Southwest vs. American: Happy Employees = Happy Customers

Joe Nocera reported in the May 24 issue of The New York Times on the deep contrast between American Airlines and Southwest – both powerhouses in the U.S. airline industry but with vastly different employee and customer care approaches.

Just look at how Nocera describes this year’s annual shareholders meetings for both companies – traditionally held on the same day every year (21 May this year) in Dallas-Fort Worth, home to both airlines. American shareholders were met with a picket line of flight attendants and pilots protesting contract negotiations. Southwest pilots, also in the midst of contract negotiations, ran a full-page advertisement in USA Today thanking outgoing chairman and co-founder Herb Kelleher for all he had done. American’s parent company chief executive spoke of layoffs, route cuts and additional customer fees. Southwest discussed its healthy balance sheet, significant earnings, and consistent profitability.

How does Southwest – a proudly low-cost carrier that has never had a layoff– do it year after year? Kelleher has said in past interviews referenced in this article: “You have to treat your employees like customers. When you treat them right, then they will treat your outside customers right. We honor our people constantly. They know that we value them as people, not just cogs in a machine.”

Gordon Bethune, former chief executive of Continental Airlines and old friend of Kelleher’s is quoted in the article commenting on Kelleher’s approach: “There isn’t any customer satisfaction without employee satisfaction. He recognized that good employee relations would affect the bottom line. He knew that having employees who wanted to do a good job would drive revenue and lower costs.”

This is exactly the point American Airlines – and numerous other foundering companies – fail to realize. Driving employee engagement by recognizing and rewarding employee efforts will always improve employee efforts on behalf of the customer. And happy customers increase your bottom line. It’s truly as simple as that – say “thank you” frequently, appropriately, and consistently to the people that matter the most – your employees.