I recently chatted with a man who works for Southwest Airlines, a company widely known for its positive corporate culture . . . and its dramatic success. This man’s face lit up as he described the things that Herb Kelleher, Southwest’s founder, had done to create a culture that celebrates people and their successes. He said that he and his friends love working for Southwest. “It’s the quality of our leadership,” he told me; “if they were selling underwear, I would buy their underwear!”

He was being humorous, but the comment stuck with me. What creates that kind of passionate employee loyalty and respect? Would you say that Herb Kelleher introduced a business philosophy that is the root of which my friend’s enthusiasm is the fruit? Or does such a culture happen by chance?

It certainly didn’t happen by chance at Southwest. The company’s NASDAQ symbol is LUV, short for “Love.” All their airplanes are emblazoned with a heart symbol. And Southwest doesn’t talk about love for marketing copy; building a culture of love is part of the way they do business. Here’s how the company’s website explains their philosophy: “Happy Employees = Happy Customers. Happy Customers keep Southwest flying.” Southwest’s mission statement includes these words: “Employees will be provided the same concern, respect, and caring attitude within the organization that they are expected to share externally with every Southwest Customer.”

Southwest’s employees appreciate the investment that is made in them. The LUV company ranked #12 in Glassdoor.com’s 2013 Employees’ Choice Awards Best Place to Work. OK, so the company has a great culture, but does that translate into profitability? As a matter of fact, it does! Southwest recently announced its 40th consecutive year of profitability. Let that sink in for a minute: forty consecutive years . . . and that working in an industry that has been bludgeoned by skyrocketing fuel costs, terror threats, and economic malaise.

I have asserted for decades now that building a winning culture will translate into sustainable profitability. I tell business leaders, “Put people first and profits will follow.” Creating a work environment which causes employees to wake up in the morning saying, “Yay! I get to go to work”—rather than “Yuck! I’ve got to go to work!”—is not ancillary to success; it’s an integral component of it! Putting people first isn’t a “happy-clappy,” feel-good issue; it’s a matter of sound economic policy.

Let me explain. Economics is the science of human choice, necessitated by the circumstances of limited means. Choice presupposes preferences; preferences are the manifestations of one’s goals, motives, and means. Southwest Airlines has maintained 40 years of profitability because their customers prefer the Southwest experience—which is a clear reflection of the Southwest culture—and choose to book their flights with that airline.

We are the product of our preferences. Think of a person who is making a choice; what motivates that choice? Choice comes from a person’s preference, and our preferences are determined by what will satisfy our self-interest.

Now, when we hear the term self-interest, we frequently assume that it means selfishness, but that assumption is not always correct. If our self-interest includes the self-interest of others, we’re not being selfish. Dr. John Robbins explained this distinction in his magnificent book, Freedom and Capitalism:

What about the missionary? He acts in his self-interest by enduring hardships because he has a different conception of his interests from most people.

How about the mother? She acts in her own interest because her conception of her own interests includes the well-being of her children.[1]

Dr. Robbins was highlighting the truth that two people we might think of as acting selflessly—a missionary and a mother, both of whom are laboring for the good of others with little or no remuneration—are still acting in their self-interest. That’s because they have voluntarily expanded the realm of their self-interest to include the interests of others. They have freely chosen to embrace the ages-old exhortation, “Let no one seek his own, but each one the other’s well-being.”

In my next article, I’ll show you how this economic theory of putting people first works out in practice. I hope you’ll be back to read and comment!


 

[1] John W. Robbins, Freedom and Capitalism; Essays on Christian Politics and Economics (Unicoi, TN: The Trinity Foundation, © 2006), p. 417.