Nofie Iman

No one takes the job of another person for granted. The skycap is just as critical as the pilot. You can always count on the next guy standing there. No one department is any more important than another.
~Southwest Airlines’ gate agent

As I wrote a few months ago, airlines industry notably recognized as one of the industry with very strict competition and bloody market space. Not only it will cost you a lot of capital invested, but also decrease your profit sharing and deduct your market share. Most airlines have implemented some form of innovative work system or human resource practices over the past decade to strengthen relationships between management, frontline employees, or among frontline employees themselves — but comes with no results.

One of the companies who have successfully created a blue ocean and resulting in its powerful performance in airline industry is Southwest Airlines. For most of 2002 the total market value of Southwest was about $9 billion — larger than that of all other major U.S. airlines combined. Fortune magazine has called it “the most successful airline in history.”

Southwest has also achieved high levels of employee satisfaction. It has been included in Fortune magazine’s list of the “100 Best Companies to Work for in America” three years in a row, and has consistently enjoyed lower turnover rates than other U.S. airlines. Many of Southwest’s innovations were motivated by the ambitious, counterintuitive strategy of offering short-haul service at low cost.

#1 Lead with Credibility and Caring

Like American, Continental, and United Airlines at various points in their history, many organizations have suffered years of mistrust between management and frontline employees. However, without credible, caring top leadership, the other organizational practices are in jeopardy. The behavior of top leadership serves as a model for the rest of the organization, helping to illustrate and animate the principles that underlie the other organizational practices that you have put into place.

The credible leadership of Herb Kelleher and Colleen Barrett has created credibility throughout the organization, and serves as a foundation for other leaders throughout the company, including the frontline supervisors. Without credibility on the part of top leadership, there would be no chance of a long-lasting partnership with employee

In addition, the caring leadership of Herb Kelleher and Colleen Barrett has helped to create the basis for strong family-like ties within Southwest, and a concern for supporting the family relationships of employees at home. It is clear that top leadership is not the be-all and end-all to strong organizational performance, but that top leadership plays a critical role in either supporting or undermining the effects of the other organizational practices.

#2 Invest in Frontline Leadership

Frontline employees would likely receive less coaching and feedback on their work, and would look instead to quantitative performance measures to figure out how they were doing. These measures tend to be less effective at capturing things like helping across functional boundaries, and more effective at capturing performance of a specific job. There are also fewer opportunities to hear a management perspective. As a result, it is a much bigger job for the organization’s top leadership to reach the frontline employee, with less help from frontline leadership.

Similarly, a reduced supervisory staff may undermine your efforts to make unions into partners rather than adversaries. With reduced supervisory staff, there is less opportunity for day-to-day conversations through which to work out a set of shared objectives between management and non-management employees. As a result, the negotiating table becomes less a place to formalize an ongoing conversation and more a place for strangers with competing objectives to meet warily.

#3 Hire and Train for Relational Competence

Because pilots were still hired and trained to exhibit a command personality, they had no concept that the gate agents might have a valuable perspective to contribute to the decision. The real problems are pilot thinks he is in total control and that the ground workers don’t know as much. The gate agents are getting around the pilots by cheating, saying they already got approval from the pilots when they didn’t.

If employees continue to be hired and trained without regard for relational competence, any efforts to use conflicts as an opportunity for learning, bringing them out into the open rather than submerging them, are likely to backfire. New procedures for conflict resolution are not likely to succeed if relational competence is not fostered in the hiring and training processes.

#4 Use Conflicts to Build Relationships

Flexible job descriptions are great in terms of expanding the scope of responsibility, but they do create the potential for conflicts that would not otherwise arise. The expectation that you will do your own job, plus anything else that might be necessary to help the operation succeed, blurs the boundaries between jobs and creates more areas that are open to interpretation and thus conflict.

Likewise, broad performance measures that hold people jointly responsible for outcomes can create conflict. If you are responsible only for your own task, there is less opportunity for conflict. If you are responsible for the outcome of the overall work process, there is less clarity about whose fault it is when something does go wrong. Proactive conflict resolution can make the difference between letting these conflicts fester or using them as an opportunity for learning about the overall process and the role that each party plays in it.

#5 Bridge the Work/Family Divide

To be truly engaged in strong working relationships a person must be able to bring his or her real self to the workplace. Southwest’s efforts to make the workplace feel like a family helps to cement those working relationships at a deep level of commitment, by creating a strong sense of collective identity at work. The hazard of these family-like relationships at work is that employees will neglect their own family relationships, creating dysfunctional home lives that will eventually undermine employee well-being and performance.

Accordingly, Southwest seeks to support and strengthen the family ties of their employees, through flextime policies and emergency funds to help employees in need. By supporting the family and non-work commitments of its employees, and by making the workplace itself feel like a family where one can be one’s true self, Southwest gains the loyalty and commitment of its employee at a deep level, thus providing a foundation for all its other practices.

#6 Create Boundary Spanners

A boundary spanner like the operations agent at Southwest plays an informational role, helping to collect and transmit information from one function to the other, including subtle contextual information that is not easily codified and transmitted through a technology interface. But Southwest’s boundary spanner also plays a social role, helping to build shared goals and a shared understanding of the work process so that each party is more likely to take the right actions when there is a need to adapt quickly to changing circumstances.

When information technology is used to replace the role of the boundary spanner, some of these shared understandings will start to break down over time. Supervisors are likely to fill in the breech, spending their time coordinating across functional boundaries, thereby detracting from their role in providing coaching and feedback to frontline employees.

#7 Measure Performance Broadly

Cross-functional performance measurement is central to Southwest’s system of organizational practices. Without it, there is no need for flexible work rules, and far less need to hire and train people for relational competence. These other organizational practices would become unnecessary, wasted investments. When performance measures are functionally specific, the coaching and feedback role of frontline supervisors becomes far less critical. The coaching and feedback role of supervisors is particularly useful for helping employees understand how their own actions affect overall process outcomes.

When one’s performance is measured only in terms of one’s own functionally specific tasks, feedback is more straightforward and supervisors have less value to add to the process. This approach was exemplified by American Airlines, where control of the operation was achieved through functionally specific performance measures, rather than through supervisory coaching and feedback.

#8 Keep Jobs Flexible at the Boundaries

If other practices in the organization are geared toward minimizing functional divisions, and yet there are rules in place to discourage or actively prevent employees from performing the work of others, the message to employees is confusing and frustrating.

Rigid job descriptions tend to reinforce beliefs that certain work is the territory of certain people, and that others are not entitled to do it, even in circumstances where it would clearly make sense for the sake of operational performance. This territoriality undermines the principle that is communicated by your other organizational practices, making them a wasted investment at best, or worse, creating cynicism as to the organization’s true principles.

#9 Make Unions Your Partners, Not Adversaries

The loyalty that employees feel toward their company is magnified when the union they belong to is engaged in a mutually supportive partnership with the company. An adversarial relationship, by contrast, forces employees to choose between loyalty to their union and loyalty to their company, resulting in divided loyalties within and among employees. An adversarial relationship can result in job actions taken by one work group against the company, putting stress on the other work groups and thus undermining the quality of relationships among frontline employees.

The importance of labor/management partnership for achieving flexible job descriptions cannot be underestimated. In any unionized setting, job descriptions are subject to contractual negotiations. One of the surest outcomes of adversarial labor/management relations is an attempt to negotiate rigid job descriptions to protect union members from being taken advantage of by unscrupulous managers.

#10 Build Relationships with Your Suppliers

What result can you expect if you have developed all of the practices to support strong relationships within your organization, but you still have arm’s-length relationships with some of your most important suppliers?

At the very least, there is a missed opportunity — you are missing the chance to leverage your internal relational capabilities to create strong relationships with external parties, and thereby missing out on the operational benefits that can result from external partnerships. At worst, the message that employees receive is not clear, which can lead to confusion or cynicism about the organization’s true principles, and thus to an erosion of those principles.

If we treat the airports, air traffic control, and the aircraft manufacturers with disrespect, jockeying for the most favorable position for ourselves without regard for their interests, then that same us/them approach may come to infect our internal relationships as well.

How Southwest Did it All?

Southwest’s success is not due to one particular organizational practice or another, but rather to the overwhelming consistency among them. Each organizational practice tends to reinforce the others or, if designed in a way that is inconsistent with relational principles, tends to undermine the others. The idea that high performance depends on bundles of organizational practices—rather than individual practices—is a powerful one that extends to other industry settings.

Evidence from the auto industry, the apparel industry, the steel industry, and the telecommunications industry shows that bundles of practices can have powerful, positive effects on performance. A new form of consistency can be achieved. Each of the discrete practices can be consistent with the other practices, so that all will reinforce the desired task performance.

Economists have shown that the performance advantage from consistent organizational practices is due to “complementarities” among them. Practices are complementary if adopting one increases the benefits of having the other, or if not adopting one decrease the benefits of having the other.

Because of the psychological dynamics of reinforcement, consistency is likely to be particularly important for organizational practices that are designed to influence employee attitudes and behaviors. When an organization sends mixed signals—on one hand we select and train employees for relational competence, but on the other hand performance measurement is functionally based—the result is confusion and cynicism about the organization’s true principles, undermining investments in both practices.

Southwest Airlines vs. Garuda Indonesia

Sure, we can’t compare them apple-to-apple — as they perceived themselves differently and compete in very different market segments. However, as a most reputable airline in the countries, I do personally expect Garuda Indonesia can learn and adopt those principles to gain success in the industry. Just like Garuda, Southwest has also been in an unsurpassed record in the highly turbulent, frequently unprofitable, airline industry.

During the past decades, Southwest uses high performance relationships to overcome strategic challenges — something that drives them to the continuous improvement and creative innovation. Most popular accounts of Southwest’s success have focused on the charismatic leadership style of founder, former CEO, and current chairman Herb Kelleher.

Although leadership, culture, strategy, and coordination are critical success factors, they are only part of the story. Southwest’s relationship focus, its commitment and passion for shared goals, shared knowledge, and mutual respect, joins with frequent, timely, problem-solving communication to form a powerful force called relational coordination.

Now, my questions are:

• Can Mr. Satar be a good CEO as credible and charismatic as Mr. Kelleher?
• Can they maintain their best aviators and employees, and make the turnover rates to almost zero?
• How deep the government (shareholders) will interfere their business operations?

To learn successfully from Southwest, the key is to adopt organizational practices that support relationships over the long term, between managers and frontline employees, among frontline employees, and with external parties, and to be rigorous about seeking consistency among these practices. One bad apple–or inconsistent practice–really can spoil the whole bunch.

I hope Garuda can be as good and profitable as Southwest in the upcoming years. Amen.

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