The Power of a Dedicated Workforce and Adaptive Leadership
Do the Right Thing: How Dedicated Employees Create Loyal Customers and Large Profits

James F. Parker

People matter most. It’s a familiar mantra for many businesses. But when push comes to shove, all too many companies would rather slash costs, cut head count, replace well-paid employees with lower-paid employees or outsourced workers, and reduce customer service. And after all of that, many fail.

But it needn’t be that way, writes James Parker in Do the Right Thing: How Dedicated Employees Create Loyal  Customers and Large Profits. By focusing on “doing the right thing,” Parker argues, your company can remain profitable and growth-oriented for decades.

If anyone can make this case, it’s Parker, who served as CEO and Vice-Chairman at Southwest Airlines through 9/11 and its challenging aftermath. Before taking the reins in June 2001, he’d spent 16 years as its general counsel, helping to build Southwest’s unique culture of respect, resilience, and a commitment to doing what’s right.

In Do the Right Thing, he describes how after 9/11 Southwest made three pivotal decisions: no layoffs, no pay cuts, and “no-penalty, no-questions asked refunds” for any customer wanting them. The result: Southwest’s revenue passenger miles for the fourth quarter of 2001 dropped by only 0.5%, and its market cap soon exceeded all of its major competitors combined.

These decisions grew naturally from Southwest’s culture, which Parker details in the book, focusing on how its principles can strengthen any team, organization, or company. Do the Right Thing also reveals how to build an environment where teamwork comes naturally—where people know how to have fun while they’re consistently outworking and outsmarting their competitors. In one of the world’s toughest industries, Southwest has stayed profitable for 34 straight years. Do the Right Thing is about learning the lessons it can offer to any business.

A hiring lesson from Do the Right Thing:

Southwest is legendary for its philosophy of “hiring for attitude and training for skills.” But what about roles where strong skills are indispensable, like the role of pilot?

In the following excerpt, Parker discusses how Southwest’s culture drives its unique approach to hiring pilots, too. Pilots must have a high degree of self confidence. Nobody would want to fly with a pilot who was consumed with indecision or self doubt.

At Southwest we wanted pilots who possessed a high degree of self-confidence, without letting it spill over into arrogance or intolerance. In some parts of the world, airline cultures are akin to oldtime command and control military structures. The captain’s authority and decisions are unquestioned, like that of a military dictator.

Safety experts know that some aircraft accidents are the result of avoidable pilot error. The likelihood of such an error is greatly enhanced in a culture where offering unsolicited information to the captain is viewed as insubordination. Indeed, several well-publicized crashes have been shown to be preventable, if only the first officer had more forcefully brought information to the captain’s attention or insisted on following established safety procedures.

While we wanted pilots who were self-assured and willing to make instantaneous decisions, we also wanted pilots who were receptive to input. There is no such thing as a zero-defect human being. True cockpit discipline requires that even the most junior first officer or flight attendant must speak up when safety is at issue, and that even the most experienced senior captain must encourage such openness. One pilot came to us with superb references and a gold-plated resume. He had great flying experience, and had been promoted quickly through the ranks of the military. He had experience commanding people, and had flown every kind of airplane imaginable.

On paper, he looked like exactly what any airline would want in a pilot. Several days after his interview, when he received notice that he had not been selected, he was shocked. He had to call to see if a mistake had been made. He was assured it was no mistake. “But, why?” he wanted to know. He was told the truth. He was not selected because he had been rude to the receptionist when he arrived for his interview.

Ultimate Leadership: Winning Execution Strategies for Your Situation

Russell E. Palmer

To succeed, leaders must understand and apply the core principles of leadership—but they also must shape their approach to fit whatever situation they are facing. Too many leaders, says author and former Wharton Dean Russell E. Palmer, don’t know how to do that—and that’s why they fail. Palmer’s Ultimate Leadership shows how to adapt the principles of leadership to virtually any challenge, context, or organization.

Palmer himself has had three very different, highly successful careers. At Wharton, he was called upon to lead fundamental change in an institution with widely diverse, highly influential stakeholders. Ultimate Leadership includes lessons learned during those years at Wharton, as well as others from his time running one of the world’s largest accounting firms, and as an entrepreneur. But the book also draws deeply on his interviews with other extraordinary leaders — from former U.S. Marine Corps Commandant Gen. P.X. Kelley to Honeywell’s Larry Bossidy.

Palmer’s goal is to help readers identify the leadership model most appropriate for their environment, and then lead accordingly. He provides better ways to lead equals, weather crises, transform culture, lead entrepreneurial or global organizations, and even lead non-profits and academic institutions. For a classic “top down” organization, Palmer shows how to exercise strong authority without falling victim to ego or closed-mindedness.

He also offers guidance for driving changes in organizations of peers, where competing power centers resist pulling together. Ultimate Leadership also offers instruction on “leading troops” without getting too far in front of them, recognizing the implications of your role as a symbol, and making cultural change stick by reconnecting structures, processes, and strategies with new realities.

Organization in Crisis: Turning Danger into Opportunity

By 2000, Xerox was a company in crisis. To lead a turnaround, Anne M. Mulcahy was named as President, then became CEO in 2001, and chairman in 2002. In Chapter 5 of Ultimate Leadership, Palmer tells about how Mulcahy turned the company around.

Mulcahy undertook the painful task of reducing the number of employees at Xerox from 80,000 to 58,000. During the worst of times, though, Mulcahy made sure that Xerox did not cut funding for R&D. She saw it as “the light at the end of the tunnel”—and she was right. By 2005, three-quarters of revenues came from products introduced during the previous two years. Under her leadership, Xerox went from a loss of $273 million in 2000 to a profit of $1.2 billion in 2006.

At Wharton, Mulcahy was asked about her approach to leadership. She said: “It’s most important to play to your strengths and not conform to someone else’s image of leadership. It allows you to have integrity of style and consistency of character. I don’t think I’m a different leader today than in my first management job. I’m very direct. I’m less into management than I am into working with teams and solving problems. I’m very engaged and involved, but also, I encourage others to have fun. Even during our darkest days, I’m big on, ‘It’s a job, so lighten up and don’t confuse life and work.’”

Mulcahy said what made the cost-cutting work was that employees around the company participated directly and enthusiastically. “There was a real consciousness about symbolic things,” she said. “There was no longer any free coffee. There were no free meals for 18 months. But we made it consistent throughout the company, up and down. There weren’t ‘haves’ and ‘have nots.’” Mulcahy took clear command, but she also understood that to drastically change the organization she needed to engage key workers in teams that attacked and solved problems, and bring key players into the process of change.

The Xerox crisis taught an important truth: Don’t view every crisis merely as something to be overcome. Crises can also make you and your organization better. They are times of great opportunity. Leadership during a crisis is a solidifying and revealing event. You never know fully about people until you have seen them under fire.

During a crisis, leaders really see whom they can count on and whom they cannot. It is telling how different some people become when they see the company’s and their own future in danger—as any leader who has been through “the fire” will tell you. It is an illuminating, bonding experience.