Wired looks into Southwest’s success

It’s always funny when non-business publications decide to analyze successful companies. Not because these non-business publications are (always) wrong in their analysis, but rather because they believe that no one else has come to these realizations before.

Case in point: Wired has decided it would be timely to inform its readers about Southwest Airlines’ Seven Secrets for Success.

Not a terrible idea, and the Seven Secrets they list aren’t wrong, it’s just that people have been writing about Southwest’s success for…oh…about the last twenty years or so.

It’s so bad, in fact, that I have a Southwest moratorium in the business classes I teach. I feel it’s frankly irresponsible, and just sort of lame, for me to talk about SW at this point. There literally is no intro to business or management text which doesn’t use SW as a case study. (By the way, a similar moratorium is soon to be imposed on Apple).

Again, Wired isn’t wrong, it’s just so oddly out of time that it caught my attention.

Also, here’s another quick business lesson. Wired could have greatly shortened their article and simply called it “Southwest Airlines’ One Rule for Success,” and included just this:

Strong Management
The public face of Southwest Airlines for a generation, hard-drinking, chain-smoking, always-leave-’em laughing Herb Kelleher, finally stepped away from the carrier earlier this year. Kelleher’s bonhomie masked the discipline that Southwest has had throughout its history. The airline has always avoided fads and eschewed anything that increased costs or complicated the basic travel proposition. When it has changed—last year it ended its infamous cattle-call boarding process to favor its most frequent fliers and highest-fare customers—it has done so without slowing down the movement of aircraft. Management ranks are lean, but well compensated and, most importantly, productive. I once calculated that the top executives of Southwest generated 10 times more revenue per dollar of compensation than did the C-suite types at some of the network carriers.

As anyone who has studied any business knows, all companies live or die/succeed or fail because of one thing, and one thing only: Good Management.

Perhaps that can be a Wired article twenty years from now, or so.


Last, I’d say that this type of coverage may very well be the type of thing that signals SW’s demise. Here’s SW’s (LUV) yearly chart:

Certainly better than the other airlines, but, really, not so great. Let’s see how it goes from here. Watch this space.

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  1. Swing Trading’s avatar

    Interesting post. I have made a twitter post about this. Hope others find it as interesting as I did.



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