Southwest Airlines

Section: inside out

Enterprise and Southwest have created cultures where the emphasis on taking care of people is substantive and universal — and remarkably successful

What does it really take to build a culture based on profound trust? More important, why does it matter? Any organization that hasn't grappled with those questions in recent years has been either out to lunch or under a rock. The bottom line is, without trust, every day is a struggle filled with anxiety and uncertainly. With trust, virtually any obstacle can be overcome and extraordinary things can happen.

Two companies that have cracked the code and demonstrated how a substantive, people-first strategy can affect performance are Southwest Airlines and Enterprise Rent-A-Car. Both companies had big hills to climb when they first came on the scene. Enterprise started out as a speck on a windshield compared with Hertz and other car-rental companies, and Southwest was barely a blip on the aviation radar screen dominated by giants such as American, Delta and TWA. Today, both companies are the gold standard for performance and profitability. Not coincidentally, they also have the highest customer-satisfaction ratings in their respective industries, underscoring their core philosophy that a commitment to people — both inside and outside the company — can produce a big bottom-line payoff.

"Southwest Airlines did not set out to become the world's biggest airline," says Ginger Hardage, senior vice president of culture and communications. "But by putting employees first, we have, in fact, become the largesr airline, at least in terms of the number of passengers we carry. It means a lot to us that more people are 'free to fly about the country' because we make it affordable for them to do so." Even with its celebrated low fares, Southwest is still the most profitable company in the airline industry.

The financial performance of Enterprise Rent-A-Car is similarly impressive. "People sometimes call us the...