Describe about the Leadership and Governance for Southwest Airlines.
Southwest Airlines is an established company that has able to attain a leadership position in the highly competitive market. High level planning is difficult and dangerous for major corporate entities. The sheer size of the organization and numbers of variables to be evaluated makes planning demanding and punishes poor groundwork. The danger of becoming overconfident during periods of prosperity and growth can inhibit contingency planning. Also, the best strategic plans need tactics to implement them before they can be successful (Daft, 2013). Heskett & Sasser give an example of strategic planning over time with their case study of Southwest Airlines (2013). From the beginning as a small company to their dominance of the US domestic airline market 30 years later the authors track how they maintained their vision and transformed their strategy to remain distinctive while they experienced year-over-year growth. Based on the case study the major challenges of strategic planning, especially for large, complex organizations like Southwest airlines include increasing competition from other organizations, this led to the sale of a plane to cover costs in the first year (Heskett & Sasser, 2013). There were also challenges with security as a result of 9/11, cost reduction, the status quo and technology (Heskett & Sasser, 2013).
At any point of time, there would be number of projects running for Southwest Airlines. It is important that the leaders and the managers of Southwest Airlines should have a deep understanding of different projects in the organization. The leaders would have a key role to take the organization forward and it can happen only when the company has effective governance structure in place (Baillien, 2009).
The key elements of leadership and governance for Southwest Airlines can be shown as:
Current project governance and leadership approaches
The leaders of Southwest Airlines have a project governance structure to support strategic planning in the organization. Strategic planning is crucial to organizational development and long-term success. It refers to the ability to see the bigger picture and strategize a plan that takes into consideration external factors, environmental factors and focuses on the organization’s ability to achieve their goals. When strategizing, the focus is largely on the value that can be offered to the customer (Daft, 2013). There are three levels of strategic planning that when broken down will assist individuals focus where they are and where their time and efforts are most effective:
- Corporate level- What business are we in?
- Business level – How do we compete?
- Functional level- How can we support the business level strategic plan?
New governance and Leadership approaches
The new governance and leadership approaches for Southwest Airlines can be discussed as below:
Zilberg (2013) suggest Boards serve a dual function; setting policy and providing leadership with flexibility for the operations of an organization. Moreover, Zilberg (2013) suggest Boards have the final and ultimate authority in respect to decision-making for all aspects of the organization. Kiel and Nicholson (2005) use the of four broad governance categories to illustrate why Enron and Hollinger International failed; strategic failure; control failure; ethical failure; interpersonal relationship failures. Moreover, Kiel and Nicholson (2005) suggest Board evaluations provide a process to identify concerns prior to reaching a crisis point for the purpose of promoting discussions and possible resolutions where having the proper framework will be imperative within complex environments.
Downe, Cowell, and Morgan, (2016) observed when evaluating failure, the mechanisms for evaluating discipline disappeared when organizations had a large number of independent councilors further noting the failure to act on issues can become problematic thus forcing organizations to promote the presence of sub-climates and weakening the ethical climate overall within the organization.
According to Aileron (2016), portfolio management is the process of looking at all of the things an organization could do and narrowing it down to what could be done successfully assisting in the determination of where to allocate resources, time, capital. The articles describes five key areas to focus on when strategically planning in any organization:
Determine where you are- to gain an accurate picture of where your organization is actually at it is helpful to bring in an outside consultant that will provide an honest view point of where the organization is compared to where you thought it was or would want it to be (Kuvaas, 2010).
Identify what is really important- utilizing the mission and the vision of the organization determine where you are going and if you are truly focused on the areas that were once identified as crucial and meaningful.
Define what you must achieve- clearly identify objects and focus on them in the priority determined.
Determine who is accountable- the mission, vision, objectives and plans are in place and now it is time to allocate resources, set clear expectations, and ensure individuals are held to their expectations.
Review, review, review- hold regular meetings to ensure the plan stays the course and the objectives are still being met as determined previously. The review period is never over (Aileron, 2016).
It can be said that Program management is key to success. The worst thing that you can do is to make spur of the moment decisions. Careful plan keeps you from avoiding costly mistakes. SWA (Southwest Airlines) had a vision, which paid off. At a time when airlines were going out of business, they took a chance by investing in an idea that was unique to the airline industry. In my opinion, SWA (Southwest Airlines) stands above other airlines because of their willingness to cut their prices, and remain simple. In value proposition element many factors can be seen in this case: the airline emphasized on recruiting agents and staff with positive personalities. Also, it focused on a “culture Committee”, took into consideration all of the employees ideas, and engaged in teamwork commitments (Heskett & Sasser, 2013). One of the Value proposition elements is “Sold 737 Boeing Jets at remarkably below asking price, as a way to start a bold business relationships between Boeing and SWA” (Heskett & Sasser, 2013). One of the Destination point element is “The 10 minute turnaround time from gate arrival at the gate to push back was barely one-fifth the average of competitors” minimizing the turnaround time (Heskett & Sasser, 2013).
Linking of corporate and project strategies
Many factors challenged the implementation of the strategic planning process, such as increase competition from other airline due to the change in market, providing lower fare prices, rise in the cost, and many changes in the customers’ requests and accommodations. The company wasn’t able to maintain the 10 mn turnaround, due to the increase in seat and suitcases. Multiple outside factors that challenged portfolio and program management such as selling one of the organizations in one site in order to continue to stay in business, and a four-year lawsuit brought by competitors in order to prevent the company from operating in Texas. Another factor that most likely affected the rest of the airlines was cost reduction after 9/11 (Heskett & Sasser, 2013).
Governance of individual projects
According to Taugher (2009) and Olsen (2009), businesses should devise five to six objectives and create business strategies to reach these goals. They should be SMART (specific, measurable, achievable, realistic, timely) and the goals should be targeted toward the level of involvement. More specifically, the actions or behaviors to be implemented or changed should be implemented at the level of the organization, the department, or even the individual accordingly.
Larger organizations have a bigger challenge because there are usually multiple locations, departments, and en enormous amount of staff. Creating sub groups or committees can help to better define the current strengths and weaknesses as well as areas for opportunity or threats. In these cases, leaders are defined to help assess issues and then carry information down the line to the end user individuals.
The beginning of any good company is the vision of what is possible and to see opportunities that are there and have the skills and equipment to take advantage of the situation in a timely fashion (Thomas, 2012). At the time Southwest Airlines started their vision was clear. One of the excellent points is that leaders may sometimes fail to support their own strategies. The leaders and managers of Southwest Airlines have been using LEAN rollouts where senior leaders have proclaimed that they are going to become a LEAN organization.
Strategy and relationship with different stakeholders
A strategic plan must contain several key elements. The plan must include clear communication of the strategy. A strategic planning task force consisting of members of the organizations leaders and key business areas and departments to ensure high level input and buy in. The strategic plan must include a vision to the future. The organizations mission statement of who they are and what they are in the market. The plan should include a statement of the organizations values as a guideline of the behavior that is acceptable for staff. Goals and objectives that are clear and measurable (Carrillo, 2005). Be sure to assign specific tasks to the organized groups. These tasks should be clear, specific, and measurable and time sensitive for completion. Once the plan has been constructed and outlined, an implementing strategy needs to be formulated. The implementing strategy pulls all of the pieces of the plan together. An finally, a system of monitoring all of the ongoing tasks and deadlines of the plan. The monitoring and analysis of the plans is key to the success. Changes and adjustments may be needed or problem solving for potential or realized problems can be completed.
Lack of leadership can be a reason for organizations to collapse. The leaders of Southwest Airlines have realized that when there is lack of leadership support, any strategic plan will fail. Leaders have to show up at the right time and engage with the right people and most importantly continue to convey the vision, mission and values of the organization. The leaders have to ensure that they are not too ambitious. It would be correct to say that having too many goals will make it hard to focus on main objectives (Dierendonck, 2015). Failure to integrate the plan into the culture, operations, and budget- if the company objectives are somehow separated from the daily life, it makes it hard to sell the mission, vision and values. Lack of momentum in the short term- planning process should create momentum by having shorter time frames during which assessments and reassessments needs and corrections made. Failure to do so will lead to loss of enthusiasm.
One major challenge to a major corporation is choosing the best strategic plan. There are many plans to consider. Each plan takes into consideration many aspects of the new vision, the leadership involved, the cost, focus and environment (Daft, 2013). Choosing the wrong strategy can be disastrous for the corporation that attempts to apply it to their business plan. The loss of time and money can have such a negative effect that the corporation may never recover. The corporation’s leaders must have an accurate account of the vision, the financial stability, the market in which they are involved, trends and changes, innovations. Choosing the best strategic plan to implement can be a pivotal decision for any corporation or leader. The solvency of the entire corporation may depend on the outcome (Phelps, 2007).
Self Reflection and Analysis
In the case study the top company executives had a vision of what they wanted to achieve, they had a mission where they wanted the company to be who they wanted to serve and they planned what kind of services they wanted to offer. They then created a corporate culture that served the company very well and continues to serve it (Smith, 2008). Hiring of the people with great positive personalities, modeled that culture of a servant heart with fun LUVing attitude. Communication is utilized very well from creating the corporate culture, to marketing to even the corporate events and every step of the planning. In the case study we see the executives plan, assess and evaluate the process like when they have to change existing policy and come up with new policy such as “bags fly free” and expanding flights into other key cities.
I believe the largest issue in large or small organizations is communication. They seem to treat information like the CIA or FBI, a need to know bases but everyone should really know what is going with the organization and how it will affect their job. If communication were open and announced employees would feel they are of value and their ideas and thoughts matter. I can say that the leaders should also develop the art of conflict management within the organization. I have learned that the organizations should not try to avoid the conflicts. In fact, organizations and leaders should confront the conflict to get the best in the difficult situations. It is also important for people to use the negotiation skills to resolve the conflict. The focus of the organizations should be the achievement of end objectives (Nissen, 2007). The leaders should also have the ability to understand the viewpoints of different stakeholders. The project governance and corporate governance should be established so that all the stakeholders could work in a collaborative manner.
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