Is this the perfect company or what?
From the minute you walk into the Southwest Airlines headquarters in Dallas--past the sand-filled volleyball court out front--you're just about bowled over with positive vibes. Everyone hugs. Herb Kelleher, the madcap, hard-charging, bourbon-swilling stuntman of a president, plants big wet kisses on the lips of his female employees and, sometimes, on those of his male ones. The walls are a family scrapbook, covered with so many photos of happy workers that five craftsmen must labor full time, year-round, just to keep them all in frames. In the lobby, etched into smoked glass like the Ten Commandments, is a tribute to the legend of Southwest Airlines, "nourished by our people's indomitable spirit, boundless energy, immense goodwill and burning desire to excel."
If you've ever flown them, you already know about their distinctive high-altitude high jinks, the flight instructions delivered as stand-up comedy, the welcoming announcements sung to "The Beverly Hillbillies" theme, the zingers about passing your plastic cups to the center aisle "so we can wash them out and use them for the next group of passengers." You won't get a meal or an assigned seat at Southwest's rock-bottom fares--the one-way average is just $62--but don't lump this company in with those other cut-rate airlines. Southwest boasts the youngest fleet and the best safety record in the business, not to mention top rankings from the U.S. Department of Transportation for on-time performance, baggage handling and customer service.
So how do they do it--win such high praise at such low prices and still make gobs of money? Look within the culture. It is Southwest's signature--a living, breathing esprit de corps--the most celebrated ingredient in a recipe for success that has defied the odds for 25 years.
Listening to the kudos, you'd almost think that Southwest was a corporate utopia, such is its blend of merrymaking and moneymaking in an industry beset by turmoil. The 1993 edition of "The 100 Best Companies to Work for in America" hailed Southwest's brio, noting that it may be the "only U.S. company that actually requires a sense of humor." In 1994, Fortune magazine put the Southwest president on the cover, jumping from a trampoline with arms spread in flight, asking: "Is Herb Kelleher America's Best CEO?" Today, his airline is so improbably successful--never a crash, a layoff or a serious labor dispute--that it must host biannual "Culture Days" to accommodate visiting executives who search for its secret as if hunting for the Holy Grail. "They've turned the capitalist system into something that's fun," says Steve Lewins, a Wall Street transportation analyst. "Even Karl Marx would be impressed."
But behind the mirth, there's a beauty queen's gleam to Southwest's smile, a calculated scheme to package and promote its "positively outrageous service." Since the late '80s, Southwest has more than tripled in size, swelling into a $3-billion-a-year behemoth with 22,000 employees in 48 cities coast-to-coast. No longer the scrappy upstart, it has fretted mightily about losing the organic flavor of its culture, about diluting the spunk that once sprang naturally from its audacious beginnings at Dallas' Love Field. As surely as if it was installing a new computer or radar system, Southwest is now on a quest to institutionalize its spirit, a self-conscious defense against the perfidies of growth and age.
It's obvious in just about every slice of Southwest life, from the training center christened "University for People" to the Elvis impersonator who presided over Southwest's "wedding" with Morris Air, the Utah-based carrier it acquired in 1993. New employees are treated to a video of rapping Southwest workers, including a leather-clad Kelleher, who lip-syncs: "My name is Herb/Big Daddy-O/You should all know me/I run this show." A company directory, dubbed "Our Colorful Leaders," features photos of top officers in their zaniest moments, along with childlike Crayola captions saluting everyone who "colors outside the lines." In homage to its 25th anniversary this year (and to the austerity of its in-flight cuisine), Southwest is plastering the country with billboards: "Still nuts after all these years.'
"Their culture is not an accident," says Don Valentine, a former Southwest vice president of marketing and sales. "It was identified and it was developed and it has been managed."