Gary KellySpreading the Luv

Bob Swanson, Chad Agrawal, Kim Hood, Kelly Gangl, Shawn Zeiter, Debbie Crow, Randi Millard, Felecia Henderson

Southwest Airlines Headquartered at Love Field in Dallas, TX Stock Symbol LUV 2013 revenue of $17.7 billion 40 out of 42 years consecutive profits Fleet of nearly 700 planes Not a company of planes, a company of people Purpose: to connect people to what's

important in their lives through friendly, reliable, and low-cost air travel

Who is Gary Kelly? Southwest Airlines CEO since 2004 27-year Southwest employee Life-long Texan Became an accountant because Dad was Attributes success to “tremendous”

support system, mentors, working hard and a “good dose of luck along the way”

Key Values and Philosophy3 Primary operating philosophies:

Pragmatic Intellectual Humanistic

Key Values and PhilosophyPragmatic approach to new situations: Goal and action management Take initiative Plan Seek efficiency

Key Values and Philosophy

Intellectual approach to new situations: Reflect & view abstractly ID themes & build causal maps Pattern recognition

Key Values & Philosophy

Humanistic approach to new situations: Network and solicit input Develop employees Be sensitive to effects on others

Key Values & Philosophy

Gary Kelly POQ scores: Pragmatic 32nd percentile Intellectual 22nd percentile Humanistic 95th percentile

Versus results of 801 MBA students

Key Values & Philosophy

Leadership Styles Pragmatic

Lead by Objectives Intellectual

Coaching Humanistic

The Servant Leader

Leadership Style - PragmaticHabits and Traits

Set high goals; create action plans; execute for results

Make the hard decision; when things go wrong they take the blame; when things go right they give others credit

Not interested in having his own way, but finding the right way

Leadership Style - Pragmatic Advancements and growth Increase number of flights Increase number of employees Increase number of destinations Future international flights Continued low fares No “nickel and dime” costs

Leadership Style - IntellectualHabits and Traits

Employee empowerment is key to success Model the way Assume followers to be partners Develop employees to reach their potential Use their heart as well as their head in

decision making Self starters

Leadership Style - IntellectualEver the Coach Seeks to improve the organization by

working on member’s performance by building long-term capabilities: Empathic Self-aware Willingness to help others

Leadership Style- HumanisticServant Leader

Follows leadership style from founder/former Southwest CEO Herb Kelleher

Builds up the organization His organization makes him successful

Humbly shares success Not interested in being a “hero” leader

Prioritizes sustainability

Leadership Style- Humanistic

“Steady, mild-mannered former accountant. ……..But don't let that fool you.

The new 49-year-old chief executive of Southwest Airlines Co. (LUV) is also

spearheading some of the most aggressive moves that the low-fare

king has made in years.”- Forbes

VisionDoing The Right Thing

Vision Strong desire to excel Live vicariously through the company Be balanced in your focus Care for your people Leadership is a choice People are dependent on credible

leadership

Vision

Vision

“If our people are inspired and motivated

then we are almost invincible.”

Focus on great people, great service, safe flying is sustainable

Focus on profits is not sustainable

Vision Culture is very much about caring Key is listening to employees Leaders should be there because they

want to be Establish ethical standards with good

checks and balances

Fundamental Truth

“It’s always about how people feel.”

Fundamental Truth“Live the Southwest Way”

Take Care of Employees First Highest paid employees in the industry 2011 employees received raises, execs didn’t Stable work environment No layoffs in 42-year history Support system Flexibility Mutual respect Recognition Improvement opportunities

Fundamental Truth“Leaders need to be people-focused.”

Essential skills for the management team Look out for the employees’ well being You just have to care Have a warrior spirit Live by the golden rule Be good humored Be competent

Fundamental Truth

“I can’t fly an airplane.

I can’t fix an airplane.

As a leader, you need your people.”

Fundamental Truth“If our customers don’t want it our employees aren’t going to be for it

either.”

Happy Employees = Happy Customers Employees are family and they are inviting

customers into our house Deliver on promises and expectations Complete dedication to customers

Fundamental Truth“Low Cost Doesn’t Mean Less Service”

Southwest has the “best people, work the hardest and provide the best service”

Company goal - 1 complaint/8 compliments Talk to customers all the time Worst thing we can say to a customer is “we’ve

cancelled your flight”

Fundamental Truth

“What customers really want is friendliness, helpfulness and

someone who cares.”

Fundamental Truth Efficiency

One type of aircraft: Boeing 737 Lower maintenance costs Limited parts Training

Social Responsibility New aircraft emissions Retrofitting older aircraft Routing efficiency

Comparisons with Our Group Group relates to Gary Kelly's humanistic approach

Most of group was high humanistic in the POQ One member matched almost exactly

Two members are high pragmatic Success in difficult financial times can require a

focus on the bottom line Member’s observations of Gary Kelly’s leadership

aligned with their POQ

Comparisons with Our Group

Comparisons with Our Group Group relates to Gary Kelly's humanistic approach

Most of group was high humanistic in the POQ One member matched almost exactly

Two members are high pragmatic Success in difficult financial times can require a

focus on the bottom line Member’s observations of Gary Kelly’s leadership

aligned with their POQ

Key Learnings Success from servant leadership and a humble

style The humanistic tendency can lead to success

Is humanistic approach as effective in non customer-based industries?

How does Southwest track progress? Gary’s humor is part of his success

Rare in business A strong, unique culture based on good values

was the foundation for success for Southwest

Group Experience “Challenge Worth Tackling”

Most really enjoyed the experience All had positive feedback

Most humanistic member doesn’t like the process of virtual teams Prefers face-to-face to assess verbal and non-verbal

Exposure to others’ perspectives and approaches were mentioned as beneficial, eye-opening, and insightful Recognized it as a growth process

Group Experience Group strengths lead to project efficiency,

democratic delegation and leadership based on needs

Statistically the experience increases in difficulty with the increase in group membership

One member enjoyed assessing not only the POQs of the team, but the comments, insights and opinions to create our group feedback to the class

Recap Southwest named ninth on Fortune’s 2014

Most Admirable Company list 20th consecutive year on list Only airline to make the top 10

Questions?