Most CEO's have a clear vision for their companies. They know where they’re going, and they know how they’re going to get there. But too often, they wind up some place else.
While many CEO’s can craft a killer vision statement, if the front-line, customer-facing employees don't get it, company results can fall far short of expectations.
The most successful companies in any industry consistently execute on their vision, regardless of the economy or market conditions. And they do it because that vision has been clearly communicated from the CEO throughout the organization, right down to each and every front-line employee.
One of those companies is Southwest Airlines, and I have a pretzel bag to prove it. More on that in a minute…
When Southwest began in 1967, their vision was “to become the low cost leader amongst the airlines.” Their original tag-line was “The speed of a plane at the price of a car.”
In the beginning, Southwest established a clear focus: friendly service, speed and frequent point-to-point departures.
To make their strategy work – especially “at the price of (travel by) a car,” Southwest would have to keep its operating costs low. That meant eliminating a lot of things that normally drive up costs for the traditional airline. Lower-than-industry-average costs, and higher than the industry-average service were two elements that had to be clearly communicated from the mind of founder and CEO Herb Kelleher to the minds and hearts of the people throughout the company, if this strategy was going to work.
Everyone had to have a crystal clear understanding of the vision and the strategy, and what they had to do, to make it happen. This is where communication normally breaks down within an organization – the CEO thinks it and speaks it, but between his words lose a lot of meaning, by the time they reach the people most responsible for making them a reality – the employees on the front lines.
Now, back to that pretzel bag…
A couple years ago, I was on an AirTran flight from Atlanta to Portland, Maine. As I was opening a bag of the official in-flight pretzels, I noticed the creative copy and printing on the pretzel bag. That custom-printed bag was memorable.
But custom-printed bags cost more money than generic bags.
Two weeks ago, I was eating another bag of pretzels on an AirTran flight. But this time, the thrill was gone. No more cool blue bag with the creative “Eating Instructions.” Instead, a generic pretzel bag that left me bored and thirsty.
I asked the flight attendant what happened to famous blue AirTran pretzel bags with the Eating Instructions. Her response was very telling:
“When AirTran was bought by Southwest last year, we stopped printing those bags as a way to save cost. Now that we’re part of Southwest, we keep costs lower so that we can continue to offer no-fee baggage, and lower fares.”
You had to be there to appreciate it – she explained it as though it were her own idea. That's probably because she felt like she owned it.
At 30,000 feet, while pouring a cup of coffee for another passenger, this AirTran flight attendant that was part of Southwest for less than a year, was already fluent in the Southwest culture and corporate strategy.
That’s what clear communication can do.
And when the front line employees have such a clear understanding of the corporate strategy that they can act it out unconsciously, it shows up in the bottom line:
According to Jim Collins’ new book, Thriving in Uncertainty, $10,000 invested in Southwest in 1972 would be worth nearly $12 million by the end of 2002. That’s a performance better than GE, Intel, Wal-Mart and Disney.
That's also what clear communication can do.
How clearly is the strategic vision communicated within your company? Can every employee explain it in their own words? Can they explain how their actions contribute to fulfilling that vision on a daily basis? What if a customer asked one of your employees a question about your "pretzel bags?" Would the employee know the answer, and "own" the answer?
When CEO Herb Kelleher communicates, his employees hear and own the vision.