David - Your point #4 particularly resonated with me: "A greater social calling than keeping investors happy" This has been a bugaboo for me for years. I continue to believe two things on this:

1) That investors will be happy (i.e. get continued regular dividend cheques) if the employees are happy, because happy employees (i.e. those treated respectfully, given opportunities to grow and learn and enjoy what they do for hours a day) treat customers well, which naturally leads to more profits, which leads to bigger divident cheques.

2) Unfortunately, many companies mistakenly believe that they can get the results in #1 above by ruthlessly cutting costs and employees and treating the remaining staff as indentured slaves. They then profess shock and confusion when said employees either leave, or stay but behave as you discuss in the "other" airlines.

Even when you don't have shareholders, management often takes this same approach. I just don't get it, because I have yet to see this "treat employees like chess pieces on a board" approach generate huge success because unhappy, demoralized employees do unhappy, demoralized work.

I remember a 60 minutes story years ago about a tech company in CA where the owner (the sole owner) gave the company on-site "everything" daycare, health club, free cafeteria, amazing health benefits, you name it they got it. And when the reporter asked about all the offers he'd had to go public he said something to the effect: "If there were investors involved, they would probably want me to change some or all of these things, and that's what has made us so successful. I won't do that."

In their follow up months later they announced that following the story the company got thousands of applications. To me that says it all.

Kristen--

I agree that keeping employees happy and investors happy should not be mutually exclusive notions.

That said, I'm not sure all those employee benefits you laud are nearly as powerful as the four factors I mention, any ONE of which might be powerful enough to sustain a company with a half-decent business model.

That Southwest has a VERY good business model AND the rest of the stuff means that it doesn't NEED to offer employees backrubs and dry-cleaning.

I also don't know about "happy" employees as a criterion for corporate success. Nobody knows what "happiness" really is, in corporate life or personal life. Energized, engaged, unlikely to leave--these are more easily measured.

For instance, I can't imagine a baggage-handler at Southwest is whistling the day through like one of the Seven Dwarfs. But he or she is free to be him- or herself and has a measure of pride in telling friends and neighbors he works for Southwest, a company that helps regular people travel affordably. Where else is he or she gonna go to get all that?

David

No arguments with that.

And yet Southwest took your money for a seat and STILL gave that seat to someone else....

... yes, someone else who paid for a seat and had the life-management skills to show up more than 10 minutes before wheels-up.

On a different note: here's an article about Costco, which paid and treated its employees well, was growing like crazy, and still had stock analysts saying they should give employees less:

http://positivesharing.com/2007/07/analysts-to-costo-stop-treating-your-employees-so-well/

David:

Great post, but . . . . "Shadesters?" And this after a previous post where you referred to us as: "my Shadesy friends."

Are you trying to lump your loyal readers into one big group, like "Dittoheads" or those morons who call Sean Hannity's show and start with "You're a great American."

I don't want to belong to a club that would have me as a member.

Steve Crescenzo

Steve, you had me at Dittoheads.

When you're right, you're right. It's an awful sign of egotism to refer to one's readers, however lightheartedly, as anything but "readers."

As one who spends half his psychic energy trying to conceal my egotism, I will never, ever do this again, and I appreciate the advice.

Steve, you're a great American.

David:

Of course, this comes from someone who has a group on myragan.com called "Uncle Fester's Peeps."

But in my defense, I didn't decide to name it that. And I'm a tad bit embarassed by it.

But you're so right about Southwest. It is always a great experience.

With the other airlines (I fly mostly United) you CAN have those wonderful experiences. I've had plenty---including times where workers have waived fees, put me on flights for free, gotten me an aisle when the plane was full to the brim, got me on earlier flights, etc.

But that's because I'm a premier member, I think. And, I've had an equal number of horrible experiences.

The thing about Southwest that makes you believe their culture is true is the CONSISTENCY. it doesn't vary from worker to worker, from individual mood to individual mood.

It's always the same, and that's what makes it great.

Steve C.

Does this mean that when I end up as a ticket agent at Southwest I can let my natural PMS mood shine through? ("Well, if you had ANY life management skills, you wouldn't have FORCED me to give your ticket to someone else, and I wouldn't be CRYING in contrition now, and it's all YOUR fault, you DITTOHEAD SHADESTER YOU."

I think if you delivered that with a wink, you could work at Southwest. If you could not deliver it with a wink, you could be the CEO of United.