World-class Operating Efficiency: Don’t be Southwest Airlines
By Donald Cooper
Southwest Airlines has long been the darling of U.S. aviation. Their customers have loved them, and they’ve been consistently profitable when other airlines have struggled. With a flexible ticket policy, two free checked bags, no irritating extra fees and super-chirpy flight attendants, Southwest has been a huge success.
But all that suddenly changed during the ‘great Christmas blizzard’ of 2022 that blanketed much of the United States (not to mention parts of Canada) a few weeks back. Southwest cancelled more than 15,000 flights over a period of one week, stranding about three million customers and losing track of literally millions of pieces of luggage. The media jumped all over them and Southwest went from hero to zero in just a few days. It will cost them hundreds of millions of dollars to recover.
They blamed the weather, but their own staff told a different story. They reported that pilots, flight attendants and front-line counter personnel had told the company for years their systems, processes and supporting software were out-of-date and falling apart. Top management didn’t listen or refused to act. Either way, it was a disaster!
The storm was the surface problem, the catastrophic system failure was the underlying problem, but management incompetence was the real basic problem.
So, don’t be the next Southwest Airlines. Do you have world-class machinery, operating systems and processes, supported by robust and up-to-date software in every part of your business? Without these, you cannot achieve the world-class operating efficiency required in today’s hyper-competitive world of higher wages, increased costs, demanding customers and tighter margins. Any system or software that are more than five years old need looking into.
Here’s an example of a commitment to be world-class. A few years ago, I worked with an extraordinary cabinetry manufacturing business in Kansas. Their factory was so expertly laid out with world-class machinery, technology, processes and people, I was blown away! Wood is a hugely variable and frustrating raw material and yet they had found ways to automate ‘craftmanship’ in a way I thought was impossible.
They have a commitment to be world-class. They listen to their staff and have created a culture of continuous improvement. But they do one additional thing. Every two years they bring the world’s two sharpest production consultants in their industry – all the way from Germany – to their small town in Kansas for two weeks to advise on how to do it even better.
What will be your commitment to world-class operating efficiency in 2023 and who will be in charge of this important project? Make a list of all the systems, processes and supporting software in any part of your business that needs looking at. Get your team involved. Believe me, they know what needs to be on the list. Set a budget for systems improvement. Prioritize and get on with it as soon as possible. Don’t be the next Southwest Airlines.
Here are a few other things to get you thinking or smiling:
Business quote of the week: Offering higher wages and more benefits to marginal job candidates is a formula for disaster! So, your ability to screen candidates and quickly detect non-performers is key. Who is in charge of improving your performance in these two key factors?
Wishing you an extraordinary 2023! If you have an industry or company conference coming up in 2023 where my bottom-line insights on management, marketing and profitability can be helpful, I’m easy to find at firstname.lastname@example.org. The most requested topics are:
- Accelerate Your Business – the ‘straight goods’ on how to sell more, manage smarter, grow your bottom line and have a life.
- Create Your Compelling Service Advantage – how to amaze your customers, differentiate your business and grow your bottom line.
- Winning the Talent Wars – eight essential steps to attracting, developing, leading and engaging a top-performing team.
- Vision Critical – how to manage, innovate and thrive in a very different tomorrow!
- Succession Planning & Exit Strategies – peparing your business and yourself for the most important financial transaction of your life!
Most clients have me deliver two or more sessions or one extended ‘Super Session’ at their event, which makes me very cost-effective in both speaking fee and travel cost, as I take the place of two speakers.
Energy consumption fact. Keeping buildings warm in winter accounts for about 25% of total global energy consumption. Keeping buildings cool in hot climates uses about 10% of total global energy consumption.
Key questions to answer when thinking of selling the business: Much of my coaching is with family-owned businesses in need of a succession and exit plan or businesses that have been passed on to the next-generation and it has become a financial and family mess.
When considering whether to sell the family business, whether to your children or to a third-party buyer ask and honestly answer these simple questions: are they interested; are they capable, or willing to do the work to become capable; and, how will they pay for it?
(And, if there’s more than one kid, do they get along?)
If you’d like to chat about this difficult issue, e-mail me at email@example.com.
That’s it for this week. Stay safe. Live brilliantly!