It is perhaps the ultimate irony that I’m penning this article from the Air Canada lounge as I prepare to spend two days with the Organizational Culture Group at Southwest Airlines in Dallas.
Southwest Airlines is part of a small group of organizations like Zappos, Patagonia and Four Seasons, whose culture has attained almost mythical status. From the storied antics of their CEO and Founder Herb Kelleher (he once challenged another airline CEO to an arm wrestling match over the use of a catchy slogan, rather than spend months “making lawyers rich”) to the litany of YouTube clips featuring the amazing announcements from their colourful flight attendants, Southwest Airlines is renowned for the passion, enthusiasm and engagement of their staff – from CEO to baggage handler.
Company culture as brand strategy
There are many articles and business books containing lessons on how Southwest has created and sustained its culture, despite operating in one of the most competitive and cutthroat business sectors. While many other airlines have struggled to remain competitive, Southwest has consistently outperformed the category. Some have slashed their loyalty programs (I’m thinking United Airlines and its recently reconfigured MileagePlus program, which is purely about dollars spent). Others have tackled a cacophony of customer outrage on social media (United comes to mind again – dragging a customer off a flight in 2017). Meanwhile, the folks at Southwest Airlines continue to enjoy unprecedented levels of customer loyalty and an NPS score that would have any CMO salivating.
What is missing from the very legitimate accolades that Southwest Airlines has earned for its culture is the acknowledgement that this has been a very deliberate differentiation strategy deployed by the organization from the outset.
The sad fact is that many organizations continue to view culture as some warm and fuzzy, feel-good exercise involving foosball tables, vegan muffins, inspirational posters and trust falls at executive off-sites.
Company culture as customer experience strategy
Pointing to the brilliance of Southwest’s low-cost, hub-and-spoke business model conveniently forgets that, from the outset, Southwest chose to invest in recruiting stand-out, customer-centric employees. People who create a memorable experience that leaves passengers wanting to come back. People with a deep service orientation that, at the time, was a novel concept – especially from a low-cost airline. That rigour in seeking out true, brand-consistent talent is why less than two per cent of applicants for Southwest roles make it through the recruitment process. Herb Kelleher recognized that talent – the culture of an organization – was going to create buzz and excitement around the new airline and organically generate loyal customers without having to rely on a loyalty program. That’s pure marketing genius.
Over the past two years, I’ve had the privilege of interviewing over 40 organizations around the world about culture and digital transformation.
Digital transformation had captured the attention and the wallets of so many organizations and everyone was clamouring to turn legacy bricks and mortar into digitally deployed experiences – ideally on the tiny screen in your hand. Slow and lumbering organizations were hell-bent on becoming always-on, always-agile organizations that saw fail fast as a tattoo-worthy corporate declaration. In a world where CX was the ultimate consumer battleground to drive NPS and CLV, if you weren’t digitally transforming, you were DOA.
What every interview highlighted was that culture, more than any other single factor, was the greatest accelerant or impediment to any transformation, digital or otherwise. Talking to Starbucks, Globant, Tangerine and even Southwest Airlines – organizations that invest consistently in developing their culture – I uncovered their deep struggles to become more digital, and to transform their operations and people into digitally-driven organizations. So, how might organizations fare with less deliberate attention to, and investment in, their cultures?
The sad fact is that many organizations continue to view culture as some warm and fuzzy, feel-good exercise involving foosball tables, vegan muffins, inspirational posters and trust falls at executive off-sites. It’s an exercise often solely left to the HR department without budget or C-level commitment until other, more critical efforts have been completed.
Yet culture is perhaps your most powerful weapon.
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Company culture cannot be copied by competitors
For the CMO, it’s one area of operations that cannot easily be copied. With the barriers to entry getting lower and access to capital getting easier, there are few products and services in any category that can’t be copied, cloned or blatantly stolen in today’s globally connected economy. In reality, your kick-ass mobile application, ballsy retail limited time offer (LTO) or sexy new micro-niche influencer strategy has probably been torn apart, reconstituted and served up by your competitors within 48 hours of launching.
Nobody else has your organizational history, leadership and decision-making capabilities. They don’t have your commitment to seeking, recruiting, training and onboarding talent. Apple and Samsung might both be magnificently successful organizations competing in numerous sectors, but their respective cultures couldn’t be more different. And that’s got nothing to do with being in Palo Alto and Seoul.
For the COO, having a clear, cogent and universally lived culture is the optimal route to operational expediency and organizational clarity. Markets are becoming more connected and consumers more fickle, and avenues to organizational agility are increasingly reliant on complicated supply-chain gymnastics. The ability to have an organization where colleagues can act decisively and are universally aligned on what success looks like – and what delivering that success will require – is nirvana.
If strategy is the engine, culture is the fuel.
This is a shortened version of an article featured in INCITE magazine. Read more.
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