Category Archives: Leadership

Robert Tannenbaum & Warren Schmidt: Leadership Continuum

Among many types of model of leadership is one that is particularly useful to practical day-to-day managers: situational leadership. And by far the best version of this idea was developed by two UCLA professors, Robert Tannenbaum and Warren Schmidt. Their 1958 article (reprinted in 1973) is one of the most reprinted from Harvard Business Review.

Robert Tannenbaum & Warren Schmidt

Robert Tannenbaum & Warren Schmidt

Robert Tannenbaum

Robert Tannenbaum was born in 1916, in Colorado. He studied at The University of Chicago, gaining an AB in Business Administration in 1937, and his MBA in 1938. The following year, he started his PhD in Industrial Relations also at Chicago, but his studies were interrupted by the war.

After serving as a Lieutenant in the US Navy, he returned to his PhD, which he defended in 1948. From there, he went to teach at the UCLA’s Anderson School of Management, where he remained until his retirement in 1977.

Warren H Schmidt

Warren Schmidt was born in 1920, in Detroit, and took a Bachelor’s degree in Journalism at Wayne State University. He then became ordained as a Lutheran minister.

He changed direction again, and after gaining his PhD in Psychology at Washington University, he went to teach at the University of Southern California and UCLA’s Anderson School of Management, where he met Tannenbaum.

By the by, Schmidt is the first of our Management Thinkers and Doers who has won an Oscar. In 1969, he wrote an Op Ed piece for the LA times, titled ‘Is it Always Right to be Right’. This was well received and turned into a short animated movie, narrated by Orson Welles. It won the Academy Award for Best Short Animated Film in 1970.

The Leadership Behaviours Continuum

In what is regarded as a classic 1958 Harvard Business Review article, ‘How to Choose a Leadership Pattern‘, Robert Tannenbaum and Warren H Schmidt set out a range of leadership behaviours.  They set out seven distinct stages on a continuum, which vary from telling team members their decision, through selling their idea and consulting on the problem, to handing over decision-making.

Tannenbaum & Schmidt - Leadership Behaviour Continuum

Tannenbaum & Schmidt – Leadership Behaviour Continuum
A range of behaviours from the purely authoritarian ‘Manager makes a decision and announces it’ through five intermediate styles, to the most democratic ‘Manager allows group to make a decision’ within appropriate constraints.

Equally valuable is their assessment of how a manager can decide how to lead and choose which of the styles will work best.  They argue you must consider three forces:

  • Forces in the manager
    Your values and style, and your assessment of the risk
  • Forces in the team-members
    Your assessment of their readiness and enthusiasm to assume responsibility
  • Forces in the situation
    Time pressure, the group’s effectiveness, organisational culture

This article is a foundation for what is now known as ‘Situational Leadership, and the two trademarked models developed by Paul Hersey and Kenneth Blanchard.

The Seven Leadership Behaviours

1. Manager makes the decision and announces it
This is a purely authoritarian style of leadership, with no consideration given to other points of view. Most appropriate in a crisis, the manager sets clear instructions and expectations.

2. Manager ‘sells’ their decision
The manager takes  the role of decision-maker but advocates their decision, appealing to  benefits to the group. Valuable when you need the group’s support.

3. Manager presents their decision and invites questions
The manager is still in control, but allows the group to explore the ideas to better understand the decision. The manager answers to their team, without committing to honour their opinions.

4. Manager presents a tentative decision, subject to change
Now the group’s opinions can count. The manager identifies and resolves the problem, but consults their team before making their own decision.

5. Manager presents the problem, gets suggestions and then makes a decision
Still the manager retains ultimate decision-making authority. But now, they share responsibility for finding the solution with the group, who can influence the final decision.

6. Manager defines the limits within which the group makes the decision
Now decision-making sits with the team. The manager defines the problem and sets boundaries within which the group can operate, which may constrain the final decision.

7. Manager allows group to make decision, subject to organisational constraints
The group has as much freedom as the manager is able to grant them. The manager may help the group and again, commits to respect the decision the group arrives at.

For More Information

This model is fully described, with analysis, in The Management Models Pocketbook.

 

GAC RIP 2/5/2010

Vlatka Hlupic: Humanising Management

I am always interested to learn about a new leadership model, so I give you this week’s Management Thinker, Professor Vlatka Hlupic.

Vlatka Hlupic

Vlatka Hlupic

Short Biography

Vlatka Hlupic was born in 1965 and grew up in Croatia. She studied economics at the University of Zagreb, gaining her BSc in 1988, and continuing her studies there with an MSc in Information Systems. She then moved to the London School of Economics, where she completed her PhD in Information Systems in 1993.

From there, Hlupic took up a lectureship at Brunel University, where she remained until 2005, when she moved to her current academic role as Professor of Business and Management at the University of Westminster.

In 2014, Hlupic published her first non-academic book, The Management Shift, in which she documents her thinking.

Vlatka Hlupic’s Six Box Leadership Model

Models of leadership tend to come in three main flavours:

Characteristics models suggest that to be a good leader, you must cultivate certain characteristics in yourself. These could be anything from assertiveness and decisiveness, to friendliness and charm.

Styles based models suggest that effective leadership is a matter of style. A subset are what are called situational leadership models, which suggest that the right style depends on the situation.

Roles based models set about a number of roles that a leader needs to perform. If you can perform them all, to a high standard, then you will lead well.

Of course, nobody would seriously contend that any one of these is sufficient. Clearly a leader has a range of roles to fulfil. And they will do so best when they deploy the right style at the right time, applying the right character traits.

With that context setting out of the way, we can place Vlatka Hlupic’s leadership model clearly as a role based model. Hlupic sets out six roles for leaders to fulfil. Three of them are focused on people and the way a leader addresses those around them, and three are process roles that are concerned with material and abstract elements of an organisation.

Vlatka Hlupic - 6 Box Leadership Model

Vlatka Hlupic – 6 Box Leadership Model

Humanising Management

Hlupic sees the future for organisational success as being about relinquishing a measure of control and focusing on empowering people. This is hardly original. She sets up a Taylorist paradigm as a straw person to tilt at, declaring that an over-controlling management style is demotivating and stifles staff (as did Douglas McGregor and indeed Mary Parker Follett). She advocates treating people with respect and distributing decision-making throughout the organisation.

However, the fact that her consultancy and keynote speaking business is apparently thriving tells us much about industry and governments’ continued failure to grasp these ideas.

What I think makes Hlupic’s work valuable is the suite of tools she has developed, which help her to diagnose strengths and weaknesses and to prescribe practical interventions. These are backed by her academic research.

Five Shifts to Aim for

For a summary of the shifts she advocates, we can take a look at five dichotomies that appear in her work (in my terminology, not hers):

  1. From command and control to trust and empowerment
  2. From rules to principles
  3. From giving instructions to empowering teams
  4. From transactional relationships to alliances
  5. From short term profit motives to serving stakeholders

To me, all of this seems a little like obvious idealism. And yet some of it is swimming against the tide of international affairs, where many Governments are being formed by transactional, narrow interest politicians.

I’d like to think that Hlupic’s research base will finally tip the scales and make some of the changes become commonplace. Perhaps it will. Her latest initiative is an attempt to harness popular sentiment to drive change in large organisations’ cultures. I am interested to see if she will succeed.

 

 

Vlatka Hlupic talking about how reducing control can increase profit

Rensis Likert: Participative Management

Rensis Likert made an important contribution to management in the 1960s, which was to influence many large corporations in the US and Japan. Do you:

a. Strongly Disagree – b. Disagree – c. Neither Agree nor Disagree – d. Agree – e. Strongly Agree

Almost all of us have, at some time, had to use this type of simple perceptual scale. It is called a Likert Scale, after Rensis Likert, who invented it early in his career. But there is more to him than that, as we shall see.

Rensis Likert, 1903 - 1981

Rensis Likert, 1903 – 1981

Short Biography

Rensis Likert was born in 1903, in Cheyenne, Wyoming. In 1922, he went to study Civil Engineering (following his father) at the University of Michigan. However, during a Sociology class in his senior year, he realised he was more interested in people than in things, so switched subject and won his bachelors degree in Sociology and Economics, in 1926. In 1932, he was awarded a PhD for research in the new field of Social Psychology, by Columbia University. As a part of his research he developed a simplified scale for gauging opinions, which bears his name today. His research demonstrated that, despite its simplicity, it was able to achieve equally reliable results, when compared with more sophisticated approaches.

Likert then took on a series of increasingly important roles: lecturer in psychology at New York University, Director of Research at the Life Insurance Agency Management Association, and then  in 1939, he became a Director responsible for surveys at the U.S. Department of Agriculture. Gradually his role in Government surveys expanded, and during the US involvement in the Second World War, he headed up a part of the Office of War Information.

After the war, Government contracted and surveys were no longer mandated by Congress. So Likert, along with his colleagues sought to establish a centre for reseach into surveys at one of the universities. In 1946, they settled at the University of Michigan and founded the Survey Research Center with Likert as its first Director. The centre changed its name in 1949 to the Institute for Social Research (ISR) and has grown and thrived ever since. Likert remained Director until his retirement in 1970, when his co-founder, Angus Campbell, became the second ISR Director.

During the 1950s and 60s, Likert directed his research interest towards management. His 1961 book, New Patterns of Management, proved highly influential. It introduced his four systems of management and articulated his advocacy for ‘System 4‘. He followed this, in 1967, with Human Organization: Its Management and Value. This further detailed System 4, and contains his most widely quoted statement:

‘…the greater the loyalty of the members of a group toward the group, the greater is the motivation among the members to achieve the goals of the group, and the greater is the probability that the group will achieve its goals.’

In 1970, he established his consulting business, Rensis Likert Associates, to capitalise on his thinking, and he also continued to develop and publish his ideas. His 1976 book, New Ways of Managing Conflict, was also very successful.

Rensis Likert died in September 1981.

Likert’s Four Management Systems

Likert articulated four styles of management. We can easily see these as an extension of the Theory X / Theory Y approaches that Douglas McGregor articulated.

Rensis Likert - the Four Systems of Management

Rensis Likert – the Four Systems of Management

The four systems are:

System 1. Exploitative-Authoritative

Decision-making takes place at the top of the organization and these decisions are imposed on others without consultation. There is little sense of teamwork and not much communication, other than threats, which form the primary means of driving performance (motivation). Consequently, it is only upper management who feel any sense of responsibility for the organisation’s goals.

System 2. Benevolent-Authoritative

This is a patriarchal, patronising system based on a master-servant relationship between management and employees. Rewards are the  motivators and teamwork, communication, and a sense of ownership of the organisation’s goals are still minimal.

System 3. Consultative

In this style, managers trust subordinates but not wholly. They motivate with both rewards and involvement, and expect a higher level of responsibility for meeting goals. There is  a moderate amount of teamwork and some communication across and between levels.

System 4. Participative

Participative management is based on trust and confidence in employees. Goals are determined collectively and form a basis for motivation and rewards. This fosters a collective sense of responsibility for meeting company goals, and incentivises collaborative teamwork and open communication.

The Characteristics of Likert’s System 4

Likert felt strongly that System 4 was the optimum system for managing an organisation, as McGregor argued for Theory Y as a means of motivating individuals.

He set out four principal characteristics of successful System 4 management:

  1. Supportive group relationships, both within the group and between the group members and the leader. A sense of care and collaboration.
  2. Each person’s individual contribution, needs, value, and development needs to be equally respected.
  3. The group undertakes problem solving together, and aligns behind their eventual consensus solution.
  4. Different groups overlap, with certain individuals playing the role of ‘linking pin’ between them. These are people whom Karen Stephenson refers to as ‘Gatekeepers’.

This all has a very modern feel to it and it is hard to feel the sense of novelty Likert’s ideas had in the 1960s. This, I suggest, is a measure of the importance of Likert’s ideas. So I choose Option e. Strongly Agree.

Sylvia Ann Hewlett: Diverse Talent

In my naiveté, I have always thought the arguments for diversity were self-evident. One look at the politics of any nation, and of the world as a whole, is enough to prove that this is clearly not the case. So we must be grateful to people like Sylvia Ann Hewlett, who are making the case. Here is a woman who has established a research centre, writes extensively, consults with global corporations, and speaks out in the media.

Sylvia Ann Hewlett

Sylvia Ann Hewlett

Short Biography

Sylvia Ann Hewlett was born in 1946 and grew up in South Wales. She took her MA at Cambridge University and then went to Harvard as a Kennedy Scholar. She returned to the UK to study economics at the University of London, where she earned her PhD.

Hewlett returned to the United States, becoming an Assistant Professor of Economics at Barnard College. From there, she went on to become Head of the United Nations Economic Policy Council.

In 1987, Hewlett quit the role and started writing, which she has continued steadily. She has authored a number of books, and many articles in premium magazines and online journals. In 1993, she founded the Center for Work-Life Policy in New York. This is a not-for-proft research institute, which studies diversity and talent management. It is now called The Center for Talent Innovation, and its work has been widely published, particularly in the Harvard Business Review.

Hewlett followed this up by creating a commercial business, now called Hewlett Consulting Partners, which works with large corporations to implement ideas around diversity and talent management.

Hewlett’s Two Big Themes

There are two big themes in Hewlett’s work:

  1. the value of diversity in driving good quality decision-making, and supporting long-term growth
  2. how people who do not fit the current unpublished template their employers have for successful executives can cut through and succeed

Early in her career as an author and thinker on these matters, Hewlett’s primary focus was on gender. More recently, she has opened this out into many dimensions of diversity , such as geography, culture and ethnicity, sexual orientation, and generation. Indeed, in today’s (autumn 2016, ahead of the presidential election) United States, it is not surprising to find a lot of her public comment focusing on the role of Latino workers, and also women of colour and the LGBT community.

Her most recent publication, a research volume published by The Center for Talent Innovation called ‘Growing Global Executives‘ argues that leaders need two core competencies:

  1. the ability to project a leadership presence that can establish credibility with their boards and their stakeholders, and
  2. the ability to harness the value of globally dispersed and culturally diverse teams by developing an inclusive style of leadership.

Executive Presence

One of Hewlett’s recent books is 2014’s ‘Executive Presence‘, which I suspect is her biggest seller. Aimed primarily at women, but valuable for anyone who wants to be seen as a potential or actual leader, the book sets out three elements you need, to project ‘presence’. These, Hewlett suggests, are all learnable.

Filled with anecdote and structured checklists, this is one of the stronger books on a topic that is hard to pin down with real evidence. At what stage does a large body of anecdote become empirical data? I shan’t answer that question.

Hewlett’s three elements of Executive Presence are:

  1. How you act (Gravitas)
  2. How you Speak (Communication)
  3. How you look (Appearance)

The books reports wide surveys of executives, that give evidence for what makes up these three overlapping dimensions. Curiously, a critique of the research is its bias towards US culture.

Gravitas, for example, is made up of:

  • confidence
  • decisiveness
  • integrity
  • empathy
  • reputation
  • vision

Fundamentally, it is your ability to be seen and valued as a real expert in your subject matter.

Sylvia Ann Hewlett Speaking about Executive Presence

Daniel Goleman: Emotional Intelligence

Daniel Goleman is a psychologist and journalist who catalysed a significant shift in the way we see human potential and capabilities – not just at work. It is not as though we did not know about the importance of our emotional response. Nor was the work he described his own. But his combination of timing, accessible writing, and psychological training made his  book, Emotional Intelligence, a stand-out best seller that started a revolution in management and leadership training.

Daniel Goleman

Short Biography

Daniel Goleman was born in 1946 and grew up in California. He went to Amherst College, Massachusetts, but spent much of his study time closer to home, at University of California, Berkeley. He majored in Anthropology, and graduated Cum Laude, winning a scholarship to study Clinical Psychology at Harvard.

There, Goleman’s mentor was David McClelland, whom he quotes in his writings. His doctoral dissertation was on meditation as a treatment for stress. He travelled to India to study ancient psychological knowledge and returned after his PhD, where further research resulted in his first book, The Meditative Mind: The Varieties of Meditative Experience, summarising his research on meditation.

After a spell as a visiting lecturer at Harvard, teaching the psychology of consciousness, Goleman was invited to write as a journalist for Psychology Today, and found he liked writing. In 1984, he moved to the New York Times on the science editorial staff, covering psychology. While he was there, he realised that many of the stories and research he was covering came together in his mind and demanded a deeper treatment than his journalism would allow. From that, came his massive 1995 best-seller, Emotional Intelligence: Why it Can Matter More Than IQ.

This ignited a huge interest in the public, and also, to Goleman’s surprise, in the business world. It led him to write Working with Emotional Intelligence (1998) and also one of the most reprinted ever of Harvard Business Review’s articles, ‘What makes a leader?’ Finding this a fertile area, and having left the New York Times, Goleman then collaborated with former Harvard Grad student colleague Richard Boyatzis, and Boyatzis’ former student Annie McKee, to write The New Leaders: Transforming the Art of Leadership (published in the US as: Primal Leadership: Unleashing the Power of Emotional Intelligence).

Pocketblog has already covered Emotional Intelligence in earlier articles. What Goleman has given us, in summary, are a five-fold emotional intelligence framework (in Emotional Intelligence), an inventory of 25 emotional competencies (in Working with Emotional Intelligence), and six leadership styles (in The New Leaders).

For a first rate primer on the topic, you may enjoy The Emotional Intelligence Pocketbook.

Goleman’s more recent work

Goleman’s actively curious mind continues to synthesise and create ideas. Having established links with the Dalai Lama, his 1997 book Healing Emotions: Conversations with the Dalai Lama on Mindfulness, Emotions and Health was followed in 2004 by Destructive Emotions: A Scientific Dialogue with the Dalai Lama.

His other books include:

Focus

Goleman’s thesis in Focus: The Hidden Driver of Excellence is simple: to succeed in a busier, more complex world, we need to focus our attention. Variously seen as groundbreaking and disappointing, insightful or just pop psychology, there is no doubt that, in Focus, Goleman is really returning to his roots.

As a grad student, he started to ask what ancient wisdom could teach us about human psychology. In Focus, he alights on one valuable lesson: focus. I think it no coincidence that, when asked what the secret is to their great success, both Warren Buffett and Bill Gates have each cited one answer: the ability to focus on one thing at a time.

Whatever you think of the way this book is written, it is, without doubt, a message to hear.

Why aren’t we More Compassionate?

Daniel Goleman at TED, in 2007.

 

Liz Wiseman: Multiplier Effect

Liz Wiseman is a former senior executive at the Oracle Corporation, where she ran their Oracle University. There, she became interested in leadership development and has, since leaving and setting up her own business, taken up a research-based approach. Her research into why some leaders seem to get the best from the people around them, while others equally shut down contributions, led to the powerful idea of Multipliers and Diminishers, and two best-selling books.

Liz Wiseman

Very short biography

Liz Wiseman was born and grew up in the San Francisco Bay area. She attended Brigham Young University, studying Business Management and getting her bachelors degree in 1986, followed by a master’s degree in Organizational Behaviour, in 1988. From there, she joined Oracle, where she stayed for 17 years, becoming a Vice President with responsibility for leading the Oracle University.

Wiseman left Oracle in 2005, to found her own leadership consulting business. She is currently president of The Wiseman Group (formerly known as Mindshare Learning). She cites CK Prahalad as her career mentor.

She has written three books, most notably Multipliers: How the Best Leaders Make Everyone Smarter (2010 – with Greg McKeown), which was followed in 2013 by The Multiplier Effect: Tapping the Genius Inside Our Schools. Her most recent book, Rookie Smarts: Why Learning Beats Knowing in the New Game of Work (2014), introduces another interesting new idea about leadership.

The Multiplier Effect

Wiseman’s big idea, which she researched with British consultant Greg McKeown, is that some leaders seem to get vastly more from the people around them than others. She calls them Multipliers. She made this observation while at Oracle and then researched just what it is that they do differently from otherwise equally intelligent leaders, who seem to suppress the contributions of others. She calls those Diminishers.

Multipliers are able to access the intelligence of the people around them and somehow grow that intellect, making them feel (and maybe become) smarter still. They ask questions and make challenges in much the same way as Bernard Bass referred to in one of his four dimensions of Transformational Leadership: Intellectual Stimulation. They seem to see more capabilities than  other leaders and therefore make bigger asks of people.

By multiplying the intelligence of your people, Multipliers have a disproportionately positive effect on your business. They can harness under-utilised capacity of busy but bored people, by expecting more and giving them the opportunity to deliver it.

Wiseman identifies five characteristics of Multipliers, and six skills that allow those characteristics to blossom.

Multipliers are Talent Magnets

This is almost the definition of a Multiplier. They seek out and attract people with ideas and talent, and draw their genius from them.

Multipliers are Liberators

They create the kinds of environments that free people up to do their best work and contribute their most innovative and critical thinking.

Multipliers are Challengers

They are able to define a challenge or opportunity and set people the responsibility to excel themselves and meet it. This way, they get the very best from their people.

Multipliers are Debate Makers

They can drive sound decision-making by creating rigorous evaluation and thorough debate. They encourage people to apply all their intellect fearlessly by caring more about the quality of discussion, than about personal gain or loss – we all win when we make a good choice together.

Multipliers are Investors

They invest in other people’s development and growth, and allow people to feel ownership for their careers and the results they achieve.

The Six Skills

The six skills that Wiseman teaches are:

  1. Asking questions that spark innovation and intelligence
  2. Creating debate that drives the best decisions
  3. Identifying and utilizing genius in others
  4. Creating space for others to think and contribute
  5. Transferring ownership and accountability for results
  6. Generating learning from mistakes

Rookie Smarts

It is worth briefly discussing Wiseman’s other big idea, captured in her 2014 book, Rookie Smarts: Why Learning Beats Knowing in the New Game of Work. Even more so than her Multiplier Effect, this reminds us powerfully of the work of Carol Dweck on Growth Mindset.

The idea behind Rookie Smarts is simple: new people in an organisation bring a freshness and energy with them. They question the absurd and want to change things because , as an outsider, they have no allegiance to the ways of the past.

Long-serving leaders, on the other hand, easily get trapped into a mindset of ‘that’s the way we do things around here’ , and consequently lose their passion for change and drive to innovate.

What Wiseman advocates is that we ignite our curiosity, fire-up our energy, and become Perpetual Rookies. She says that:

‘Learning beats knowing’

and in so doing, she echoes precisely the principle of the Growth Mindset.

Liz Wiseman in her own words

The 2-minute intro…

And a longer 16 minute talk…

Herb Kelleher: Employees First

Herb Kelleher was for many years one of the most innovative, unorthodox, and successful corporate executives. He delivered profits to an airline business every year of 20 years as CEO, in an industry where other airlines could not manage 5 years of profits, and he did so by sticking to a simple mission and placing values first. But the whacky reputation of Southwest Airlines, which he co-founded, belies the clear-sightedness of its long-time CEO.

Herb Kelleher

Short Biography

Herb Kelleher was born in 1931, in New Jersey. He studied English and Philosophy at Wesleyan University, before going on to study law at New York University, from where he graduated in 1956. He spent a couple of years clerking for the New York Supreme Court, and another couple at a Newark Law firm, before moving to Texas, from where his wife had come.

In 1961, he set up a law firm in San Antonio, where one of his clients was Rollin King, who owned a small airplane charter business. One evening in 1966, over drinks, King outlined an idea for a different kind of airline, which would serve the main three Texas cities, with point-to-point services, rather than scheduling to meet international hub flights. Famously, they sketched a schedule on a bar napkin, for flights between Dallas, Houston, and San Antonio. Kelleher was sold on the idea and invested $10,000 for a 1.8 per cent stake.

As Chief Legal Counsel, Kelleher led the acrimonious legal battles to secure the licences and slots that Southwest would need, to fly. This led to court cases all the way up to the Texas supreme court, but in 1971, the company started trading under experienced airline CEO, Lamar Muse. It took three years to become profitable.

In 1978, Muse resigned, and lawyer Kelleher was appointed president, and then CEO four years later. This inspired appointment led to phenomenal growth for the business – in both monetary and reputation terms. Kelleher built Southwest into a widely admired business, which many have tried to emulate (rarely successfully). The figures speak for themselves.

1982, Kelleher becomes CEO

  • Airplanes: 27
  • Staff: 2,000
  • Revenue: $270 million

2001, Kelleher retires as CEO

  • Airplanes: 344
  • Staff: 30,000
  • Revenue: $5,000 million

Kelleher retired as CEO in 2001, and as Chairman of the Board in 2005. He remains a prominent and outspoken contributor to US business life.

Kelleher’s Secret

Kelleher’s secret is far from being secret: it is plain to see for anyone who observes the Southwest Airlines business (and there have been countless business school case studies), and Kelleher has spoken of it many times.

Put simply, Kelleher adopted the attitude of:

Employees first; customers second; shareholders third

Compare that with the behaviour of most corporations and you will see it is exactly the ‘wrong way round’. Yet it has worked phenomenally well. And if you say that there are many who do espouse this sequence of priorities, I’d agree. But the truth is, very few truly (I mean TRULY) do the ’employees first’ thing, and do it properly.

However, this is not the first time we have encountered the ’employees first’ philosophy at Pocketblog: take a look at this post about Vineet Nayar, from 2010.

Stick to the Mission

Kelleher was always determined to stick to the mission of the company – they never did anything that was outside of the airline industry, nor indeed outside of the confines of a point to point US service. Sticking to what you know and do well, can be a powerful way to stay focused and deliver stability and excellence.

And Kelleher stuck to his philosophy of what his business aimed to do, which he articulated as being about happy customers and low costs. This led to a no-frills service that focused hard on keeping costs low, and a business that became famed for its customer care. He achieved both by a fierce loyalty to his staff, which they reciprocated.  This is manifest in two particular ways.

Serious Fun

Kelleher has a love of fun and practical jokes, that means he rarely takes himself seriously. He has been see in Elvis costume, on a Harley Davidson, and has arm wrestled another CEO for the right to use a disputed marketing slogan (and lost).

His staff took his lead and Southwest is famous for on-board pranks, and singing flight attendants. Some of the in-flight announcements have gone viral on social media because of their wit or novelty. Yet all their staff do take their jobs seriously and the airline has never had an in-air fatality.

Staff Care

Kelleher’s commitment to staff care has meant that Southwest has ridden out the peaks and troughs of a particularly volatile industry without ever laying off any staff nor even imposing furloughs (compulsory leave of absence to save the company money). Instead, they have taken numerous hits on short-term profit. The result has been enviable staff loyalty (with among the lowest turnover rates in the industry) and exceptional productivity. Putting staff interests ahead of shareholder returns has, paradoxically, maximised shareholder returns over the long term.

So,what do we learn?

  1. Unorthodox works
  2. … but only when done with the integrity to stick to your values.
  3. Low costs and customer care deliver profits
  4. … especially when your employees share your commitment to both
  5. Exceptional culture delivers great results
  6. … but you need to set the tone, deliver on values, and get out of the way, as a leader.

‘The Business of Business is People; Yesterday, Today, and Forever’
Herb Kelleher in his own words