to compare different models and makes
To know their product well enough to explain the
benefits as they relate to my needs
To be knowledgeable about the automobiles in
inventory to help me make a buying decision
To have knowledge about the services available
To educate me on the different options available for
each automobile and its functionality
To be aware of new and upcoming technologies that
will be on the market, like hybrid cars, etc.
To know about the features and quality of cars
To be aware of the quality and safety ratings assigned
to each car
To have extensive knowledge in their field
Behavioral Expectations
To be upfront and honest with me
To provide “just the facts” with no embellishment
To be honest
To not pull the, “Well, I’ll have to check with my
manager.”
To answer all questions in plain English
To have the ability to be straightforward
To not take years negotiating a price
To be honest about the weaknesses of the product as
well as the strengths
To be fair on the price
To treat customers like intelligent people
To show me only what I ask to see and nothing more
To be sensitive of my time by not wasting it
To treat me with respect
Respect To let me look the cars over at my convenience
To not hover over me but still be accessible if I have a
question or wish to take the car for a test drive
To not be pushy
To not shove what they know down my throat
To be a good listener
To know when to back off
286 Winning Behavior
Knowledge,
Information, and
Answers
Honesty,
Candor, and
Straightforward
Communication
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To meet reasonable needs and requests
To bend over backwards to please me
Responsive To go above and beyond to find the color/style I want
To give quick, courteous service
To give good follow up service
To be helpful
To listen to my needs and help me to obtain the car
that will fit my needs
To understand my limits and expectations without
butting in
To ask me questions about my needs
To focus more on fulfilling my needs than on making a
sale
To be a consultant in matching the car, features, and
price with my needs
To show me ways to better help me; e.g., with
financing, servicing, and convenience
To help me find the car that is right for me
To fully represent my needs
To tailor their sales efforts to my needs, not theirs
To ask me questions about my family and lifestyle in
order to help find the appropriate choice
To identify my needs and explain the benefits to the
features that address my issues
To provide me with solutions that reflect my needs
To ask a lot of questions
To take pride in giving the customer the best deal
possible
Table 10-3. Positive Differentiating Behaviors of New Car Salesmen.
Excellent Performance
He didn’t pressure but gave me all the information I
needed about the car.
She was very informative and extremely helpful.
Competence
He knew everything about cars! He even knew all the
features of competing brands, and he was right. I
checked. The time spent with him was like getting
an education on automobiles. I’ve never met
someone who loved his work as much as this guy
did.
He didn’t make me feel stupid for wanting what I
wanted but began an extensive search to find the
vehicle I was looking for.
Why Southwest Airlines Soars: B2C Behavioral Differentiation 287
Customer-First
Attitude
(continues)
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Table 10-3. (continued)
Positive Behaviors
She worked with me over the phone for three months
before I was ready to buy the car and kept me
informed of the promotions/deals that they were
having.
She listened to what I wanted and answered my
questions.
He would give me information and usually attached a
very thoughtful question that helped me decide what
I did need and what I didn’t.
She was forthright and upfront during the purchasing
transaction.
He didn’t try to hide anything under the table.
She did not pressure me but followed up every week
for the next three weeks.
He wasn’t pushy but was very low-key and sincere.
He didn’t try to push the “fluff” that the car had to offer,
but explained the benefits of the features that I
seemed to have issues with.
He listened carefully and worked on my behalf,
negotiating fairly and patiently.
He didn’t try to push an in-stock car on me when they
didn’t have the car I was looking for on the lot, but
searched until he found the one I wanted.
She called twice after the sale to see if things were
going well.
He arranged a great deal on the car I wanted and made
me feel like a winner when I drove it home.
He didn’t try to sell me more than I wanted.
She listened to me and understood my needs and my
budget and respected them.
He wanted to know what was important to me before
trying to put me behind the wheel.
He had a sense of humor and treated me like we were
friends, which we later became.
He was interesting and interested, and when I did ask a
question about the vehicle, he knew the answer
without having to go ask someone else or look it up.
She knew I didn’t have much money and so she did her
best to get me the best financing possible, even
going so far as to suggest I wait to buy because she
knew of a great deal that was coming up.
288 Winning Behavior
Good, Open
Communication
Nonintrusive and
Responsive
CustomerSatisfaction
Oriented
Showing Caring
and Taking a
Personal Interest
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He gave me some of his classical CDs that he was
finished with because he knew my daughter was a
classical musician.
He went out of his way to do little extra acts of service,
like setting my radio stations for me and
programming my door opener.
He offered to let me take the car for the weekend and
even gave me gas vouchers.
Table 10-4. Negative Differentiating Behaviors of New Car Salespeople.
Poor Performance
He did a horrible job of explaining the lease terms.
I learned more on the Internet than this guy could tell
me about the car. He was truly worthless, but he
expected to make a big commission on the sale.
She didn’t show up for an appointment that we made
with her.
She didn’t know anything about the car’s performance.
Every time we asked her a question about the safety
record or the gas mileage or scheduled maintenance
she had to go ask someone else.
He did not deliver the car on the day promised and had
a lot of lame excuses about why it wasn’t ready
when I needed it.
Negative Behaviors
He went out of his way to make me feel stupid.
He spoke down to me as if I wouldn’t know the
steering wheel from the brake pedal.
She assumed I had not done the requisite research.
He had a condescending attitude.
He had to go with us on a test drive and when we
wanted to switch drivers so that I could see how the
car handled he wouldn’t let me drive because I am a
woman.
He assumed that because I was female I had no clue
about the product.
He ignored me (I was actually the one buying the car)
and instead tried to sell the car to my boyfriend.
Why Southwest Airlines Soars: B2C Behavioral Differentiation 289
(continues)
Exceeding
Expectations
Incompetent or
Unprofessional
Condescending
or Patronizing
Attitude
Chauvinistic or
Prejudiced
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Table 10-4. (continued)
He didn’t bother answering my questions and only
answered the questions of my male friend who was
accompanying me.
He kept butting in with his own opinion as my husband
and I were trying to discuss the car among ourselves.
Intrusive
He wanted to sell what he had, not what I wanted.
He used “salesy” language, which completely turned
me off.
She was entirely too pushy.
He seemed to be willing to say anything to get a sale.
She showed me cars other than what I was looking for.
He made assumptions instead of asking and listening to
what I wanted and why.
He only wanted to talk about monthly payments.
He focused on selling me a luxury car when what I
needed was an economy car for my daughter.
She tried to push a truck on me that didn’t meet my
needs.
He didn’t listen to me and was only concerned with
making the sale.
He was impatient and demanding.
He tried to talk me into a car that was way above my
price range.
He did not listen and so we went to a different lot.
He lied to me about the financing rates I was getting.
He told me those were the best he could offer and
when I told him that I could get lower rates from the
bank he suddenly decided he could offer lower
rates.
He didn’t point out major flaws in a used car that he
should have been aware of.
He wouldn’t be straight with us about the price. Every
time he showed us the latest “offer” from his “sales
manager” something new had been added that we
hadn’t asked for and they didn’t bother to explain.
When hell freezes over and they are the last car
dealership on earth, I may go back to them. Or I
may just travel by bus.
He tried to talk me into add-ons that were totally
ridiculous.
She lied about the product, the price and the
maintenance.
He was unwilling to negotiate in good faith.
290 Winning Behavior
Unconcerned
with Client
Needs
Manipulative
and Dishonest
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He took the keys to the car I was going to trade in, if I
found a car I wanted, and wouldn’t give them back
when I didn’t decide on anything.
He seemed slick and manipulative. He had one of
those “game face” smiles that he wore when he
talked to customers. I didn’t trust anything he told
me.
Why Southwest Airlines Soars: B2C Behavioral Differentiation 291
vow not to return to that seller. Smart companies never try to cheat the Customer, even inadvertently, and that leads us to consumers’ behavioral expectations of new car salespeople (and, by extension, all salespeople).
In a nutshell, consumers expect sellers to be honest and candid with them.
This is really a bedrock expectation, because nothing else matters if this is not
true. They also want to be treated with respect. They want to be listened to and
understood, and then they expect sellers to help them get what they want, which
may not be what’s sitting on the shelves, what’s being discounted that day (because of overstocking), or what the seller gets the biggest commission on. Consumers don’t want to be pressured into making the buying decision, but when
they are ready they expect sellers to be fair and reasonable in negotiating the
terms. This is not earthshakingly new, but it is remarkable how many companies and salespeople don’t seem to know this or don’t care about it.
Behavior matters. If you or your Employees treat Customers badly, or even
carelessly, it will affect your business. Sooner or later, poor behavior will
cripple you because consumers will prefer to shop elsewhere. They don’t
need you; they need what you are selling. If they can buy it from someone
else who treats them better, who is honest and forthright, who has a lighthearted attitude and makes them laugh, who looks out for their interests and
occasionally goes the extra mile to help them, then that is where they will
shop. It’s very simple, and a lot of businesses, including major airlines that
compete with Southwest, don’t get it. Southwest does get it, and it has had a
record three decades of profitability in a troubled industry that has seen every
other major carrier lose money repeatedly. Enough said.
Tables 10-3 and 10-4 report what Customers experienced from new car
salespeople when they had remarkably positive experiences and remarkably
negative ones. As we have shown in other chapters, what Customers remember, what sticks in their mind as they reflect on their buying experiences, are
positive and negative behaviors. Technical competence accounts for very little of their impression. First and foremost in their minds is how the sellers beCopyright © 2003. AMACOM. All rights reserved. May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law.
haved toward them.
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We are going to close this chapter with another quotation from Colleen
Barrett. We said in Chapter 6 how important it was for behavior to be genuine. Most people have finely-tuned BS detectors. They know a forced smile
when they see one, they can tell when someone’s just going through the motions, and they can spot insincerity the moment the faker assures them how
sincere he is. That’s why hiring right is a prerequisite to building a workforce
that will behaviorally differentiate you with Customers. Then they have to be
themselves, as Barrett describes here:
When I go to new hire classes and there are a hundred and seventy people in the room, I tell them, “This is an incredible offer I am making you,
one that doesn’t get offered very often in corporate America. I want you
to take your ingredient, whatever it is, and I want you to think about it before you go out for the first flight. Something about you turned the recruitment team on, and I can’t figure that out in ten minutes for each of
you. I’ll bet, though, if you dig around in your soul, you can figure out
what it was. And that is what I want you to take with you every day to
work. It might be a warm smile. It could be that simple. It might be a
clearly altruistic spirit that people just can’t miss. It might be an incredible sense of humor. It might be that you want to sing every single PA that
you ever make! It might be that you are the best joke teller they ever met.
Whatever it is, if you’ll share that everyday just with your fellow workers, to me that’s half the key. It isn’t just with the passengers. We are giving you the freedom to be individualistic. Most companies, especially in
the airline business, don’t want that. They want the exact opposite.31
Challenges for Readers
1. Part of Southwest Airlines’ success can be attributed to its business model,
which is a radical departure from the business model most other major airlines follow. How different is your business model from the one your rivals use? Map the business model used by most players in your industry.
Then challenge each element and assumption. Does it have to be this way?
Do the same with the behavioral paradigm in your industry. How could
you treat Customers differently? In ways that would behaviorally differentiate your company?
2. Southwest is known for its innovative programs, such as a frequent flyer
program that rewards passengers for the number of trips rather than accumulated miles. How innovative are your programs? What could you do
differently that would delight your Customers and differentiate you from
your rivals?
292 Winning Behavior
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3. Southwest Airlines’ BD stems from its attitude toward its Employees and
the differentiated way the company treats its Employees. Southwest has a
family spirit and encourages people to be themselves and have fun. How
does that compare with the way your Employees are treated? Do you have
a family atmosphere? Do people encourage and support one another? Do
your top managers step in and perform front-line jobs now and then? (Or
do they remain in the ivory tower?) Is your workplace a fun place? The
point isn’t that you have to be like Southwest Airlines but that you create
a working environment that people enjoy, that motivates them to work
hard for you even if you are not paying top dollar in wages and benefits.
How well are you doing in this area?
4. There’s an old saying in Texas that you can’t light a fire with a wet match.
If you want fire, you have to have some spark in you. Southwest got a lot
of publicity based on Herb Kelleher’s jokes, costumes, and irreverent attitude. Again, the point is not to emulate Herb Kelleher, but do your leaders
light people’s fires? Is there some energy and excitement in your company
that prompts others to be as carefree and committed as Southwest Airlines’
Employees are?
5. Southwest Airlines preaches and practices the Golden Rule. What do you
preach and practice?
6. Herb Kelleher and other senior leaders at Southwest believe that culture
is their number one priority. They formed a culture committee to preserve, protect, and extend their unique culture. Have you done anything
similar? How do you manage your culture? What more could you do to
ensure that this important driver of BD is a powerful and sustaining force
in your organization?
7. Tables 10-2 through 10-4 present what Customers expect from new car
salespeople, as well as their best and worst experiences with them. Consider conducting a similar survey of your Customers or people in the marketplace who purchase your types of products or services. What do they
expect of you? In their best experiences, what have they received? In their
worst experiences, what has happened? How do your own company’s behaviors stack up?
Endnotes
1. Jack Trout, Differentiate or Die: Survival in Our Era of Killer Competition (New York: John Wiley & Sons, 2000), pp. 46–47.
2. Colleen Barrett quoted in Margaret Allen, “GROUND Controller,” Dallas Business Journal (August 2001).
Why Southwest Airlines Soars: B2C Behavioral Differentiation 293
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3. Kevin Freiberg and Jackie Freiberg, Nuts! Southwest Airlines’ Crazy
Recipe for Business and Personal Success (Austin, Tex.: Bard Press,
1996).
4. “SWA in a Nutshell,” Southwest Public Relations, Revised (January 18,
2002), p. 2.
5. Freiberg and Freiberg, op cit., p. 62.
6. Jeffrey Pfeffer and Charles A. O’Reilly III, Hidden Value: How Great
Companies Achieve Extraordinary Results with Ordinary People
(Boston: Harvard Business School Press, 2000), p. 21.
7. Colleen Barrett interview with Pamela Wise (March 1, 2002).
8. “SWA in a Nutshell,” Southwest Public Relations, Revised (January 18,
2002).
9. Barrett, op cit.
10. Ibid.
11. Joyce Rogge interview with Pamela Wise (March 1, 2002).
12. Herb Kelleher quoted in “The Jack and Herb Show,” Fortune (January
1999), p. 166.
13. Rogge, op cit.
14. Kenneth Labich, “Is Herb Kelleher America’s Best CEO?” Fortune
(May 1994), p. 129.
15. Donna Conover interview with Pamela Wise (March 1, 2002).
16. Barrett, op cit.
17. Rogge, op cit.
18. Matthew Boyle, “America’s Most Admired Companies: The Right
Stuff,” Fortune 145, 5 (March 2002), p. 86.
19. Herb Kelleher quoted in Katrina Brooker, “The Chairman of the Board
Looks Back,” Fortune (May 2001), p. 76.
20. “Shared Belief in the Golden Rule,” www.religioustolerance.org/
reciproc.htm (April 1, 2002).
21. Barrett, op cit.
22. Ibid.
23. Southwest Airlines Culture Committee Mission Statement. Used with
permission.
24. Rogge, op cit.
25. Stories adapted from selected Customer letters sent to Southwest Airlines, November-December, 2001. Reprinted with permission.
26. Ibid.
27. Ibid.
28. LUVLines, Special Issue (October 2001).
29. Colleen Barrett quoted in “Nothing but the plain truth,” U.S. News &
World Report (January 2002), p. 58.
294 Winning Behavior
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30. Geoffrey Colvin, “Smile! It’s Recession Time!,” Fortune (October 29,
2001); www.fortune.com/indext.jhtml?channel=print_article.jhtml&
doc_id=204725 (December 19, 2000).
31. Colleen Barrett interview with Pamela Wise (March 1, 2002).
Why Southwest Airlines Soars: B2C Behavioral Differentiation 295
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