Hall of Fame speaker and business growth specialist, Jeff Blackman interviewed Howard Putnam which appeared on Jeff’s Results Report. Check out the interview below:
It’s somewhat ironic, that one of the most down-to-earth guys I know, spent his professional career up in the clouds. Literally!
Yet, perhaps it’s that sense of being grounded, that enabled Howard Putnam to pursue and achieve such lofty goals.
While you might not know Howard’s name or the quality of his work, there’s a pretty good chance his decisions had a direct impact upon you, your family, friends and co-workers. Especially, if you traveled by air.
Howard spent twenty years at United Airlines. His final position was as Group VP Marketing. He was also the CEO at Southwest Airlines, as well as, CEO and Chairman of Braniff International.
Howard was the first airline CEO to take a major airline into, through and out of chapter 11. Successfully.
Today, Howard is an extremely successful speaker and author, (The Winds of Turbulence.)
Here are excerpts from our conversation about life, business, values, leadership, and the always entertaining, Herb Kelleher, co-founder, Chairman Emeritus and former CEO of Southwest.
Jeff Blackman: What lessons did you learn at the airlines, that are applicable to any size business?
Howard Putnam: A clear succinct vision is critical. Not a motherhood statement, but down to earth words that tell all your stakeholders where you’re going.
Next, understand what business you’re really in. Not just the product or service, but the ultimate value and experience you provide. At Southwest we figured-out we were not an airline, we were in mass transportation.
Then develop a strong culture, hire attitudes and develop skills to support the vision and business. As CEO, it was my responsibility to drive the vision into the fabric of the organization. One person at a time. Until everyone believed it and executed it every day. It was extremely important for Southwest. It works in every business.
JB: What does Southwest know, that other businesses don’t?
HP: Most businesses know it, they just don’t believe in it. Southwest treats their people and families as #1. If you do that, your employees will treat your customers as #1.
It’s so simple, but most businesses don’t get it. The bottom line will then be the beneficiary, as will your investors. That’s the most important ingredient, your people. After that, comes high productivity, simplicity, low costs and strong, ethical leadership.
JB: How can a business or individual use “turbulence” to their advantage?
HP: Every individual and every business go through stages of turbulence. Very few days are in the “Alpha State” we all strive for, i.e., blue skies, good health, profitable, no problems.
The next state is “Beta.” When we wrote The Winds of Turbulence, Dr. Don Beck guided me through the turbulence. Beta is flying through a few thunderstorms, handling production or delivery problems, a slowdown in profitability, new competition, etc. Not a life threatening stage, if you’re proactive and move to the “Flex” stage.
The key is to make turbulence work for you and not against you. That’s the “Flex” stage. It’s the opportunity to induce change quickly and get out of Beta, back into Alpha. But you have to be nimble. And be willing to make the changes.
If you don’t, you may go to the worst state of turbulence, “Gamma.” That’s the pits, the bottom. Could even be bankruptcy or the end of your business. Alcoholics and workaholics end up in “Gamma.”
You may have the opportunity for a restart in “Gamma,” but it’s painful, costly and tough to recover. We were able to bring Braniff out of “Gamma” (chapter 11) and flying again in a “New Alpha” state, as a smaller, leaner company with a clear vision.
JB: What are some simple strategies any business can implement, to cut costs, without sacrificing customer service or quality?
HP: Quality and low costs are not mutually exclusive. You can have both. We made the decision early on at Southwest to be a one business company, mass transportation, with one kind of airplane, the Boeing 737. Simplicity on parts and all pilots can fly every airplane, it minimizes training costs.
We never chased two rabbits. If you do, you won’t catch either one. You have to focus on process and be obsessed with it. How can we save a minute on the ground? How can we save 50 gallons of jet fuel? Maybe taxi on one engine. How can we keep the fares simple and shorten the length of phone calls to increase productivity.
Southwest has a very successful profit-sharing plan for “all employees.” It’s a powerful motivator to encourage everyone to be looking for the “small” stuff to cut costs and increase profitability. The big stuff we can all see. It’s the small unnoticed areas where there’s gold to be mined. Listen to what employees and customers suggest.
Investigate. Take action. Follow-up. Say thank you. Reward.
JB: Tell me about the role of “fun” in success, and how it can be introduced/ enhanced in one’s business…
HP: It has been key to Southwest’s success. It started with the flight attendants and customer service agents. They were extroverts, with great personalities and senses of humor. They loved to have fun.
Then you had a management team who enjoyed fun as well. It was encouraged and still is. We developed a personality profile of the ingredients that include fun, and it’s still used today to hire in all categories.
If you want to change a culture that has been stiff and stodgy and now wants to lighten up, it has to start with the CEO. It won’t happen quickly. And it’s a strategy or initiative that has to grow with everyone’s support. It only happens, when you hire the right attitudes to match your business, and management supports it.
JB: How is “flat” better than “fat?”
HP: Bureaucracies breed inefficiencies, higher costs and diminished profits. They are “fat.” More largess than you need or can afford. Senior management egos often are the culprit and the beginning of “fat.” Getting out of your niche is another.
Flat organizations are flexible. They have few layers of management. Simplicity is stressed. Complexity is constantly being removed. The structure is “flow” and fluid. The structure of the organization follows the strategy. Not the reverse. Silos are discouraged and torn down. Everyone works as a team, not independent departments or divisions.
JB: So how do you eliminate a company’s bureaucracies?
HP: Eliminate the CEO and management who created it! That may come through a buyout, or a crisis, or a board of directors with the fortitude to clean house.
JB: While Moses had his “Ten Commandments,” so do you…
HP: My core beliefs for leadership center around the following:
– Care about your people
– Hire the right people.
– Listen to your people
– Keep things simple
– Have balance in your life
– Help others understand balance in their lives too, with their families and work
My ten leadership attributes are:
1. Honesty and integrity
2. Passion
3. Vision
4. Excellent listening
5. No arrogance, ego or exclusion
6. Embrace change
7. International mentality
8. Grasp for value of technology
9. Continuing education and mentoring
10. Be a team-builder with flexible-thinking
A friend suggested an eleventh, compassion.
JB: What was it like working at Southwest with Herb Kelleher? What lessons did he teach you?
HP: Herb is an icon in the aviation industry. He’s an attorney by trade and a very strategic thinker. His passion for Southwest was 24/7.
He’s a funny man, loves to party and his people love him. I’m an early-riser, he’s a late-nighter. I finally told him when I was CEO, “Herb, I’ll work the day shift, you work the night shift. I can’t do both!”
Herb taught me a lot about involving your board members and utilizing their expertise and experiences. He also is excellent in community, governmental and legal relationships. I never saw him negotiate anything, where he didn’t walk away arm-in-arm with his opponent. Quite a compliment.
JB: What’s the funniest experience you had with Herb?
HP: We were on Wall Street, meeting with analysts, trying to set the stage for an equity offering. Herb and I were contrarians. We didn’t do business like American or United. We gave away drinks in the daytime as the flights were short, mainly had business travelers, and it was easier to give them away than collect and account for cash.
One analyst thought that was a waste of revenue and asked me, “How many free drinks could you get flying from Dallas to Houston in 55 minutes?”
I said, “The record is seven Jack Daniels and water. Held by our Chairman, Herb.” I just made it up on the spot. Herb immediately responded, “Howard, you sure it was seven? I thought I had eight!”
For more smooth flying, make sure your flight-plan includes a visit to howardputnam.com.
Howard Putnam speaks on leadership, change, transformation, customer service, teams and ethics. He is the former CEO of Southwest Airlines and the first CEO to take a major airline, Braniff International, into, through and out of Chapter 11, getting it flying again in less than two years.
