![]() ![]() The company knows exactly what it is and what it isn’t. Southwest ignores the high-end travel market and focuses on a low cost strategy. While there may be many ways to win, just choose one.A myopic focus on cutting costs would be a huge mistake long-term. For example, Southwest chooses to invest heavily in its employees and in ways to reduce fuel costs. Tradeoffs are inevitable, but should be deliberate.Poor alignment usually means that some parts of a system are destroying value that was created elsewhere. Good alignment is the best way to deliver disproportionate value and results (1 + 1 = 3). A good strategy is inherently well-aligned.I’m confident that Southwest will survive the 737 MAX 8 issue relatively unscathed, but the unfortunate events are a clear reminder that even brilliant strategies like Southwest’s are neither permanent nor invincible. But grounding 4% of your fleet is a big deal and Southwest is due to buy or acquire another 37 MAX 8s in 2019 and over 200 MAX 8s over the next 8 years. Neither crash was a Southwest flight.įortunately, Southwest only owned 31 MAX 8s as of (of a total fleet of 750). ![]() The March 10 crash of a 737 MAX 8 in Ethiopia (the second crash in 6 months of that model) and the subsequent grounding of the entire MAX 8 fleet worldwide is clear evidence of the risks of overly-tight alignment. For example, Boeing is Southwest’s sole supplier for aircraft and many parts. Southwest’s strategy is not, however, without its risks. This is obviously an incomplete list fo their activities, but it’s a starting place to illustrate the importance of alignment.Īs you can see visually, most of their activities reinforce one or several other activities, resulting in very high alignment. Now we can dig into their specific activities. ![]() Southwest’s vision is “to become the world’s most loved, most flown, and most profitable airline.” I’m assuming that they have clear internal definitions and KPIs for most loved and most flown. What’s the Goal?īefore digging into the alignment between Southwest’s activities, we need to know their objective. Remarkably, the company has been profitable for 46 consecutive years – which is completely unheard of in the airline industry.īTW, even if you don’t care for Southwest as a customer, the lessons from this company – especially around alignment – are quintessential for developing your own strategies. Over the past 5 decades, Southwest has delivered tens of billions in value to customers, employees, and shareholders. Growing up in Dallas, Southwest’s headquarters and home-base, I had a front row seat to the company’s incredible growth into its current position as the largest domestic air carrier in the US (by passengers boarded). The classic corporate example of great strategic alignment is Southwest Airlines. So if your goal is to win a race, then you should row synchronously. Further, when oars tangle – which can only happen during asynchronous rowing – someone is usually going for a swim. Alignment is what gives systems that 1 + 1 = 3 result and misalignment can bring systems to their knees.Ī strategy is a set of well-aligned activities with the aim of occupying a valuable position within a competitive landscape.įor example, synchronous rowing has been proven to be 8% faster than non-synchronous rowing. A key breakthrough I really grokked during one of my many silent strategy meditation retreats is that strategy is all about alignment – especially once you fully wrap your head around your goal, your resources, and the competitive landscape. ![]()
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