Southwest: A Triple Bottom Line Airline

 

Southwest Airlines has become a paragon not only in the airline industry, but in the business world at large. In fact, for 20 consecutive years, the company has been named to Fortune Magazine’s “Most Admired Companies” list and is consistently recognized for its customer satisfaction, quality of service, and corporate citizenship. All of this has led to a passionate, loyal customer base that few other companies enjoy.

As a Fortune 500 company with over 46,000 employees, the company attributes much of its success to its triple bottom line approach, placing equal value on people, the planet, and profit as it conducts business. This approach, which takes all stakeholders into account, may not yet be common in the upper echelons of the Fortune 500, but it is a key differentiating factor that has set Southwest Airlines apart from its competitors in a fiercely competitive industry and has also made it a model business that others emulate. We had a chance to discuss these keys to success with Bill Tiffany, Vice President of Supply Chain Management, and Casey Dunn, Southwest Airlines spokesperson.

Everything starts with our employees. We believe that creating an environment where they are happy, engaged, and thriving gives them the energy and freedom to do what they do best - deliver world-famous customer service.

What strategies is Southwest Airlines implementing to be a more socially and environmentally responsible company?

Casey Dunn: Southwest Airlines adheres to a triple bottom line approach, which takes into account our performance and productivity, the importance of our people and the communities we serve, and our commitment to efficiency and the planet. We recognize that each of these elements is interconnected and dependent upon the other. Our fuel efficiency initiatives reduce costs while also minimizing our environmental impact. Similarly, our investments in the communities where Southwest flies contribute to making them great places to live, work, and visit. Of course, none of this could happen without our 46,000 passionate employees. They are the reason our customers keep coming back. We are committed to creating a job-secure environment where our employees have opportunities to grow and make a positive difference.

What is the business case for acting in a sustainable way? Do the sustainability efforts directly contribute to the company’s financial bottom line?

Bill Tiffany: For Southwest Airlines, the business case to act in a sustainable way is simple - it’s the right thing to do for our company and our planet. We are in the business of connecting people to what’s most important in their lives through friendly, reliable, low-cost air travel. It’s no secret that operating an airline comes at a cost to the environment. Like any capital- intensive company, we consume a lot and produce waste. We are focusing on efforts that minimize our consumption and reduce or repurpose what we may have previously considered to be our waste.

Southwest is renowned for its customer service and happy employees. What do you attribute this to? What employee engagement tactics does the company employ to be so successful in this arena?

CD: For 43 years, Southwest has been a people-centered company that puts a priority on the welfare of our employees, service to our customers, and giving back to our communities. Our employees do more than deliver friendly, high-quality customer service that turns a passenger into a loyal customer; they create innovative programs to increase productivity, generate ideas to trim costs so we can keep fares low, and give back to our communities and the planet.

Everything starts with our employees. We believe that creating an environment where they are happy, engaged, and thriving gives them the energy and freedom to do what they do best - deliver world- famous customer service. One of the many ways that we strengthen our culture is through the Companywide Culture Committee, which is made up of 157 active members who serve three-year terms, and more than 170 alumni members. The mission of the committee is to inspire employees to own, strengthen, and promote Southwest culture. The members are charged with responsibilities, including helping communicate important company information from our senior leaders, brainstorming new company initiatives, and volunteering for culture events designed to engage and celebrate our employees.

What new innovations have resulted from Southwest Airlines’ efforts to be a more conscious company?

BT: The LUV Seat: Repurpose with Purpose project is an example of Southwest’s innovation in terms of sustainability. As Casey mentioned, Southwest Airlines has a longstanding commitment to pursuing a triple bottom line through its business, particularly as it relates to sustainability and environmental efficiency. As part of this commitment, Southwest launched its Evolve campaign, a large-scale redesign of all 737-700 aircrafts, a portion of its 737-300 fleet, and which is now standard on all newly acquired aircrafts.

By replacing the leather seats and other interior materials with durable and environmentally responsible products, Southwest reduced the weight of each aircraft by more than 600 pounds. The Evolve retrofit resulted in nearly 43 acres of used leather - approximately 80,000 leather seat coverings - being removed from Southwest airplanes. As an active environmental corporate citizen, Southwest knew that it could not simply discard this volume of leather; the company needed to find a new purpose for it. The process of upcycling the leather, or converting waste materials to new materials or products of greater value, provided Southwest with a unique opportunity to make a large-scale impact with its leather. Through upcycling, Southwest wants the products to leave a positive impact on communities, bene t the individuals producing them, address issues facing the communities where they are produced, and create new social enterprises so that the effects of the project live longer than a single donation.

Southwest is donating the leather to organizations across the globe like SOS Children’s Villages Kenya, where young adults apprenticed in leather work and produced 2,100 pairs of shoes with the local sustainable shoe company Maasai Treads. The shoes were donated to SOS Villages and Ahadi Trust as part of an anti-jigger campaign [Editor’s note: a jigger is a parasitic flea that burrows into people’s feet], and to Cura Orphanage, a residence for children who have lost their parents to AIDS. In addition to making shoes, the young adults learned how to hand-stitch 1,000 soccer balls with Alive & Kicking, which uses sports education campaigns to raise awareness about HIV/AIDS and malaria prevention. Life Beads Kenya, a charitable organization that provides skills, opportunities, and a livelihood for local women and disabled people, will produce thousands of wallets and toiletry bags with the donated leather. In the US, Southwest Airlines joined with LooptWorks, a domestic upcycling company, to create high-quality duffle bags and tote bags. Through the LUV Seat bags project, LooptWorks provided skills training and jobs for disabled adults.

It seems like creating change at such a large company would be difficult at times. What strategies do you use to overcome this and effect change on such a large scale?

CD: Southwest Airlines is always evolving to meet the needs of our customers, employees, and the communities in which they live. Our strategy has been to remain true to our core values as we aspire to become the most loved, most own, and most profitable airline in the world. We approach our business decisions within that context and work diligently to evolve the operation while retaining our culture. Much of the transformation of our company is a direct result of our employees’ innovations and ideas. When grassroots initiatives are implemented on a larger scale, it builds trust and empowers employees to be owners.

This article appeared in Issue 1 | Winter 2015

To see more articles like this, including the full cover story on John Mackey, exciting features on Jay Coen Gilbert, Southwest Airlines, New Belgium Brewery and more - purchase Issue 1 of Conscious Company Magazine online!

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