An analysis into the successful features of Semco and Southwest Airlines
Introduction
This paper will seek to demonstrate that although systematically Semco and Southwest Airlines differ, their core believes and the implementation of their human philosophies towards their employees are in fact extremely similar and it is those that the organisations attribute to their ongoing success.
We will discuss the varying features of both companies.
The Organisations
- Semco
An organisation defined by its majority shareholder Ricardo Semler as “a federation of business” (Semler 2007 p. 19) however focuses on complex ventures with high entry-barriers (Semler 2007 p.20)
It can be concluded that Semco requires, highly educated, technically sound workforce in order to run business units that range from manufacturing of cooling towers to inventory controls for the likes of Carrefour and Wal-Mart
- Southwest Airlines
An airline founded in 1967 and has been the envy of many in its industry as it has never recorded a loss since it became profitable in 1973 (Child 2005 p.395)
Special Features
- Semco
An organisation revolutionised by young blood that understands the merit in work/life balance and the importance of trust in employees’ abilities to deliver results whilst left to their own accord. An organisation turned around once new leadership was put in place.
“operating under the conviction that people are best judges of where and when they can best get the job done” (Semler 2007 p.14)
Creating a harmonious working atmosphere Semco enables its employees to be creative, innovative and establish new business lines that reap profit for the company without too many managerial layers obstructing the potential and development of the organisation.
The employees at Semco operate in self managed small groups, with extremely flexible working conditions, they choose when and where to work, have no contracts or official reporting lines and simply no confinements what so ever.
This structure is the exact opposite to most organisational norms whereby there are many rules, procedures and systems continually implementing the “big brother is watching” culture on employees. Doing so, most organisations demonstrate lack of trust intentionally or otherwise and although most of them claim high moral behaviour such systems imply the exact opposite and according Kohn (1993, p.58) “managers are creating a work place in which people feel controlled, not an environment conducive to exploration, learning and progress” .
Conventional organisations claim that rules and procedures are necessary to ensure high performance yet this may lead employees to feel that they cannot be trusted to behave ethically and responsibly and that they in fact do not have the organisation’s interests at heart (Baucus & Beck-Dudley 2005, p.362)
This may lead to lack of loyalty to the organisation and hence disrupt its progress especially if disloyalty leads to high turnover.
Systems set it place at Semco portray to the employees a lifelong commitment and a “we are in this together” type of attitude. The company encourages people to enjoy the things they like doing, even if it means taking certain afternoons off for an extended period of time (retire-a-little) program, whereby they can make up the time in later years.
They also allow employees a sabbatical of up to 3 years, again to try and do things that they enjoy other than work. Semco understands that an office environment although may not be for everyone, it is for some hence, to make it easier for those who want to work from an office but may find the commute to the head office problematic at times, they have set up satellite offices around the city where employees can turn up any time and work.
The environment at Semco is one that encourages employees to enjoy all aspects of their life simultaneously and doesn’t place a divide between personal life and work life. Most people miss out on things they like to do due to work time commitments; Semco encourages people not to do that, if an employee enjoys playing a certain sport, they are permitted to take the time to do that during what conventional organisations call “normal working hours”, furthermore if someone has issues with early mornings and perform their best work at night, Semco encourages people to work during those hours that they perform at their best by not placing office timings.
Decisions regarding new products at Semco are discussed over and over among the staff and until an idea is unanimously agreed on it does not go ahead, again a feeling of importance and inclusion within the employees is allowed to fester.
In conclusion Semco has done away with the conventional organisational culture, enabling it to recruit high caliber employees who are able to take the company from strength to strength year after year, not mentioning its ability to retain those employees.
Southwest Airlines
“One of the first “no frills” airlines, Southwest airlines has topped the list of most admired airlines in the world each year since 1997” (Child 2005, p.395)
The company indicates to have three passions, its performance, its people and the planet (Klein 2012, p.35) with “ three key organising values which are warrior spirit, a servant at heart and fun-LUVing attitude” (Klein 2012, p.36) These values are focused towards the employees, nothing is mentioned of shareholders, profits and more common organisational jargon.
There is great emphasis on employees being creative, funny, extroverted and innovative. Most interestingly employees are like Semco organised in smaller groups that focus on turning the planes around in the targeted time. The most common objective of the group ensures everybody does whatever is needed; hence it’s not uncommon to find pilots helping cabin attendants in clearing the cabin, a concept unheard of in other airlines.
Although unlike Semco an airline cannot do without job titles, the fact that everyone helps wherever possible breaks down the walls of bureaucracy, further enhancing moral of those who are not necessarily as technically skilled.
Throughout the organisation emphasis is made on the value of the “family” (Muduli & Kaura 2011 p.116) whereby staff are encouraged to engage in private chit chat and to celebrate with their colleagues in times of happiness and commiserate with them in times of sadness just as families do.
Southwest airlines understands that an individual’s characteristics and attitude is an inherited skill and cannot be learnt and spends an abundance of time recruiting the right people based on personality as they believe technical skill can be enhanced but attitude cannot.
In the airline industry, certain tangible decisions are also at play, Southwest airlines simple fleet enables it to maintain its airline easier and can benefit from economies of scale when placing a fleet order.
Its leadership sound vision of fuel hedging has enabled it to ride the storm of the fuel prices when out of control. The organisation’s financial attitude, leaving it cash rich whilst all the other airlines find themselves highly leveraged ensures that it never resorts to layoffs in times of economic hardship. The absence of layoffs, like Semco gives the employees reassurance and long term sense of belonging, pushing them to treat the organisation as if it’s their own business hence, pushing them to try their best at all times.
Conclusion
In conclusion, there is no doubt that the recruitment process in both these companies aims to hire the best people in their respective fields, but unlike other companies it establishes a humane, mutual respect sort of relationship. When times are hard, employees pull together, when times are good they celebrate together and they are constantly involved in the decision making process, in fact the organisation and its leaders are “happily married” to their employees.
References:
Baucus, M., & Beck-Dudley, C. (2005) ‘Designing ethical organisations: Avoiding the long-term negative effects of rewards and punishments’, Journal Of Business Ethics, 56(4), pp.355-370 [online]. Available from http://ezproxy.liv.ac.uk/login?url=http://dx.doi.org/10.1007/s10551-004-1033-8 (Accessed: April 24, 2013)
Child, J. Organisation: Contemporary Principles and Practice (2005), Blackwell Publishing pages 395-398.
Gerald D., K. (2012) ‘ Creating cultures that lead to success. Lincoln Electric, Southwest Airlines, and SAS Institute’, Organisational Dynamics, 41 pp.32-43. [online] . Available from: http://ezproxy.liv.ac.uk/login?url=http://dx.doi.org/10.1016/j.orgdyn.2011.12.005 (Accessed: April 24, 2013)
Kohn, A. (1993) ‘Why Incentive Plans Cannot Work’, Harvard Business Review, September-October, pp.54-63
Muduli, A., & Kaura, V. (2011) ‘Southwest Airlines Success : A Case Study Analysis’ BVIMR Management Edge, 4(2), February, pp.115-118.
Semler R. (2007) ‘Out of this world: Doing things the Semco way’ Global Business & Organizational Excellence. 26(5), pp.13-21, Business Source Complete [online]. Available from: http://ezproxy.liv.ac.uk/login?url=http://dx.doi.org/10.1002/joe.20161 (Accessed April 25, 2013)
No comments:
Post a Comment