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a Book Review by Big Fat Books 28 Nov 10 enhanced by Peter/CXO Wiz4biz 02/14
Nuts! is a very nice book about the success of SouthWest Airlines. SWA is the pioneer of the low-cost airlines.Their business model has been replicated many times all over the world, but no one has been able to replicate its success. Before I begin, some facts about SouthWest Airlines) –
· Only Airline company to make profits every year since 1973 [40yrs].
· Has never “mass-fired” employees
· Has “never” lost a passenger to accidents
· Always among the highest Customer Satisfaction rating
· Serves double (2x) the number of passengers per employee than the nearest rival. (Its employees are 100% more efficient than other airlines.
Copy Cats. Although many airlines copied SWA business model (sell cheap tickets but keep the planes full and in the air), they were not as successful because no one copied the “root cause” of SWA’s success. SWA are able to achieve this incredible set of figures above because of the following –
Difficult Birth – When SWA began operations in 1970s, the Airline industry was a tightly-controlled sector. Competing airlines filed a suit claiming that 2 airlines are sufficient to cater to the needs of 3 cities SWA wanted to fly to. These 2 airlines also threatened to not hire any employee who has worked for SWA. This resulted in the existing employees of SWA bond together and form a “rebel” group in airline industry. Eventually, the lawsuit was squashed and SWA was allowed to fly.
Family Spirit – Because of the difficult birth, the company employees have a family spirit. The employees really care about each other. [Example: when an employee lost both his arms in an accident, the company founder Herb Kelleher kept him in the company roles, so that he could get a regular salary and medical insurance. The employee’s wife was so moved, that she offered to help the company in whatever role she could help. She began by helping SWA provide the “personal touch” to all employee related stuff. She was so good at it that she was finally retired as HR head.
Hire for Attitude & not for Qualifications. Since rival companies did not hire SWA employees, SWA didn’t have a large pool of talent to hire from. So, they started hiring people from other industries. These new people did not have the baggage of airline industry with them and brought their own fresh thinking. This gave SWA a unique advantage unmatched by other airlines.
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