Herb Kelleher: Manage in Good Times So You'll Do Well in the Bad Times (2006)
gsb.stanford.edu
gsb.stanford.edu
In the case of Southwest they failed to invest in critical infrastructure and probably contingency planning as well. Hindsight is always 20/20, but I am sure there were/are people who knew this was a ticking time bomb.
"This week, with cancellations from other major airlines ranging from none to 2%, Southwest has canceled nearly 10,000 flights as of Wednesday and warned of thousands more Thursday and Friday, according to FlightAware. "
https://apnews.com/article/business-transportation-us-depart...
Those employees could, if not see this coming, at least knew the system was antiquated and brittle. A failure of some magnitude was inevitable. This failure however was so bad that they lost everything. They didn’t know where their own planes were, where their crew was, where baggage was, anything. It was all lost or at least inaccessible for days. The details of how and why the failure happened I am sure will come out, but essentially this was tech debt that the previous CEO saw no value in improving.
Can you share links to the threads you mention?
Herb built up quite a cult, and he was around on the board of directors until 2008. While Gary is a colossal prick what we're seeing is absolutely Herb's legacy. Southwest had already outgrown its reputation as Herb's scrappy little airline by the 2000s. The meltdown is due, in large part, to practices that worked well enough with 90 jets but don't scale to the largest 737 fleet in the world. That lack of automation? That's on Herb, Gary didn't just suddenly decide to walk back a bunch of shit and decree that Southwest employees had to do everything by hand.
American and Delta built out SABRE and Deltamatic in the 60s, United built out Apollo in the early 70s. Under Herb, Southwest basically did everything by hand until they started maybe thinking about buying into the full SABRE suite a couple decades ago. They only just integrated ticketing (with Apollo, SABRE, and Amadeus) in like 2017. Their scheduling (which is the biggest pain point right now) is still done the old-fashioned Herb way. As of 2019 Southwest was still doing load planning manually (a.k.a. counting bags by hand and using assumed weights). Notably this got them in hot water with the FAA.
While things didn't reach a tipping point until Herb died, he did not leave Southwest on the right course. He created a nifty little airline but utterly failed to scale it. The continued lack of investment is on Gary and Bob, of course.
Sounds a lot like the post IPO companies I've worked with where the leadership is still from the startup days..
Is this why you STILL can’t see Southwest prices and book them on Google Flights, HipMunk, Kayak, etc?
https://skift.com/2021/08/06/southwests-expanded-partnership...
Looks like Apollo and Amadeus came in 2020.
https://skift.com/2020/05/19/southwest-airlines-expands-corp...
https://www.businesstravelnews.com/Distribution/Southwest-Go...
So if you use "Kayak for Business" you can book Southwest, otherwise you can click through on the ads that Southwest runs on Kayak. And, yes, it was a deliberate (Herb) choice. So was not being an IATA member and not participating in the IATA clearinghouse. The upside is less overhead the downside is less resiliency. You don't need to care about these things so much when you're flying a regional jet on mostly intra-Texas routes out of an airport that only allows short flights. With a fleet of full-sized airliners, "focus cities" across the country, and an international route network things look a lot different.
https://www.iata.org/en/about/members/airline-list/?search=W...
And now for some industry education. You can participate without being an IATA member. Southwest likely started when they started flying internationally in 2014. You practically can't be an airline with international flights without participating. IATA runs the global clearinghouse.
Notably, IATA does not run the clearinghouse for US domestic (and for foreign airline tickets purchased in the US.) That's ARC (Airline Reporting Corporation.) Southwest is also a member there.
Superficially, I'd think that's because they were too dependent on automation.
Obviously I don't know how to run Southwest better than Herb Kelleher.
They're the mechanical turk of airlines.
It would be awful.
It's because while IT and automation matters, it's not the only thing that matters. The most important thing a CEO can do, especially in this industry, is set culture. That's their greatest role. Culture is far more important than IT.
Herb's positive legacy in this industry is well deserved. This is because Herb set the culture at Southwest, and it's well known that Southwest's employee culture has been--under Herb's leadership--its greatest asset. Herb set it in past crises, such as when they had to sell their fourth airplane to keep the airline afloat, and Herb got the employees to band together to create the 10 minute turn, which allowed them to effectively fly a four plane route network with three planes.
This "band together" culture has saved Southwest's skin countless times. It's what has let them run a highly complex route network of mid-market point to points (vs. hub and spoke) with inferior technology, and yet with good service and competitive reliability.
The problem this time around is that Southwest suffers from the same labor shortage as all other airlines in the industry, and it's this labor shortage that led to their other deficiencies from biting them in the ass. Unfortunately, culture can't solve a crisis when there simply aren't enough people to "band together."
Southwest's IT issues are very well known in the industry, and reports are the current CEO and COO understand and aim to address. This week emphasizes the need, and we can expect SW to embark on a modernization plan. Just remember though, IT modernization takes an enormous amount of time. While we wait the better part of a decade for better scheduling and reservation systems (SW's maintenance system modernization is years and years in and is still ongoing,) SW's current CEO can best spend his time in the trenches of the operation preserving and strengthening culture.
lol, but then why didn't SW run into this huge mess years ago, or decades ago?
https://www.cbsnews.com/news/southwest-airlines-computer-out...
https://www.globaldatavault.com/blog/southwest-airlines-avoi...
Southwest Airlines flights across the country were held up Wednesday while the airline
worked to fix technology problems. … Last October, an outage caused about 800 Southwest flights
to be delayed and forced employees to issue tickets and boarding passes by hand.
Southwest is blaming a faulty router, which it says prompted a widespread network system
failure; a technology crash pegged as the worst in the airline’s history. The reservation
system was knocked offline, planes were grounded across the nation, and the outage took four
full days to resolve.
Southwest Airlines suffered a computer outage early Friday
that temporarily grounded flights across the country, adding
to a string of recent flight woes at the airline..
A nationwide weather data outage disrupted Southwest
Airlines flights Monday night, causing long delays for
some passengers across the country. The company blamed the
problem on issues with Southwest's third-party weather data
provider.
The problem this time around is that Southwest suffers from
the same labor shortage as all other airlines in the industry,
and it's this labor shortage that led to their other
deficiencies from biting them in the ass. Unfortunately,
culture can't solve a crisis when there simply aren't
enough people to "band together."
Speaking of culture, the rugged individualism is absolutely a problem but that's still a Herb thing. Up north Sunwing is having massive operational problems but they were willing to charter planes to aid in recovery.
Recall when Satya Nadella was hailed as Microsoft’s savior only a couple years after becoming CEO? That is how quickly a new leader can have an impact. SW’s network has expanded significantly since Herb Kelleher’s time, it’s hardly his fault its IT can’t keep up.
Is it though?
I'm not saying culture is unimportant, but IT seems pretty damn important to them right now, given the situation, which culture didn't prevent and won't fix.
Would you rather deal with an organization that's 90th percentile in culture and 10th in IT or the other way around?
Obviously being terrible at either will handicap you but a dearth of good culture will probably cause problems long before a dearth of good IT will. IT has less capability to cover for bad culture and process than good culture and process has to cover for bad IT.
Is it possible for a company to be too culture-focused though, where they are so enamored with how great their culture is that they neglect other important aspects of their business?
I also wonder how often a company has a "good" culture overall, but it doesn't extend to IT. With outsourcing, I think you can see that happening, and the rest of the non-IT workers can be oblivious to it.
The airline industry as a whole is known to have antiquated tech and hard to clean data. Someone mentioned in one of the threads last week how difficult it is to modernize these systems where every system is using different timestamp formats. Southwest is just more antiquated and probably at least 5 years behind the rest of the industry in modernizing. Especially with crew systems which is what blew everything up last week.
Eg, unsustainable agriculture, manufacturing, banking…