Sometimes, I think there’s a secret society of companies that just “get it.” From top to bottom, these companies live and breathe their culture and know that it’s their most valuable asset, and, strangely, one that is invisible on a corporate balance sheet. Which companies are part of this secret society? Google, Genentech, Harley Davidson, Continental Airlines, Whole Foods Market, Medtronic. But, the company that sets the standard is Southwest Airlines. Thirty-five of our top JDV execs did a three-day off-site retreat twelve years ago exclusively focused on what makes Southwest Airlines the champion of the flying business. Of course, they have the odds stacked against them in that industry and this company is the low-price, second most unionized airline so who would expect them to be the most profitable, most admired, highest customer loyalty company in the biz. From that off-site sprouted our Joie de Vivre heart which has been a foundational piece of our business strategy ever since as all 3,000 of our employees gets educated in how culture drives employee enthusiasm which fuels customer loyalty which drives profits which can then be invested back into the culture. It’s a virtuous circle.
Last week, the New York Times printed a fabulous story juxtaposing Southwest and American Airlines. Both are based in Dallas. Both have their annual shareholder meetings on the same day every year. If you want to understand the importance of culture, read this article as it demonstrates that a vibrant culture leads to applauding investors at the Southwest shareholders meeting – even during a very difficult time for the airline industry. Quite the opposite at the American meeting.
NY TIMES story
I will sign off by just taking my hat off to two giants of industry. Southwest co-founder and former CEO Herb Kelleher is stepping down as chairman after 37 years. Shareholders at the annual meeting “gave him the kind of standing ovation usually reserved for rock stars.” His “Herbisms” (great quotes like “the customer comes second”) taught me more than any Stanford Business School class I ever took. And, I also want to express deep appreciation to Warren Buffett whose company, Berkshire-Hathaway, had their annual “Woodstock for capitalists” this month. This company’s annual shareholder meeting attracts 30,000 of Berkshire’s faithful and it’s almost like a church revival event. In the era when corporate CEO’s are “over-handled” by their PR departments, I truly admire the fact that Warren gets up on stage in the big arena and answers questions and extols wisdoms for five hours to the tens of thousands of Berkshire shareholders. And, he does so with humanity and a sense of humor. I am the Finance Chair of the venerable, inner city Glide Memorial Church Board and have to tell you that each year the Church auctions off a “Private Lunch with Warren” to the world on eBay. Warren has donated himself for this cause because he’s such a believer in African-American Minister Cecil Williams’ brand of liberation theology and the impact it has on San Francisco’s inner city. What’s truly remarkable is that people will bid as much as a half-million dollars to have a private lunch with friends with Warren sitting at the head of the table. Thanks to both Warren Buffett and Herb Kelleher for reminding us that there’s a culture-driven brand of capitalism that is more powerful and sustainable than the transaction, dog-eat-dog brand of capitalism that we tend to read about in the popular press.
May 29th, 2008
May 10, 2008
Dear Barack,
It isn’t easy being a transformational leader, is it? Congratulations on what looks to be a victory for the Democratic nomination, but let’s look at the last four months (which must have seemed like four years) and see what lessons we have learned about transformational leadership.
1. First, we need to give some credit to James MacGregor Burns who long ago wrote the book Leadership and described two kinds of leaders: “transactional” and “transforming.” He wrote, “The relations of most leaders and followers are transactional - leaders approach followers with an eye to exchanging one thing for another…Transforming leadership, while more complex, is more potent. The transforming leader recognizes an existing need or demand of a potential follower. But, beyond that, the transforming leader looks for potential motives in followers, seeks to satisfy higher needs, and engages the full person of the follower. The result of transforming leadership is a relationship of mutual stimulation and elevation that converts followers into leaders and may convert leaders into moral agents.” It’s almost like a transactional leader is leading from the bottom of the pyramid while the transformational leader (I prefer “transformational” to “transforming”) is leading from the top. No doubt, while most political pundits haven’t read my book PEAK, I do believe they would acknowledge that your chief political adversary, Hillary Clinton, has run her campaign as a transactional leader with her very tangible, policy-driven, and practical approach to solving problems. In fact, one of the chief knocks on Hillary has been her inability to inspire or help people see the bigger picture and, at times, her tendency to focus on the fear-driven survival needs of the electorate.
2. Many of the things that Burns has written apply to your campaign: the “complex” but “potent” message, the fact that you recognized the “higher needs” in your followers - the desire for a new kind of politics that stands above the past political pollution, and the “Yes, we can” message that “converts follower into leaders” and has helped convert you into a “moral agent.” You are a different kind of leader: one who asks us to “be all we can be” if I can be so bold as to steal a phrase from Maslow and the US Army. JFK used to talk about a rising tide lifting all boats and that’s the kind of feeling many Americans experience when they hear you speak, read your books, or really take a moment to understand your truly American Dream of a life story. We are living in a time when my fellow countrymen and women are looking for the kind of change that a transformational leader can offer. It’s a new century. It’s a delicate and small world. We don’t fit into the demographic boxes that made sense in 1958. Fifty years later, America is waking up to the fact that other countries around the world are passing us by as we live in splendid isolation on this big island we call the US of A. Your diverse history from Kenya to Indonesia, from Kansas to Hawaii speaks to the future, not the past, and the only way you will win the election in November is if you help America see the necessity of transforming ourselves to succeed in the future as opposed to just wallow in our glorification of the past.
3. You will be painted as the “American Dreamer,” a nice enough fellow but someone different enough to not understand the issues of the common man. You will be seen as a Harvard-educated elitist who can give a great speech, but who doesn’t know how to get his hands dirty to make things work. You will be vilified as a “snake oil salesman” with your slick and polished manner and you will be cast as the “other,” not really one of us. When they hit you with this kind of rhetoric, just remember two things: remind them that our greatest leaders were different and that the world isn’t what it used to be. Lincoln, that greatest of Presidents from your state of Illinois, was different. He wasn’t a transactional leader making deals in backrooms. He helped America see that we were on a path toward ruin if we didn’t unify. Kennedy was different. He was elected President when Catholics were considered to be lower class and not fit to be the supreme leaders of the land. He reminded us to reach for greater things whether it’s putting a man on the moon or having the courage to stand up to the Soviets. Reagan was different. He was an actor–and a not too impressive one. But, whether you liked his politics or not, his transformational message took us from the ugly 70’s to the confident 80’s with his “morning in America” perspective and his “tear down this wall” speeches to the Soviets. Our best Presidents have been transformational in their ability to unite us and help us individually and as a country “be all that we can be.” You are also the perfect messenger of the message: the world has changed and we need to change with it. Our American empire will crumble like the Romans if we don’t adapt and see that our leadership needs to be future-oriented and visionary as opposed to being wedded to the past. Be bold and transformative with your policy proposals whether it be in the area of energy independence, educational reform, or helping us to regain America’s status as a trusted and respected ally to our foreign friends around the world.
4. Whether in business or politics, transformational leaders need to surround themselves with practical, solutions-driven operators who know how to “make the trains run on time.” Choose a Vice President who can be a Chief Operating Officer, someone who can take your vision and make it actionable. To show that you truly mean to unify the country, choose a few members of your cabinet that are independent-minded Republicans who can give you the kind of 360 degree perspective that our current President has so sorely been lacking. Be specific about your policy goals and deadlines as the greatest risk you have is being perceived as the ethereal monk on the mountain who gets high breathing the air but hasn’t provided for the basic survival needs of himself and his people. Find a few Presidential potholes to fix. As a transformational leader, just remember that your greatest gift is in helping us see the sense of “oneness” that we have at our core and that you so eloquently speak of and exhibit on the campaign trail. Our greatest leaders help us see what we couldn’t envision on our own.
Good luck to you. You have a formidable and admirable opponent in John McCain who shares many of your qualities.
Wishing you all the best,
Chip Conley
May 11th, 2008
