Author: James Parker
Publisher: Wharton School Publishing
Year Published: 2007
Buy From Amazon.com
If there’s one company that business authors love to talk about, it’s Southwest, the airline that gets people where they want to go for the lowest fare possible with the best customer service in the industry. The company is known for taking care of its employees and customers while turning profits for 34 straight years, including 2001.
Chances are, you’ve heard the story. Maybe you’re even a loyal Southwest customer and can tell it yourself. Yet no matter who you are, you haven’t heard the story quite the way former Southwest CEO James Parker tells it in his new book, Do The Right Thing.
Parker takes us through the turmoil of Southwest’s history from its early days battling to enter the airline industry (Texas competitor Braniff and Texas International Airlines kept the co-founders in court three years before a single plane took off), to pricing wars and their unique solution (to compete on price, Southwest offered a bottle of premium whiskey to anyone who paid full fare – a strategy that made them so popular that by the mid-1970s, they were the leading liquor distributor in Texas) to the deregulation of the skies with the Airline Deregulation Act of 1978, which allowed Southwest to compete outside of Texas.
From its beginnings, Southwest was always the underdog – yet the company never gave up. They created their own formula for success based on efficiency and customer loyalty that their competitors have yet to match.
This was clearly demonstrated in how Southwest adapted post-9/11. While other airlines laid off workers, filed for bankruptcy or tried to stockpile cash reserves, Southwest remained loyal to its employees by continuing to meet payroll and even paying out their 2000 employee profit-sharing dividend on 9/14 as scheduled. For customers, Southwest offered to refund any advance ticket sales without penalty fees if customers changed their minds about flying during those uncertain times. For those who braved flights, Southwest cut prices and offered bargain fares to encourage people to fly again. Their loyalty paid off when they were the only airline to post a profit in 2001.
Much of Do The Right Thing is told in narrative format, with Parker recounting challenges and fond memories of working with the company for 25 years. For a former CEO of one of America’s most admired companies, Parker is a humble guy with a witty sense of humor. One day, he writes, as he was handing out snacks on a flight, a woman noticed his suit and asked if he was “one of those CEO types.” He jokingly replied that indeed he was the CEO, but he was a lawyer by trade so hopefully that made her think better of him.
About halfway through the book, Parker switches from telling the Southwest story to focusing on the people – and specifically, how you can create a company culture like Southwest’s. The fundamentals include having a mission everyone believes in, hiring great leaders who put others’ successes first, and finding hires that will fit well with the company culture.
While this may sound like basic business advice, Parker’s storytelling illustrates each point in ways that bland statements like “make work fun” can’t convey. For instance, he mentions a lawyer who absolutely knew she had to work for the company when she saw an employee wearing a toe ring – something taboo at her previous firm. Another hire inadvertently caused a bomb scare when she accidentally left a bag unattended while she interviewed for a pilot position. She returned to find that a bomb squad had been called in and had destroyed her breast pump. She handled the difficult (and embarrassing) situation well enough to be offered the position – and her colleagues chipped in to replace the pump.
Do The Right Thing is a quick read, with each chapter representing a core component to Southwest’s philosophy. Parker’s prose is warm and engaging, and he is able to distill complex issues into universal principles that will apply to any business manager.