BBG: Southwest crisis reveals clubby world of airline leaders

Way out of crisis

BLOOMBERG reports:

The operational chaos that engulfed Southwest Airlines Co. over the busy holiday period was a crisis decades in the making.

In the aftermath of a meltdown that led to 16,700 flight cancellations and may cost the airline more than $800 million, blame has fallen on an outmoded crew scheduling system and an unusual point-to-point route network. Southwest was overwhelmed and unable to adapt as a severe storm swept the US.

But behind those specific issues is an insular management team that critics say lacks the imagination and technology expertise to help avoid such crises. While the bootstrap culture instilled by co-founder Herb Kelleher turned Southwest into one of the nation’s largest carriers, the size of the company now demands new ways of thinking and investment in innovation.

“It makes you wonder if there isn’t sort of a correlation or cause and effect here, where you’ve got a fairly entrenched, stagnant board, a grow-your-own leadership team since it was a very small, scrappy airline,” said Keith Meyer, global leader of the CEO and board practice at executive search firm Allegis Partners. “A founder-based culture can only take it so far.”

Southwest is full of lifers. Bob Jordan, who took over as chief executive officer in February, has been with the airline 34 years. The chief financial officer and communications chief have each worked there 30 years, while the chief commercial and chief legal officers have been around at least 20. The closest to a newbie among Southwest’s top management might be Chief Operating Officer Andrew Watterson, who joined a decade ago from Hawaiian Airlines.

Jordan doesn’t see it as a problem…

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