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More on Strategic Planning and Processes

At the beginning of the 1990s, the marketing team for Southwest Airlines (LUV) got together for one purpose alone: to determine the state of society in the United States for the next 10 years. The conclusion they came to was that consumers were going to be increasingly value-conscious than the 1980s.

Understanding that it played to their strengths and strategy; it reinforced the company in their purpose.

How did they respond in planning and processes? Like we quoted Keller in the previous post "Basically, we just don't do it."

So what did they do then? Based upon who they were and what they wanted, they made efforts "to establish flexible goals and guideposts, not detailed action steps."

That's what Kelleher and the Southwest people understood better than most companies ever had: you can't set plans in concrete!. What kind of 'goals and guidepost' and related to what? Here's how Kelleher described it: "What kind of debt-equity ratio do we want on our balance sheet? When do we want to deviate from that? Are we doing so for a good reason?"

What were they doing by saying these things? They always looked to the core of who they were. They understood that as far as the practicals go, if they stay true to their core beliefs, the practicals would take care of themselves. To plan practicals is to put yourself and the company in chains that are difficult to break out of. The practicals can become policy and can destroy a business because people won't break 'policy.'

It's the reason why everything was flexible and guideposts simply put out as basic parameters to work within - yet nothing was set in stone. Being faithful to detailed action steps can kill a company if it breaks away from the core reason for the company's existence and purpose in the first place.
 
How can a company operate like this? Actions taken, organically come out of the everyday interactions of the company and its people with consumers or clients. The flexibility built into guidelines allows people to do extraordinarily creative things to handle problems, rather than be concerned about whether it will get them into trouble over policy or not.

With Southwest nothing was set in stone and it released people to do amazing things that became legends in the business world and among its customers.

Other Herb Kelleher Sources:

A Culture of Commitment

HERB KELLEHER

The wild turkey

Herb Kelleher on the Record, Part 1

Herb Kelleher Talks about How Southwest Airlines Grew from Entrepreneurial Startup to Industry Leadership

Belief Model for The Leadership of Herb Kelleher (Southwest Airlines)

Herb Kelleher, Chairman, CEO and President, Southwest Airlines

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