Culture is the Most Important Product of Leadership

Culture is the most important product of any leader’s work.

In a world where a person’s performance can be measured by a dizzying array of metrics, the culture that a leader creates is the only output that ensures the collective health of an organization and the individual well being of its people. It is the one and only product that truly matters, and few have built better, longer lasting cultures than Herb Kelleher.

In 1967, Herb Kelleher and Rollin King founded Southwest Airlines, which began as an intrastate carrier with 195 employees that operated only within the state of Texas. The now-national powerhouse boasts 58,000 employees and carries more US passengers than any other domestic airline. Southwest has posted profits for close to 50 consecutive years in the pardon-my-pun turbulent airline industry, which has seen 30 bankruptcies since 2000, including well-known carriers such as American Airlines, Delta Airlines, United Airlines, and US Airways (twice).

Despite its humble beginnings, Southwest now serves more than 100 million people each year, and it consistently ranks at or near the top of every metric for customer satisfaction. More than that, it has been recognized as one of Fortune’s Most Admired Companies for more than 20 straight years.

Executive Vice President & Chief Financial Officer Tammy Romo echoed the power of Southwest’s culture, saying in a 2018 article for Forbes, “Our people and our culture are by far two of our key strengths at Southwest Airlines. We have a very caring culture… It takes all of us working together as a team to accomplish our vision to be the world’s most loved, most flown, and most profitable airline. This instills ownership and pride because we all have such a meaningful purpose.”

However, there is more to the success of Southwest Airlines than its numbers, and that success begins with the culture continuously cultivated by co-founder and former CEO, Herb Kelleher. In fact, evidence suggests that Southwest could have had even more financial success at times if it had not been so fiercely committed to that culture.

In an interview for Fortune in 2013, Kelleher was asked about leading through tough economic times. “We could have made more money if we’d furloughed people during numerous events over the last forty years, but we never have. We didn’t think it was the right thing to do.”

Even at a time when it would have been easy, even understandable, for Kelleher and Southwest Airlines to make a small sacrifice to its culture in order to save the bottom line, Kelleher maintained a strong commitment to Southwest’s culture, saying it wasn’t the right thing to do.

Still, that doesn’t make it easy. Romo said, “We are in a challenging and highly regulated industry that is energy, capital and labor intensive. Being able to respond to forces we cannot plan starts with being prepared, especially with respect to our finances. The philosophy of managing in good times so that we are prepared for bad times has always served us well.”

Although many people may credit Southwest’s success to Kelleher’s infectious, larger-than-life personality, it is the airline’s commitment to its culture that separates it from others. As Romo pointed out, Southwest’s steadfast focus on people, specifically, its own people—its employees has become its greatest strength. At Southwest, employees come first, customers second, and shareholders third. This clear commitment to the organization’s people makes tough decisions easier by providing a clear way forward.

“I’ve always thought that having a simple set of values for a company was also a very efficient and expedient way to go,” Kelleher said. “And I’ll tell you why. Because if somebody makes a proposal and it infringes on those values, you don’t study it for two years. You just say, ‘No, we don’t do that.’ And you go on quickly.”

When asked by Fortune magazine about leaders from other companies who would come to Southwest to see how it achieved such consistent success, Kelleher said, “Many of them, I think, were looking for some formula, you know, that you could put on the blackboard. The concept is simple, but the execution takes a lot of work and a lot of attention. If you’re going to pay personal attention to each of your people, for instance, and every grief and every joy that they suffer in their lives, you really have to have a tremendous network for gathering information. We want to show them they’re important to us as who they are, as people.”

By choosing to focus on Southwest’s people, rather than on himself, Kelleher was able to achieve a level of success that so many other leaders can only dream of. Indeed, even in retiring as CEO of the company he co-founded, he demonstrated a commitment to this culture by creating the conditions for the next CEO to find his own success. By doing so, Kelleher demonstrated that Southwest’s culture-and the success of that culture-does not belong to the leader, but to the organization.

“I deliberately decided in deference to Gary’s leadership that I should take a much lower profile. It involves, for instance, not going to a number of company events, like the chili cook-off, because I didn’t want anybody to think that I was competing for attention with our new leader,” Kelleher said.

Southwest’s culture is not about Kelleher or any other leader. Instead, the culture is about the people and it belongs to the people, which is why it has worked for such a long period of time, even thriving after changes in leadership, devastating crises, and economic down-turns.