Not Just A Company, A Cause
Last week we looked at the last stage of the passion inner core being reinventing management for the social generation. Today we are going to delve into how establishing a cause, not just a company, is the way to ignite the energy within your organisation.
For decades, a well-defined set of parameters governed the logic of business competition. Strategy was about delivering superior products: Is your company’s automobile or appliance or computer cheaper, better, nicer to look at? Strategy was about selecting attractive markets: What demographic segments or consumer categories matter most to your organization? Strategy was about mastering economics: What advantages in scale, costs, margins, and pricing allow your company to deliver superior performance in productivity, profitability, and shareholder returns?
Which is why, truth be told, so much of strategy has been about mimicry. Big companies in most industries have been content to compete from virtually identical strategic playbooks and to vie for advantage on the margin: Whose products can be a little better? Whose costs can be a little lower? Whose target markets can be a little more attractive? Think Coke versus Pepsi. Every once in a while, of course, something genuinely new alters the trajectory of an industry: the ubiquity of bottled water and natural drinks in the beverage business. But inevitably (and almost immediately), innovation gives way to duplication.
No book better summed up this revolutionary fervor than the aptly titled Leading the Revolution by Gary Hamel, the celebrated strategy guru. Hamel is one of the most influential business thinkers of his generation, a brilliant speaker, consultant, and professor who’s been affiliated with the London Business School and the Harvard Business School. Hamel’s core constituency is senior executives in the world’s most powerful companies, and his book took these power players to task for the groupthink that afflicts so many of them in the executive suite. “Most people in an industry are blind in the same way,” Hamel warned. “They’re all paying attention to the same things, and not paying attention to the same things.”
So what’s the solution? Revolution! Hamel urged aspiring “corporate rebels” and “gray-haired revolutionaries” to “start an insurrection” in their industries. “You can become the author of your own destiny,” he thundered to his readers. “You can look the future in the eye and say: I am no longer a captive to history. Whatever I can imagine, I can accomplish. I am no longer a vassal in a faceless bureaucracy. I am an activist, not a drone. I am no longer a foot soldier in the march of progress. I am a Revolutionary.”
Who can unleash a set of ideas that shapes the future of their industry and reshapes the sense of what’s possible for customers, employees, and investors?
To be sure, these questions are hardly without precedent. More than a decade ago, Jim Collins and Jerry Porras published Built to Last, which became one of the best-selling business books of all time. As Collins and Porras examined the success of venerable companies such as John- son & Johnson, 3M, and Procter & Gamble, they discovered a sense of purpose at each of the companies, a “set of fundamental reasons for a company’s existence beyond just making money.” And this sense of purpose, they added, tends to be timeless and enduring—“a good purpose should serve to guide and inspire the organization for years, perhaps a century or more.”
Each of the maverick companies you’ll meet over the next few weeks exudes an undeniable sense of purpose. But it’s a sense of purpose that provokes: each company’s strategy tends to be as edgy as it is enduring, as disruptive as it is distinctive, as timely as it is timeless. In an era defined by the business, cultural, and social hangover from the excesses—a period of Corporate scandal, CEO misconduct, and unprecedented levels of mistrust between companies and their customers and employees—the most powerful ideas are the ones that set forth an agenda for reform and renewal, the ones that turn a company into a cause.
Southwest’s remarkable climb to industry leadership (it carried more domestic passengers in 2015 than any other airline) is not just about low-cost economics or high-touch service. Ultimately, it’s about the edgy and transformational sense of mission that drives every aspect of how it does business.
Southwest has become such a mass-market icon that it’s easy to lose sight of the utter distinctiveness of its approach to the airline business. The company’s direct point-to-point route system avoids the high costs and endless delays of the hub-and-spoke system around which the mainstream industry is built. The company has never offered first-class service or assigned seating or in-flight meals, and it was a late (and reluctant) participant in frequent-flier programs. Southwest’s no-frills approach to interacting with customers keeps fares low and makes for easy-to-understand offerings.
Yet low fares don’t mean sullen service. Quite the opposite: the company’s gate agents, flight attendants, even its pilots, are famous for their flashy smiles, showy personalities, and corny sense of humor. Anyone who has flown Southwest on Halloween, an almost-sacred holiday at the fun-loving airline, and marveled at the costumes worn by every- one from baggage handlers to mechanics, understands that this is an airline that flies on a different kind of fuel from its competitors. Indeed, Southwest may be the most colorful and instructive example ever of the power of strategy as advocacy. This is a company whose distinctive value system, rather than any breakthrough technology or unprecedented business insight, explains its unrivaled success.
A few years back, Money celebrated its 40th anniversary by identifying the best-performing stock over the magazine’s four-decade history. The winner wasn’t General Electric, IBM, Microsoft, or some other revered name. It was Southwest Airlines, a maverick force in one of the least attractive industries in the world. (It does pay to be a maverick. According to Money, a $10,000 investment in Southwest shares in 1972 was worth more than $10.2 million 40 years later.)
Southwest didn’t flourish just because its fares were cheaper than Delta’s or because its service was friendlier than the not-so- friendly skies of United. Southwest flourished because it reimagined what it means to be an airline. Southwest isn’t in the airline business. It is in the freedom business. Its purpose is to democratize the skies—to make air travel as available and as flexible for average civilians as it has been for the well to do.
That unique sense of mission is what drives Southwest’s business strategy, from the cities it serves to the fares it charges right down to whom it hires and promotes. There is a direct connection between the economics of Southwest’s operating model, the advertising it aims at its customers (“You are now free to move about the country”), and the messages it sends to its 30,000-plus employees (“You are now free to be your best”). The late Herb Kelleher explains the connection this way: “Business strategies change. Market positioning changes. But purpose does not change. Everybody at Southwest is a freedom fighter.”
In the workplace, employees took up a battle cry designed to connect the company’s disruptive business strategy to daily life inside the organization: “At Southwest, Freedom Begins with Me.” Herb’s team went so far as to identify the “Eight Freedoms” that defined the working experience at the airline—from “the freedom to learn and grow” to “the freedom to create financial security” to “the freedom to work hard and have fun” to “the freedom to create and innovate”—and he created a traveling “freedom exposition” to recruit employees to the cause behind the company.
What ideas is your company fighting for? What values does your company stand for? What purpose does your company serve? How are you igniting passion from within?