Key Point: The very first point in the eight “cultural ingredients” or “recipe” I follow to drive a great culture is: People First. Most organizations pretend to believe this, but do not really act that way. They genuinely don’t know what being “People First” really looks like. Too often, it’s about the quarterly share price first (and exec bonuses, of course). These days, customer obsession is competing a little more for first amongst equals. However, very few top leadership teams look at everything through the eyes of what’s best for People First. And I’m not talking about mush headed thinking where People First becomes interpreted as an absence of high performance and great results. It’s quite the opposite actually. One consistent example: Southwest Airlines.
Note the following from Forbes: “Earlier this year, Southwest Airlines announced it would be sharing $586 million in profits with its 54,000 employees – which equates to about a 13.2% average bonus for each employee, or roughly the equivalent of six weeks’ pay. And that doesn’t even count the extra $351 million the company contributed to its employees’ 401(k) plans.
In an era marked by squabbles over the minimum wage and the gap in pay between executives and front-line employees, those numbers stand out. (The company paid out a record $620 million the year before). Is it any wonder that Southwest employees always seem so happy when you’re checking into your flight?
As Gary Kelly, Southwest’s CEO said: ‘Our people-first approach, which has guided our company since it was founded, means when our company does well, our people do really, really well. Our people work incredibly hard and deserve to share in Southwest’s success. Remarkably, it’s the 43rd year in a row that Southwest has shared profits with its people, who also reportedly own about 10% of the company’s shares as well. The airline has also never laid anyone off or cut pay.
The company has long been lauded for its strong workplace culture and engaged workforce – which might also have something to do with getting employees to think and act like owners by sharing the profits of their shared success. (It’s worth noting that Southwest also has a union workforce, which sometimes leads to conflict from time to time.)
Herb Kelleher, the airline’s founder, is quoted in the book, Nuts by Kevin and Jackie Freiberg, about the fact that in 1973 Southwest became the first major airline to introduce profit-sharing to its employees, as saying: Profit-sharing is an expense we want to be as big as possible so our people get a greater reward.’
(If you’re a fan of Podcasts, I’d also recommend listening to Kelleher’s interview with NPR where he talks about the early days of starting his groundbreaking airline).
It really shouldn’t come as a surprise, then, to hear stories about flight attendants picking up trash, gate agents tracking down borrowed staplers, or pilots cutting back on fuel usage precisely because they know that will impact their company’s profits.”
In Canada, WestJet Airlines followed the Southwest cultural and business model to the letter and had similar results for most of its history. Some recent critics suggest that the current leadership has abandoned this People First ethos and the company has clearly become “shareholder first.” Those arguing that there has been a cultural deterioration point out that the pilots of WestJet recently unionized because they no longer trusted the executive team to look at the world through their eyes. Apparently, one example was the implementation of a pilot scheduling software system where pilot efficiency was optimized at the expense to pilots’ well being. I love flying WestJet, and time will tell. You can’t fake “People First” though.
Character Moves:
- Do not pretend you can really create or live in a great culture without a People First strategy. Challenge yourself to learn what the attributes/behaviors of a People First organization looks like. How would you measure that? What companies fits these criteria?
- To be People First, you have to personally lead yourself and others that way. What’s something you’ve done in the last week to prove it?
It’s always People First in The Triangle,
Lorne
One Millennial View: Asking why all organizations don’t commit to a People First culture is a great question. Happier employees should equal better work, right? I too love flying Southwest, and you can definitely tell that they’re sitting at the “cool kids table” at the airport, and well, some other airlines are likely envious of their People First skies.
– Garrett
Edited and published by Garrett Rubis