Southwest Airlines personifies agility. Their business was originally built on the premise of being agile and responsive. When the operation was relatively local, it was easy to implement the extremely lean approach to IT while shifting responsibility for business execution and service quality onto their staff. As Ross et. al. notes in their briefing Working Smarter: The next change management challenge, “constant change can be exhausting, and employees can be forgiven for occasionally wondering when it will be over.” The entrenched focus on people and culture at Southwest is something that made them uniquely capable to implement the technology and process changes they would be challenged to address later as the business grew.
Southwest began as a culture of heroics. As Colleen Barrett, President of Corporate Secretary, notes in the case study, “we say we hire for attitude and we train for skill.” And that attitude was one of going the extra mile to satisfy the customer and deliver world-class service. This approach to recruiting and training ensured that the company maintained strong capability development where top performers were rewarded and low performers were placed on a path of improvement or termination. The company prided itself on being able to board and off-board passengers in ten minutes. Dress was casual for flight staff, and employees were free to do what they felt was right in the moment to keep customers entertained during the flight. This culture of heroics was a positive for Southwest as it made customers feel well taken care of.
However, we now have competing forces entering the picture. In February 2000, Jet Blue began flying between JFK airport in New York and Fort Lauderdale, Florida.1 They offered 24 channels of live satellite television on all flights. [2] This offered customers with unique entertainment options but also raised concerns about the safety of complex in-flight entertainments systems. The 1998 crash of SwissAir Flight 111 was blamed in part by a malfunction in the electrical wiring of the entertainment system. [3] Safety concerns aside, increasing on-board comfort options presented a competitive challenge for Southwest – one that may not be as easy to fix with human-based customer service. In addition, as Southwest expanded, the need to have digital integration with other entities increased.
The strong focus on a single platform differentiated Southwest from its competitors. They ordered one type of plane for their fleet, the Boeing 737. Indeed, cost advantages like this can enable firms to exploit strategic advantages, much like Emirates was able to do by being an early adopter of the Airbus A380 superliner at a time when other airlines were struggling post 9/11. [4] This sort of early adoption can give firms a pricing advantage with discounted parts and priority pricing and delivery on future orders. For Southwest, repeating a similar pattern of single platform within their fleet and applying that to their IT platform would enable Southwest to upgrade from a culture of heroics to an evidence-based management culture. This shift would enable Southwest to increase its strategic agility, and capitalize on new market opportunities as they
arise.
But as Southwest grew its IT capability, it pursued a path very common in budding IT organizations and began to develop customer solutions in silos. This put Southwest at a localizing maturity stage where they were able to respond to requests for changes, something that began to take on importance as employees, beginning in the mid-1990s, felt motivated to offer suggestions for IT improvements. While localizing allowed Southwest to be responsive, it also created situations where multiple versions of databases, schedules and other key operational data were allowed to exist. Customer relations staff had to contend with forty icons on their desktop, each one representing different actions within a larger resolution process; each icon opened up a different system, which addressed a particular pathway in the customer relations issue resolution process.
To support positive working practices already in progress, the first step to standardizing would be to ensure that enterprise functions like B2B sales support, recruiting and retention, and financial reporting are all being managed in a single system like SAP. While this will initially be a costly investment, it will increase trust in system integrity, facilitate future expansion efforts, and ensure process consistency across all locations and business groups. As Southwest looks to improve its solutions capability by offering additional services like international flights, expanded domestic routes and on-board amenities like food and entertainment, having a common platform to manage sales, supply chain and third-party relationships will ensure that data can be shared with external entities by leveraging a common industry format.
To further optimize, Southwest should analyze those components that are common across the industry like flight reservations, security, international flight regulations, and on-boarding of amenities such as food/beverages from well known industry vendors like Sky Chef. There is also an opportunity to ensure that they can upsell in-flight perks in real-time. Again, all of these issues can be solved through a standard system like SAP that has been customized to interface with in-house developed modules that address industry specific processes like flight reservations, revenue from in-flight purchases, and inventory of everything form repair parts for aircraft to headphones and blankets for passengers. As much as possible, the reservation module should serve as the source of record for both back office flight reservation specialists as well website purchases by individual customers.
However, we want to ensure that a modular approach using a standard IT platform based on SAP and a limited number of programming platforms, like Java and HTML/AJAX, does not hinder the company from developing custom solutions as opportunities arise. As Southwest moves into a more evidence-based management culture, they will be able to put in place business intelligence and analytics tools that can measure utilization of key systems and modules, as well as the amount of revenue that flows through those systems thus identifying key areas that can drive efficiencies or increased revenue generation.
As Southwest has grown its routes beyond Texas, it has no doubt had to implement partner relationships with airports and airlines. The company will need to ensure it has both the processes and systems for managing external partner relationship. Formal coordination structures are needed to facilitate a standards-based conversation with external vendors where Southwest’s service offerings can be expanded without compromising its core values or positive brand perception. A common tool like Salesforce.com can reduce IT operating costs by leveraging a cloud based solution while enabling management to track its sales process from lead generation to fulfillment.
Southwest has built a strong culture of service excellence and employee involvement in decision making, which will serve as a positive enabler for change. Business processes will need to be continually refined and analyzed as new opportunities arise. The flexibility to create strategic teams as needed, and to empower them to make the process and technology changes necessary, will ensure that they can quickly mobilize the right business and technology professionals to address new market opportunities. Southwest must ensure that there is a strong tollgate process that identifies high priority projects, promotes transparency without undue bureaucracy, and focuses on agile development where the business and IT collaborate through all steps of a project or process initiative.
Mobile is a frontier where Southwest can build its digital presence and take advantage of well-targeted mobile ads, especially once users have checked in to travel related destinations like airports. This is an area where airline firms have rated poorly in terms of mobile experience [5], and where Southwest could mobilize a team to develop an HTML5 based responsive design [6] that taps into existing backend systems with reservation information and upsell opportunities, and leads the industry in creating an anytime/anywhere consistent experience that can scale to any device.
Article References
[1] Jet Blue Website. Our Company - History. Accessed on Nov 12, 2012 at
http://www.jetblue.com/about/ourcompany/history.aspx.
[2] Jet Blue Website. Our Company -‐ History. Accessed on Nov 12, 2012 at http://www.jetblue.com/about/ourcompany/history.aspx.
[3] Auld, Alison. (2003). Entertainment System contributed to Swissair Crash. Free Republic. Accessed on Nov 12, 2012 at http://www.freerepublic.com/focus/f-‐news/877717/posts
[4] Schreck, Adam. (2009). Emirates May Buy More Airbus A380 Jets. Manufacturing Net. Accessed on Nov 12, 2012 at http://www.manufacturing.net/news/2009/11/emirates-‐may-‐buy-‐more-‐airbus-‐a380-‐jets.
[5] Fox, Linda. (2012). Travel app experience ahead of online equivalent says website study. Tnooz: Talking Travel Tech. Accessed on Nov 12, 2012 at http://www.tnooz.com/2012/07/20/mobile/travel-‐app-‐experience-‐ahead-‐of-‐online-‐equivalent-‐says-‐website-‐study/#PsuRgLLoQVQDv7mu.99
[6] Frost, Brad. (2012). Separate Mobile Website Vs. Responsive Website. Smashing Magazine. Accessed on Nov 12, 2012 at http://mobile.smashingmagazine.com/2012/08/22/separate-‐mobile-‐responsive-website-‐presidential-‐smackdown/.
