Why is it that real leadership is so hard to find? I thought about this over the long Memorial Day weekend when reading a New York Times story that contrasted the annual shareholder meetings last week for Southwest and American Airlines. Both airlines are headquartered in Dallas, of course, but that’s where the similarity ends.
As the Times notes, “The [American] meeting itself could not have been more downbeat,” and the discussion by CEO Gerald Arpey was about all the bad things the airline industry is suffering these days—$130-per-barrel oil, capacity cutbacks, worker layoffs and customer surcharges.
Contrast that with this: “The Southwest Airlines meeting began a few hours later,” according to the Times, “[and] Southwest, of course, is the great success story of the airline business—the only company that has been consistently profitable through these tumultuous times. … Its annual meetings tend to be love fests. This year’s [meeting], though, was the love fest to end all love fests. The company’s beloved co-founder, Herbert D. Kelleher—known to one and all as Herb—was stepping down as chairman after 37 years.”
The story goes on to talk about how an overflow crowd at the Southwest meeting—everyone from shareholders to members of the pilots union to rank-and-file employees—showed up to sing the praises of Kelleher on his retirement. But the outpouring of love and affection for Southwest’s outgoing chairman and longtime leader raises a simple question: Why does Kelleher command such loyalty, love and respect from his workforce? Outside of Warren Buffett and a couple of others you hear about here and there, very few CEOs or senior executives command the kind of loyalty—or have the kind of impact and success—that Kelleher has had at Southwest. How does he do it?
Well, simple questions sometimes have deceivingly simple answers, and if you listen to Herb Kelleher tell it, he succeeded in large part because he simply cared about his people.
“Over the years,” the Times noted, “whenever reporters would ask him the secret to Southwest’s success, Kelleher had a stock response. ‘You have to treat your employees like customers. … When you treat them right, then they will treat your outside customers right. That has been a powerful competitive weapon for us.’ As he stepped away from the company this week, his line didn’t change. ‘We’ve never had layoffs. …We could have made more money if we furloughed people. But we don’t do that. And we honor them constantly. Our people know that if they are sick, we will take care of them. If there are occasions or grief or joy, we will be there with them. They know that we value them as people, not just cogs in a machine.’ ”
I’ve worked for a number of years at a number of companies, and if I have observed any common principle it’s this: Consistently treating workers right—with fairness, dignity and compassion—is the exception and not the rule. Herb Kelleher’s style, despite its obvious success, is something far too few executives seem willing to follow.
“When you look at a company like American, with its poisonous employee relations and its glum customer base, and compare it with Southwest, with its happy employees and contented customers,” the Times observed, “you can’t help thinking that Kelleher was on to something when he put employees first.”
The Times is right; Kelleher was on to something. But it makes you wonder: Given how little original management thinking seems to be out there these days, why don’t more CEOs who are looking for a successful leadership model to emulate try copying Herb Kelleher?
But that was then, this is now, and Donovan and Nardelli are long gone. It’s not really surprising that Home Depot, a company that has really been struggling, is cutting more staff. What is a shock was the wholesale gutting of the HR infrastructure by cutting 50 percent of the company’s 2,200 person human resources field staff last week.
The move is designed to put more workers on the sales floor, which is ironic because floor staff was whacked so severely during the Nardelli/Donovan regime that you couldn’t find anybody to help you or answer your questions. The old, people-oriented culture of Home Depot was dramatically changed during their time together, and it’s pretty clear to me that the company has struggled, in large part, because of that decision.
So, I applaud the company’s new “Aprons on the Floor” program that should help customer service, but I wonder: is it a good tradeoff if you get more “Aprons on the Floor,” but lose your HR support throughout the company? As part of the cutbacks, Home Depot is creating a HR service center near Atlanta that will handle most of the company’s human resource needs by phone. Stores won’t have a dedicated HR manager but instead, “district teams” will be established that will divide three HR people among a small group of six to 10 stores.
What does it say about a company that it goes from having the highest paid HR executive in the U.S. to a phone-based human resources support structure in two years’ time? Analysts like this move–one told Workforce Management that the old HR structure “was way overdone and not typical for retail operations like Home Depot”–but analysts are always fond of short-term cost-cutting and are less concerned with the long-term impact.
I’m not sure if this move to minimize HR and maximize help on the floor will work any more than the old strategy did, but it will be interesting to watch, because it’s a real-time case study on the value HR brings to an organization. If Home Depot can make this work, it may push other companies to re-examine the value of their own HR departments. And when that happens, HR can kiss that seat at the table goodbye.
I’ve always been skeptical of the advice that comes from so many consultants and “experts,” those people who want to tell you how to fix a problem or better run your business, despite the fact that they have never really done it themselves.
Don’t get me wrong; there are a lot of great consultants working for companies like Aon, or Mercer, or even IBM, all of whom have great experience and knowledge in their area of expertise. I’d hire them in an instant to give me some practical, focused business advice.
But there are a lot of other folks running around masquerading as “experts” and “consultants” who are just high-paid mouthpieces for the latest hot business trend. Like newly minted MBAs who jump directly into consulting without a single scrap of real-world experience, these people have no business telling you how to fix or run YOUR business.
The blog adds: “Whether Brown is an expert on disaster preparedness is open for debate. … [He] never worked in disaster preparedness before he was chosen for the FEMA job by President Bush.”
And it goes on to note that “In a particularly nervy move, the [press] release [from the Cotton Cos.] also draws parallels between the California fires and the 2005 hurricane that devastated New Orleans and much of the Gulf Coast—and tagged then-FEMA Director Brown as incompetent and unqualified.”
The Cotton Cos. press release goes on to say: “Currently, the brush fires are affecting hundreds of local businesses and have forced more than 500,000 people out of their homes. Of these 500,000 people, an estimated 10,000 of them have taken shelter at the local NFL stadium, Qualcomm, vaguely reminiscent of circumstances of Hurricane Katrina evacuees two years ago.”
If nothing else, you have to award chutzpah points to Michael Brown—“Brownie,” in Bush-speak—for trying to sell his “expertise” in disaster management, an area in which he had no real experience before he entered government service, and from which he was sprung after Hurricane Katrina for being “incompetent and unqualified,” as the Journal blog puts it.
Consulting is a big-money business, but like a lot of things in life, it should carry a “caveat emptor.” There are good consultants, there are bad consultants, and then there are the Michael Browns of the world: “experts” who seem to be in a class all by themselves.
When it comes to famous jerks, few can match Apple CEO Steve Jobs.
Yes, he’s imaginative, persuasive and innovative, as you would expect from the guy who gave us both the Macintosh computer and the iPod, but he’s also arrogant, condescending, and nasty. Jobs is mentioned prominently in the book, The No Asshole Rule, and author Robert Sutton fondly recounts a reunion of 1,300 former Apple employees in 2003. “Even though Jobs didn’t attend, he was the main source of conversation, especially tales of his tirades and tantrums,” Sutton writes. “In one attendee’s words, ‘Everyone has their Steve-Jobs-the-asshole story.’ ”
Given Jobs’ reputation, it must have been a bit difficult for him to apologize earlier this week to Apple customers who were rightly upset when the price of the iPhone was cut by $200 only two months after the product was launched. As a story in The Washington Post put it: “Complaints like this prompted Jobs to offer his apologies in an open letter posted on Apple’s Web site—along with a $100 credit on Apple products to customers who bought the device at the old price. ‘We need to do a better job taking care of our early iPhone customers as we aggressively go after new ones with a lower price,’ he wrote. ‘We apologize for disappointing some of you.’ ”
Say what you will about Jobs, but he responded to the mini-crisis—one that knocked some $11 billion off Apple’s market cap by one estimate—quickly and decisively. And, even if you don’t believe it, Jobs’ apology sounded a bit sincere and a tad contrite, which apparently is not his standard operating procedure.
There’s a lot of debate about whether this was a real act of contrition or just more iPhone marketing hype, but either way, the apology will likely help Jobs and Apple, a point we made here at Workforce Management in a story titled “The Art of the Apology.” It quoted Atlanta-based attorney and consultant Stephen Paskoff, who showed how crucial it is for top management to lead the way in taking responsibility for mistakes and shortcomings, and offering apologies if necessary.
“Apologies can be a powerful tool for conflict resolution, but only if they’re part of a cultural change,” Paskoff said. “You need your corporate leaders to say, ‘If we make mistakes, we fix them. If someone says there’s a problem, you need to listen to what they have to say. And if you have a problem, you need to bring it up, because we’ll listen.”
Will an apology and a $100 credit on a new Apple product soothe the ruffled feathers of early iPhone buyers? Only time will tell, but the speed of Jobs’ actions shows that when it comes to making things right, the combination of money and a quick apology (even if it does turn out to be thinly veiled marketing scheme) is a combination that’s hard to beat.
Have a comment on Steve Jobs’ apology? Make use of our new comment feature just below this post.
I’ve gotten quite a few reader comments on some of my recent blog posts. Here are some of the best:
From an HR manager at a manufacturing company in Massachusetts, commenting about my item on a manager mindlessly defending an employee’s boorish behavior: “I agree that a good manager goes to bat for their employees wrongly accused. … However, this employee was not wrongly accused by the generally accepted standard of behavior in our society. The supportive manager is an enabler who would prefer to accept loud, boorish behavior and all the resulting consequences of it than address the behavior in a creative, effective and non-confrontational way. While we all have and love our eccentric co-workers, family members and friends, there are limits, and sometimes we have a responsibility to others to prevent them from embarrassing themselves in a public way. Don’t we all get enough of people’s stupid behavior from people like Britney and Paris?”
From a manager at the U.S. Department of Education, writing about my post questioning whether Jack Welch is really the “greatest manager of the 20th century”: “I’ve had the privilege of hearing the firsthand wisdom of Mr. Welch at two events in Washington, D.C. Everything he said still sticks with me today. Not only is the man smart, but he never let that get in the way of his common sense. … In short, I like him because he makes sense.”
From a Massachusetts-based consultant, responding to my post about the list of best-selling books from SHRM’s annual conference in Las Vegas: “The [SHRM] book list says to me ‘quick fix’ and ‘give me a step-by-step solution, one size fits all.’ Ironically, I think that’s one of the reasons HR gets a bad rap, often being forced to band-aid situations that need a more in-depth look. I think there are some issues in orgs that you just have to spend the necessary time to resolve, and the more you apply a quick fix, the more complicated the issue eventually gets.”
From a reader with the handle “Studentoldtimer,” writing about my post on the call center experience: “I can speak from personal experience that dealing with call centers can be a trying experience. … You are also absolutely correct when you state that the customer remembers the interaction as much as the product. Price is only one consideration when I’m shopping. As important (or more) is the service I receive from the warm body I deal with. For example, even though Wal-Mart has some of the lowest prices, shopping in the stores is unpleasant for me. Finding an associate is akin to tracking down a fugitive. The lines are very long at the cash registers. For these reasons, I will often choose to pay a little more at another, better-staffed store.”
I really enjoy getting comments from readers, and now it is easier for you to make a comment on one of my blog posts. The long-promised “comments” feature is now working, so feel free to click on the word “comments” at the bottom of any blog post—not only to have your say, but to also see how other readers are responding.
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