Author: Arend Pryor | Created: 03/20/2021
Details: Sharing content created as part of pursuing my MBA degree
Assignment: The Southwest HR director would like you to review several strategic reports on the organization and provide feedback on how you think the organization should move forward. Compile a strategy recommendation for the HR director to be used for company-wide decisions.
Herb Kelleher, the founder of Southwest Airlines once said, “The essential difference in service is not machines or 'things.' The essential difference is minds, hearts, spirits, and souls” (Economy, 2019). Southwest Airlines has been on a path to being number one in the airline industry based on the areas of operational performance and as of 2020, they hit this goal. The strategies that helped propel the company into the top spotlight include efficient operations, being the low-cost leader, focusing on innovative logistics, and an unwavering commitment to next-level customer service. As part of aligning with these business strategies, the area of human resource management (HRM) is a key component in supporting and facilitating the achievement of the company’s mission, vision and goals. This is a partnership that relies on two-way communication, transparency and supportive activities. This can be seen in the HRM implications of the business strategies including job design and job analysis, focusing on customer service, and employee training and development. As part of the overall analysis, this project includes the proposal of Human Resource (HR) strategies that go hand and hand with the business strategies of the company.
The following is an outline of the current business strategies being pursued by Southwest Airlines as well as supporting information and details for each. By aligning with these areas of strength, the goal of the company has been to achieve a competitive advantage in the airline industry.
Efficient Operations: Operational performance in the airline industry is measured on an annual basis using metrics such as the number of on-time arrivals, flight cancellations, delays, and flight time variability (Hansen, Zou, 2013). Despite the effects of COVID-19, Southwest Airlines was voted the best overall airline by the Wall Street Journal for 2020 based on one of its core strengths, operational performance (McCartney, 2021).
Low-Cost Pricing: Being a low-cost leader is a badge of honor that Southwest wears with pride. This is made possible by the company’s large size, as they are one of the big four in the airline industry, and they have the financial strength to back it up. By offering the most competitive pricing for frequently traveled routes, during times of economic hardships, customers gravitate towards the best deals, which provides the company with an advantage in this area (Investopedia, 2020).
Innovative Logistics: Companies who encourage a culture that seeks to find new ways of innovating and improving have a competitive advantage over competitors who are stuck in their ways. Southwest is continually on the hunt for solutions that result in lower-costs, which led to the company to build a new innovation center that focuses on the improvement of customer logistics (Arnold, 2020).
Focus on Customer Service: The employees at Southwest Airlines are one of the company’s most valuable resources for providing extraordinary customer service. In order to facilitate a desire for its employees to provide next-level customer service, the company makes a concerted effort to show value its employees through various benefits and motivation. This is also due in part to a recruiting process that emphasizes finding the right fit for the culture and retaining their top performers (Tomasian, 2019).
In the section that follows is an analysis of the issues identified by the company via the threats section of their most recent SWOT analysis. Reviewing the items that had a negative impact on business operations during the prior year can help provide insight and aid in planning for areas such as these in the future.
Impact of COVID-19: Travel restrictions and stay-at-home orders due to COVID-19 dealt a huge blow to the airline industry and led to the cancellation of 80,000 Southwest flights during the first two months of the pandemic (McCartney, 2021).
Rise and fall of Fuel Prices: The cost and availability of jet fuel has an impact on the operations and profitability of companies in the airline industry. Fluctuations in fuel prices are often a result of market, political and economic events, which add to the volatility. (Southwest Airlines, 2021).
Increasing Manpower Costs in US: Labor costs in the United States are rising due to tight labor markets, minimum wage increases, and a higher percentage of full-time workers (Southwest Airlines, 2021).
Stringent Government Regulations: Airline companies are mandated to comply with an on-going list of legal and regulatory criteria that govern the standards and safety of the industry. The cost of compliance can often involve significant expenses that companies must bear as a cost of doing business (Southwest Airlines, 2021).
As a result of the analysis listed above, this section focuses specifically on three of the HRM implications of these business strategies here at Southwest Airlines. This includes the following:
Strategy: Innovative Logistics | HRM Impact: Job Design and Job Analysis:
With an increased push to find new ways of innovating the customer experience and the processes associated with airline travel, this will have a direct impact on the HRM function of Job Design and Job Analysis. This area focuses on accurately detailing the tasks, duties, and responsibilities for positions within the organization in order to find the right fit for the position (Shalani, 2021). Any innovations that lead to changes in the day-to-day job duties of a role within the organization would need to be communicated with human resources (HR) in order to update existing job descriptions.
Strategy: Focus on Customer Service | HRM Impact: Employee hiring and selection:
In order to continue its goal of providing next-level customer service, the methods utilized by the company and its employees, will no doubt continue to evolve over time. This has a direct impact on the strategies and processes used as part of the HRM function of employee hiring and selection. This is a vitally important process as it all starts with the right hire for the job and subsequently helps the organization reach its customer service goals (Shalani, 2021).
Strategy: Efficient operations | HRM Impact: Employee training and development:
As mentioned above, Southwest Airlines was ranked number one in the industry for 2020 by the Wall Street Journal based on their scores for areas in operational performance. Since 2016, Southwest has been slowly climbing the ranks and making improvements to the critical areas that drive these scores (McCartney, 2019). The effort involved with improving their scores and moving into the top position no doubt had an impact on the HRM function of training and development. The effectiveness of this area of the organization directly contributes to helping the company achieve a competitive advantage by assisting workers in understanding their strengths, weaknesses and interests (Noe, Hollenbeck, Gerhart, & Wright, 2019).
One of the factors to weigh as part of evaluating the relationship between a company’s business strategy and the area of HRM is whether the approach of the HRM team results in selecting the best candidates for the job and that employees are performing jobs that align with the strategies of the company (Noe, Hollenbeck, Gerhart, & Wright, 2019). Included below are proposed business strategies for each of the three HRM implications mentioned above.
Business Strategy Enhancement 1: Innovative Logistics | HRM Impact: Job Design and Job Analysis
Managers overseeing the area of innovative logistics should work with HR to review improvements that resulted in job design changes and analyze areas to target in the future. This would help to balance changes and target opportunities for improvement across the organization.
Business Strategy Enhancement 2: Focus on Customer Service | HRM Impact: Employee hiring and selection:
My suggestion for an enhancement to the current business strategy of focusing on customer service is to add an additional layer and that is for employees to take a passenger-first approach. This would involve putting yourself in the shoes of the customer to anticipate their expectations, being an active listener, and providing information that empowers their decisions (Garbrecht, 2019). This enhancement to the existing strategy should be a partnership with HR and result in changes to the hiring and selection process that continue to provide alignment.
Business Strategy Enhancement 3: Efficient operations | HRM Impact: Employee training and development:
For the area of efficient operations, the suggested enhancement to the existing business strategy would be to invest in digital technology that empowers employees. Specifically, technology that improves an employee’s efficiency and prevents self-made workarounds that result in delays and inconsistent results (The Top 5 Things Major Airlines Are Doing to Improve Their Operations, 2020).
HR has evolved into a valuable partner and resource in many organizations today. They participate in collaboration sessions with top-level managers and are part of the process for developing a unified company-wide approach. In order to develop a successful HR strategy, the focus should be on identifying the things that motivate and empower employees to perform at their very best. Included below are the HR strategies being proposed in response to the HRM implications mentioned above.
HR Strategy 1: Innovative Logistics
For this area I would propose an HR strategy that focuses on transparent and regular communication, not only between HR and the innovation group, but across the entire company. Continuous innovation requires frequent and open communication that must be shared up and down the chain of command (Buhler, 2015).
HR Strategy 2: Focus on Customer Service
The goal of providing excellent customer service is a big one at Southwest Airlines and for this area, my suggested HR strategy is to find new ways of promoting employee autonomy in decision-making. One example of this would be for managers to give employees more decision making powers when carrying out assignments as part of building trust. Over time, the amount of trust given can grow until it reaches a point where leadership is more decentralized (Willink, 2020, pp. 90).
HR Strategy 3: Efficient operations
The pursuit of continuous improvement and increased efficiency in employee operations is on on-going objective. For this area, I would suggest continuing to focus on staff training and development, specifically to support employees in learning new technologies and those being introduced in the future. This will serve to build employee confidence, stay up to date with industry trends and potentially provide a competitive advantage.
To conclude this proposal, I leave you with one of my favorite quotes from Herb Kelleher, who also said, “We have a strategic plan – it’s called doing things” (Economy, 2019). The part we need to focus on is the specifics of what things need to be done. In order to hold on to our top spot as the number one airline in in 2021, we as a team need to continue to align ourselves with the mission, vision and strategies of the company. This means a focus on the activities that continue to position us as the low-cost leader, pursuing new innovation, and staying committed to our goal of providing customers with a level of service so good they tell their friends and family. As a partner in helping make this happen, the HR group here at Southwest Airlines is committed to supporting these efforts and will continue to evolve with the changing dynamics of the company and its workforce. The HR strategies being proposed here look to strengthen these efforts and align with the business strategies of the company to continue its growth and success.
References
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