From its beginning, Southwest Airlines faced one challenge after another. Although the Texas Aeronautics Commission approved Southwest's request to fly on February 20, 1968, competitors used legal and political pressure to keep Southwest planes out of the air for three years. Not one to be intimidated, CEO Herb Kelleher fought all the way to the Texas and United States Supreme Courts for the right to be in business (Jackson & Schuler, 2002). In 1971, Southwest began flying four Boeing 737 planes among a select number of cities within the state of Texas. Due to early financial problems, one of those planes had to be sold. The airline industry is a challenging business, and companies have only a limited amount of time to become profitable. Since the Airline Deregulation Act of 1978, many carriers have gone bankrupt due to fierce competition and lower fares. Southwest positioned itself in the market as a low-cost, no-frills carrier with a strong commitment to customer satisfaction. The mission of Southwest is to deliver exemplary customer service with a "sense of warmth, friendliness, individual pride, and Company Spirit." In order to keep costs down and customer satisfaction high, Southwest had to turn planes around with the utmost efficiency and service (Gittell, 2003). With only three planes, company officials needed to keep them filled and flying as much as possible. According to the industry average, planes take 55 minutes from landing to takeoff (Jackson & Schuler, 2002). Crews use this time to unload and load luggage, to clean out and restock the planes, and to fuel and prepare them for the next flight. Southwest wanted to cut this turnaround time to 10 minutes. This would be a formidable challenge. The airline industry has traditionally held one of the highest concentrations of union membership and representation among U.S. corporations (Gittell, 2003). There is a long history of management-labor problems that has led to an adversarial and, at times, contentious relationship between the two. Not only did labor distrust management, different functional roles within Southwest distrusted one another. For example, flight attendants were suspicious of pilots, who were perceived as condescending toward gate agents, who in turn got frustrated with mechanics. So one can imagine that baggage handlers and flight crews would not have been overly enthusiastic about the prospect of 10-minute turnarounds; workers were being asked to work harder with no increase in pay. In order to be successful, Southwest had to create a culture of mutual respect and collaboration, the likes of which had never before been seen in the airline industry. Everyone had to pitch in to get the planes back in the air, even if it was not in their job description. Over time, they were able to turn planes around 50% faster than the industry average. According to Gittell (2003), the primary reason for Southwest's success can be summed up in one word: relationships. More specifically, the company 364 places high value on the relationships between and among its managers, employees, unions, and suppliers. Somehow, Southwest has created a rich, relational environment characterized by a shared vision, shared identity, and mutual respect. In the first half of the 1990s, Southwest was number 1 in on-time arrivals, luggage handling, and customer service for five years running, an accomplishment that is unrivaled in the airline industry. Southwest evaluated performance and set the standard for success with concrete measures such as average turnaround times and customer satisfaction ratings. Not only did the company benefit from a concentrated commitment to performance standards, its customers did as well.

Case Study Discussion Questions

1. How do you get different people from different departments who do not trust one another to work together as a united organization?

2. What are some common reasons why people are suspicious of others and engage in turf battles?

3. What are some of the unique characteristics of Southwest that sets it apart from other airlines?

4. How did Southwest measure performance?

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