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Of course it's not that simple, nothing is. The truth is that this situation has evolved over 20 years. The former CEO didn't say on their first day, "we shall

Of course it's not that simple, nothing is. The truth is that this situation has evolved over 20 years. The former CEO didn't say on their first day, "we shall invest no more in operations and infrastructure", but they made a series of decisions over those 20 years, some small and some large, which had the net result of de-emphasizing operations and emphasizing finance. The board sees operational expenses as a line item on a slide, they don't see the complaints from front-line workers or middle management. Infrastructure is one of those things that either works fine or fails catastrophically, and you need a series of those catastrophic failures to show a dent in the quarterly/YoY results, so it's unfortunately also easy to ignore if your metrics are finance-oriented. You can also get into a culture spiral, similar to what is happening at Boeing, where the management is gradually replaced with folks who focus on financial results and promotable metrics. This is ultimately the CEO's responsibility, but they need to install the right folks at the higher levels to fight against this tendency.

MuffinFlavored 4y ago
> but they made a series of decisions over those 20 years, some small and some large, which had the net result of de-emphasizing operations and emphasizing finance. I just don't like to believe that something as sophisticated as a $20b company can be boiled down by over-simplified observations you and I make from the comfort of our desks. There's got to be something more complex. https://www1.salary.com/Robert-E-Jordan-Salary-Bonus-Stock-Options-for-southwest-airlines.html https://www1.salary.com/Robert-E-Jordan-Salary-Bonus-Stock-O... CEO is making $3m/yr and you and I are supposed to be able to detect his weaknesses/mistakes/pitfalls at the blink of an eye? If it was that easy, why don't they just "not make that mistake" and fix the problem?
- inferiorhuman 4y ago
  I just don't like to believe that something as sophisticated as a $20b company can be boiled down by over-simplified observations you and I make from the comfort of our desks. It really is pretty simple. Herb ran a cult of personality, but that personality was that of a CEO of a scrappy little low cost regional carrier back in the 70s. That sort of loyalty dies hard. It's worth noting that Gary Kelly (chairman, ex-CEO) was not an outsider. His fuel hedges cut Southwest a ton of operational slack. That slack meant there was no incentive to spend money on operational improvements. Bob Jordan's not an outsider either, he worked his way up the ranks from a code monkey to CEO. That means they both were fully invested in the cult of Herb, and both failed up. The excessively hands on recovery plan would've been manageable at a much smaller airline. From Southwest's little PR piece on Bob: During his more than three decades at Southwest, the airline grew from a regional presence with around 7,000 People and 90 airplanes to a beloved national brand with more 54,000 People and a Customer base that topped 130 million Passengers in 2019. Bob has been responsible for the delivery of many key Company initiatives, including executive oversight for development of the Southwest.com e-commerce platform, the revamp of the Rapid Rewards® loyalty program in 2011, the $3.2B acquisition and integration of AirTran Airways, the comprehensive "Heart" brand refresh in 2014, significant domestic and international network expansion, and the 2017 switch to a new reservations system. Tech struggles are nothing new for Southwest, rumor has it one of the big challenges they had with the expansion into Mexico was figuring out how to accept payments in non-USD.
- tadfisher 4y ago
  It's actually very easy to make these observations; it is not a controversial opinion that SWA has operational difficulties due to their outdated tech infrastructure. Think of it as a computation in NP, where the result can be verified in polynomial time, but we may not know of a polynomial algorithm to compute it. The reason CEOs are paid so much is because they are tasked with the hard part of that problem; e.g. they have to find an operational strategy to create profit in a complex parameter space.

MuffinFlavored 4y ago

> but they made a series of decisions over those 20 years, some small and some large, which had the net result of de-emphasizing operations and emphasizing finance. I just don't like to believe that something as sophisticated as a $20b company can be boiled down by over-simplified observations you and I make from the comfort of our desks. There's got to be something more complex. https://www1.salary.com/Robert-E-Jordan-Salary-Bonus-Stock-Options-for-southwest-airlines.html https://www1.salary.com/Robert-E-Jordan-Salary-Bonus-Stock-O... CEO is making $3m/yr and you and I are supposed to be able to detect his weaknesses/mistakes/pitfalls at the blink of an eye? If it was that easy, why don't they just "not make that mistake" and fix the problem?

inferiorhuman 4y ago
I just don't like to believe that something as sophisticated as a $20b company can be boiled down by over-simplified observations you and I make from the comfort of our desks. It really is pretty simple. Herb ran a cult of personality, but that personality was that of a CEO of a scrappy little low cost regional carrier back in the 70s. That sort of loyalty dies hard. It's worth noting that Gary Kelly (chairman, ex-CEO) was not an outsider. His fuel hedges cut Southwest a ton of operational slack. That slack meant there was no incentive to spend money on operational improvements. Bob Jordan's not an outsider either, he worked his way up the ranks from a code monkey to CEO. That means they both were fully invested in the cult of Herb, and both failed up. The excessively hands on recovery plan would've been manageable at a much smaller airline. From Southwest's little PR piece on Bob: During his more than three decades at Southwest, the airline grew from a regional presence with around 7,000 People and 90 airplanes to a beloved national brand with more 54,000 People and a Customer base that topped 130 million Passengers in 2019. Bob has been responsible for the delivery of many key Company initiatives, including executive oversight for development of the Southwest.com e-commerce platform, the revamp of the Rapid Rewards® loyalty program in 2011, the $3.2B acquisition and integration of AirTran Airways, the comprehensive "Heart" brand refresh in 2014, significant domestic and international network expansion, and the 2017 switch to a new reservations system. Tech struggles are nothing new for Southwest, rumor has it one of the big challenges they had with the expansion into Mexico was figuring out how to accept payments in non-USD.
tadfisher 4y ago
It's actually very easy to make these observations; it is not a controversial opinion that SWA has operational difficulties due to their outdated tech infrastructure. Think of it as a computation in NP, where the result can be verified in polynomial time, but we may not know of a polynomial algorithm to compute it. The reason CEOs are paid so much is because they are tasked with the hard part of that problem; e.g. they have to find an operational strategy to create profit in a complex parameter space.