Compass Cross-check

A Check on the Middle Segment of the Pyramid of Purpose and Value

By Manuel Palachuk

As I’m writing my book Getting To The Next Level and rounding out the chapter on this thing I call the organization Compass, I put together an anecdote to help drive home the importance of getting it right. Besides being a sneak peek at more of the book before it releases, it’s a great compass cross-check everyone should read. Here it is:

In my book Getting To The Next Level, I cover a lot of ground in the discussion of the Compass segment of the Pyramid of Purpose and Value. I try to make it clear how the three levels - Products and Services, Target Market, and Operating Systems - combine to determine the direction in which the organization is going. They make up the compass and point where we are going as an organization. They determine who we will partner with and who we will build our relationships with.

Everything about the levels in this segment has been carefully designed to support every level above it in addition to the segment itself supporting the segment above it. The Operating Systems are very specifically selected to effectively create and deliver our products and services to the Target Market. The Target Market is carefully selected based on the Products and Services we intend to offer. The Products and Services we have selected are in line with and therefore support the Human Element and so on up the levels all the way to the top. This entire Compass segment is here to support the segment above it, our organization’s Culture. If anything in this level falters or fails, it will shake the foundation of the Culture segment above it and could have lasting effects on every level in that segment. I’ll give an example of how this happens shortly.

As the design of our pyramid progresses, we will see with the discussion of the bottom segment that the levels in that segment - Resources, Performance Measures, and Roadmap & Strategy - must also be aligned properly or we will get off course. If the Blueprint for Success segment is not properly designed and we are not effectively supporting the organization’s Compass, we can certainly do business but at nowhere near the level we intend to and with nowhere near the competitive advantage we intend to create and leverage.

Pyramid of Purpose and Value

To demonstrate how the failure in the lower levels of the Compass segment can shake if not topple an entire organization, I present the IT infrastructure failure that occurred at Southwest Airlines in July 2016. Southwest Airlines posted on their blog, “Southwest Airlines began experiencing intermittent performance issues earlier this afternoon with multiple technology systems as a result of an outage.” Starting at the failure date of July 20, 2016, Southwest reportedly cancelled some 2,300 flights over the next 4 days with more than 8,000 delays. The end result was arguably one of the worst infrastructure failures of any airline to date and certainly the worst for Southwest. The blame was put squarely on a critical piece of information technology called a router.

In the 2003 book The Southwest Airlines Way, author Jody Hoffer Gittell begins her book with a short list of accolades about Southwest including how it’s been profitable for 31 years consecutively while their competition was struggling to stack more than four or five years in a row. She mentions how Fortune magazine listed Soutwest as one of the “100 best companies to work for in America” and how Fortune 500 also names Southwest as “the most successful airline in history”. Gittell’s book is all about unlocking the secret sauce of Southwest Airlines, and it does a fine job of doing so with highlights on their LUV culture and their unique communications coupled with what she refers to as “High Performance Relationships”.

The LUV culture refers to a place and time back when Southwest was a small central carrier based in Love Field Texas (Airport code LUV) and their early culture. Today, their top Values are: Live the Southwest Way, Warrior Spirit, Servant’s Heart, and Fun-LUVing Attitude. There are more than a dozen books on the subject of Southwest Airlines and what made them special and how they got to the top. Some focus on Chairman Herb Kelleher but all delve deeply into the most powerful driver, the company culture. The point being, Southwest went stratospheric and it is largely attributed to their culture and how they bound the organization together cohesively to execute on a brilliant strategy over time to become number one.

Southwest’s strategy is not always the focus of their story because somehow it is always outshined by the reality that great strategy is powerful but without the vision, mission, values, and everything on down the pyramid in place, you won’t actually get anywhere. Strategy can also become a complex discussion and people tend to look for the one golden nugget to take away. And let’s face it, a great company culture is more fun to talk about. But their strategy is central to this discussion because we need to look at Southwest’s chosen direction for their services, target market, and operating systems.

To highlight one primary focus that Southwest identified would lead to a significant competitive advantage, I’ll point out how they set about shortening the turn times for their airplanes. They knew that if the plane was sitting on the ground, not flying, they were losing money. If they could slice five minutes off the turn time (time to de-plane passengers and load up again), they could multiply this by the number of flights in a given day. And shaving hours a day off the entire trip time meant a measurable increase in efficiency. But what does a strategic objective like this require to be successful? Operating Systems.

In the 1990s when Southwest was building out their information technology infrastructure and cultivating what would be the Operating Systems they use to deliver their services and support their customers, there was a simultaneous surge in high technology which made it all conveniently possible. The internet as we know it now was very new but Southwest learned to leverage it as did every other airline. As time moved on, Southwest’s Operating Systems and infrastructure grew to meet their increasing demands. And today, their systems are a conglomeration of new and legacy systems. Legacy systems are those that may be less-than-modern but are relied upon heavily and are not so easily replaced or revamped.

On July 20, 2016, the day of the Southwest meltdown, I was talking with one of my close friends who had spent nearly a dozen hours stranded at his home airport waiting for a flight to get to the event we were both attending. When he finally showed up, he had no luggage and for the next few days, it seemed he was constantly on the phone trying to get his return flight booked and find his luggage. He shared several firsthand anecdotes of extremely irate Southwest customers’ interactions with extremely stressed and pressured Southwest agents and employees. He told of irrational passengers blowing up in anger and expecting miracles. Customers who really don’t quite understand how complex these systems can be and how little control anyone standing at a keyboard really has.

Of all of this, what made me feel most sad was not the story of the customer in line who really doesn’t understand these complex systems, but the story of a Southwest agent losing their composure. Granted, it occurred after more than fifteen hours of downed systems and probably hundreds of irate passengers and untold issues related to the cascading problems started by the downed system. To be crystal clear, it’s not about any airline agent losing it, it’s about a Southwest agent losing it. I have in fact flown hundreds of thousands of miles in my life and a good majority on Southwest. I am familiar with their culture and I’ve experienced it firsthand. My perception of their people and their customer service is high, extremely high.

I felt worse for the agent than the customer. I felt that if Southwest agents are stressed to this level, you have in fact pushed them to some serious extremes. I can only tell you that I do not have the same respect or expectations for customer service from any other airline as I do Southwest. It’s only after hundreds of flights and thousands of miles of service that you feel like you are part of their family. It’s not unheard of to rattle a Southwest agent but in my experience, when put to the test, they will far outshine those of any other airline by far. Why do I say this, why do I believe this? Because they have proven it over time and their reputation shows it. Their secondary Values statement is: Work the Southwest Way - Safety and Reliability - Friendly Customer Service - Low Costs. Southwest’s infrastructure failed and their employees banded together, tapped into the reserves of their powerful culture, and held together. But there were casualties on the inside and the outside.

I have no real concern for exactly why the Southwest system went down, what I am concerned with is how their Operating Systems could become so stressed as to ever fail to this extent when their entire Purpose is, as prominently stated on their website, to “Connect People to what’s important in their lives through friendly, reliable, and low-cost air travel.” Southwest places their Purpose above their Vision, Values, and Mission on their website. If your primary offering is air travel and to be the best in the industry at delivering it requires the highest efficiency and reliability, your operating System had better be in line with this goal.

In a Dallas News interview with Southwest company CEO Gary Kelly on July 30, 2016, he was quoted as saying, “We were at a dead start when I got here in the 1980s. There was virtually no technology, and then the technology we added in the 1990s was very immature.” My personal opinion is that somewhere along the way as Southwest grew and moved forward, they relied too heavily on the technology without recognizing its significance in their business. The technology they employ as a central component of their Operating Systems was not given proper consideration relative to their stated purpose. Kelly did in fact clearly recognize the hit that Southwest’s image took, stating, “There’s no lingering effect of that event other than the way people feel,” and, “We’re mainly focused on winning back our customers that we didn’t serve well, we care about that.”

In the end, there is only the failure of the inadequate Operating Systems of Southwest that should have been supporting the delivery of the value proposition to their target market. It will in fact change the course of Southwest as well as their Compass direction. Kelly also stated in the Dallas News interview, “This happened. We have to do everything we can to understand it and prevent it from ever happening again.” And he’s right, but my question is still this - How do you grow the second largest airline in the world and overlook the Operating Systems that support it?

Southwest’s failure of a critical component in their Operating Systems shook the Compass of that organization, and they must reset their heading and press on. The shudder of their Compass shook the Culture of the organization and tested it. What is the price they will pay, what is the toll? For their organization, the shudder of this event was felt all the way to the top. Their stated Vision is: To become the world’s most loved, most flown, and most profitable airline. They took a hit on their profits, they lost some trust which loses them some flights, and they lost some LUV. A lesser airline could lose significant market share with an event like this. If we were in the middle of an economic downturn, it could have even possibly cost them their entire business.

In the long run, I believe that Southwest will be okay, I believe they will recover and be just fine. Why? Because they have a mission that is worth pursuing. “The mission of Southwest Airlines is dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit.” This coupled with their shared vision, values, and purpose has seen them through some rough times, including the terrorist attacks on the U.S. in 2001 and the economic downturns of 2000 and 2009. Resiliency comes from a solid Culture built out of a compelling Vision, Mission, and Values. In the end, The Compass segment of the pyramid must support the Culture segment, but if the Culture is solid it’s not just going to crumble so easily.

This section of the chapter is a draft and therefore it may not be publicized in its entirety. I guess you’ll have to buy the book to read the rest. 🙂

If you’d like to preorder your copy, visit https://gttnl.com/.