Table of Contents
Table of Contents..................................................................................................2
Southwest Airlines’ Simple Formula ....................................................................3
Business Model Key Elements.................................................................................................3
SWAir Success = Dedication to Operations Excellence..........................................................4
The “New” SWAir Offering for Customers Changed Everything...........................5
How does SWAir Compare to Good to Great Companies? ....................................................6
The Two Dilemmas Centered Around Master Doers............................................9
Unbalanced Supply of Support visa vie Operations.................................................................9
Getting “Master Doers” in Right Jobs.....................................................................................10
The Strategy Going Forward...............................................................................13
Stage One: ............................................................................................................................14
Stage Two: ............................................................................................................................14
Stage Three: ..........................................................................................................................15
Southwest Airlines’ Simple Formula
Southwest Airlinesi (SWAir) is the undisputed 37 year old airline industry leader, but what business
formula (strategic choices) helps SWAir sustain this advantage? How do they stay on top – even
during the toughest of times?
Herb Kelleher, one of the founders of SWAir, established the primary elements for their success
through two decisions. First, he hired operations leaders who were “master doers” in their field and
gave them the power to make all choices for how things would work day to day with customers.
Second Kelleher challenged this team to complete a four plane route schedule with only three planes
because they had to sell the fourth plane in order to keep three others in the air.
The end result was simple but elegant. When deciding how to make 3 planes fill a 4 plane schedule –
things had to conform to a simple rule: less time on the ground – more time in the air, where they make
money. That translated into a 10 minute turnaround, which results in an added flight per day per plane
compared to industry standards. And that enables SWAir to generate profits with consistently lower
prices per ticket, which passengers love.
Business Model Key Elements
The SWAir business formula has 4 factors: One unique Offeringii produced and delivered around a
Pivot Pointiii aimed at two Targeted Customer Groups that define two separate but complementary
Entitiesiv (customer target and Offering defines an Entity; see footnotes on Page 15).
1. One Unique Offering: details for all the elements included in SWAir Offering are, almost without
exception major departures from industry standards set by competitors. (See details Page 4)
2. Two Target Customer Groups: First targeted customer group: down town based business men
traveling by automobile to 3 other cities. Second targeted group: Weekend pleasure travelers.
3. One Unifying Pivot Point: 10 minute turnaround is a central factor forcing operations personnel
and customers to both act in new ways so 3 planes can do the work of 4.
4. Two Complementary Entities, which were a combination of 3 things:
a. Specific targeted customer group; 2. Offering tailored to customer target; and 3.
Operations ability to make 10 minute turnarounds happen consistently.
b. Downtown business customers kept planes full during weekdays by saving travel time
to and from their destinations, usually with return same day trips.
c. Within a year, SWAir added Peanut Fares for pleasure seeking customers that filled
planes to same destinations for “fun” trips on weekends.
d. Result: Two different “Entities” based on distinctly separate customer motivations,
each with a tailored Offering but same Master Doer Operations teams creating and
delivering consistent and reliable services.
e. Best Outcome: Full planes – 7 days a week operating at a profit.
SWAir Success = Dedication to Operations Excellence
Southwest business formula was created, perfected and is still successfully practiced by
SWAir today through two types of leadership.
First: “Master Doers” in Operations: The Master Doer leaders and day-to-day operations
employees know what they have to do for Pivot Point turns (now 25 minutes long). These folks are
dedicated to operations excellence as they get it done very well as a daily routine for every plane,
every stop, every time – at every airport with no exceptions - while “fixing” what’s not working to avoid
any serious delays. Consistency in operations is crucial to successful outcomes between customers
Second: Top Leadership Dedication to Operations Excellence: Top leaders at SWAir understand
the need to protect a Pivot Point focus as the central strategic element that drives the business model
success. Their focus is to keep things simple, especially for operations folks as they provide all the
services that routinely take care of customers. Together with Master Doers, top leaders foster an
overall Guiding Principle: DO NOT ALLOW anyone to complicate any of the Offerings for customers
where it makes life tougher for Operations, like
doing special meals. It will unravel the Pivot Top Leaders Charge to Master Doers:
Consistency in operations is crucial to
The Pivot Point focus also requires all support successful outcomes for customers so
functions like IT, finance, HR, accounting, they repeat and recommend that others
legal, marketing, PR, administration, etc. to
protect Operations from any unnecessary
buy and fly.
complications. But how does this work within
Support functions must follow a very simple rule: do not lengthen the Pivot Point turn time unless it is
required by legal mandate. For example, if IT or HR or anyone had an idea for new systems that
added time to the boarding process, they should and likely would say “Stop!! This is going in the wrong
direction!” We need to rethink this idea so it lessens time boarding, not lengthens it because any ideas
that complicate Operations can extend Pivot Point time. And that will eat away at profits and
diminishes competitive advantage.
The upshot is pretty simple as well. First all the different support groups (HR, finance, IT, marketing,
legal, etc.) must begin working closer together. The normal old ways of each separately taking their
ideas for improvements to operations will complicate life for everyone. Now they need to plan together
first and then with operations to make sure any changes being contemplated are consistent with
maintaining or improving the Pivot Point turn time with every plane. So while all SWAir employees
have one simple mantra they talk about: customer services, in reality they are protecting the consistent
delivery of services, which is the Pivot Point turnaround time.
This puts everyone on the same page all working for one simple goal. And it creates profits because
the basic formula works to keep prices low but productivity per employee very high. And that means
customers return again and again and recommend that others join them by flying SWAir, which grows
the customer base, revenues and profits.
The “ New” SWAir Offering for Customers Changed
The first requirement by “master doer” operations leaders at SWAir was to devise new ways to work
with passengers. The result was a new set of “passenger rules” that broke all the existing airline
industry rules. Today this totally new approach is well accepted by most air travelers. But when SWAir
started out making passengers do all the things involved with SWAIR Offerings it was a major
departure from norms of the industry that many “traditional” passengers resisted for quite some time.
1. All routes are point to point trips from older down town airports.
2. All flight reservations are made directly with SWAIR – no travel agents.
3. Simple point to point pricing for all tickets allows passengers to carry forward credit on missed
flights – good for full value in next 12 months with no penalties or added reissue changes.
4. One type of aircraft – Boeing 737 – no exceptions (learn it once – parts, repairs, handling
equipment, storage, etc., then repeat and improve solutions over time).
5. No interchange of luggage with other airlines.
6. No frills or hot meals – only snacks and drinks.
7. No pre-assigned seat selection system – open seating governed by when each passenger
“checks in” to obtain a boarding pass.
8. More operations “managers” than any other airline by nearly double. These are working
managers without offices, stationed “on the line” in airports working shoulder to shoulder with
subordinates solving daily operations / implementation / customer issues.
9. In all operations areas, there are clear team goals, measures of success, feedback sessions on
performance and team rules for how to meet or beat the 25 minute turnaround goal with planes
and passengers. The lists below include the operational functions and team requirements for
SWAir has Ten Team Practices SWAir has 12 Distinct Operations Functions
Leadership with credibility and caring Pilots
Investing in frontline leadership Flight Attendants
Hiring and training for relational competence Gate Agents
Using conflicts to build relationships Ticketing Agents
Bridging the work / family divide Operations Agents
Creating boundary spanners Ramp Agents
Measuring performance broadly Baggage Transfer Agents
Keeping jobs flexible at the boundaries Cargo Agents
Establishing partnerships with unions Mechanics
Building partnerships with suppliers Fuelers
10. All non-operations functions like IT, HR, legal and finance / accounting are designed to keep
things simple and support the 25 minute Pivot Point goal without exceptions. Which means
operations choices trump support function choices in nearly all cases unless support makes
operations more productive.
11. This unique operations focus allows SWAir to have consistently low ticket prices and profits
every year due to very high worker productivity
Summary: The common thread through all SWAIR choices in operations is simplicity and control – led
by personnel we describe as “master doers”. They are high performance folks who see a bigger
picture and make the “right stuff” happen between customers and operations. Who makes sure the
“master doers” are in charge? Top management at
SWAir sees their function as supporting and reinforcing Master Doers’ Choices in Operations:
the ability of “master doers” to make strategic choices They changed everything to make
that help everyone keep the Pivot Point goal of 25
minute turns per plane as top of mind every time a plane
the “right stuff” happen ….between
lands and takes off. Operations and Customers.
How does SWAir Compare to Good
to Great Companies?
The SWAir story in many ways mirrors what happened in the 11 companies profiled by Collins in Good
to Greatv. Each top leader selected members of their operations and support teams (Master Doers)
that met regularly to discuss how to handle and solve problems and challenges. These select leaders
were on what Collins called “the Council”, which we describe as the Workplace Architect Forum. Their
interaction with each other and the top leaders allowed them to refine the overall focus for these 11
companies into what Collins called the Hedgehog. In our view, 9 of the 11 greats also had Pivot Points,
which is a much more refined quantitative goal around which to organize everything.
What’s different in most organizations today – compared to SWAir or Good to Great companies at their
peak of performance? In too many cases, “master doers” who are working to make things happen
successfully between operations and customers have lost their voice at the top management decision
table. In many organizations their power has been significantly reduced or eliminated through
decisions to outsource part or all of operations. And those remaining in operations are usually handed
“strategies” set forth in financially
focused bottom line oriented, top Master Doers NO LONGER Representing
down run organizations. Customers: In too many cases both Master
In this “professional” system Doers & the Customers they represent have
consistency of operational little or no voice at the top level decision
excellence may suffer because a table, all in the name of short term profits.
clear Pivot Point is not visible and
agreed upon as the driving force for
successful outcomes by customers interacting with operations. Without an agreed upon customer
focused Offering as the operations goal, any other goal can become the compelling one – no matter
how impossible to achieve on a consistent basis. The challenges to remaining “master doers” are
quite clear since the necessary resources are not defined by what they require to implement consistent
operationally sound practices. Instead those in charge of operations are asked to “make it work” to the
best of their abilities, which are usually not even close to Peak Performance levels like SWAir.
Success stories like Wal-Mart, P&G, IBM, Apple and Google exemplify the power of “master doers” to
drive successful outcomes. These organizations have grown, promoted and protected their “master
doers” on a consistent basis. Competitors have targeted hiring them away to boost results but normally
with minimal success due to lack of proper support and focus on Pivot Points.
The overwhelming success in these companies arises from the interaction between customers and
operations that is directed and managed by master doers as they define a global Pivot Point that all
can agree is compelling for successful outcomes, including bottom line financial rewards. Top leaders
in highly successful organizations routinely interact with “master doers” in identifying and then
protecting and improving the Pivot Points by keeping things simple. And top leaders continue to stay
grounded in reality by knowing and communicating with “master doers” as the key players who define
and deliver value to customers. The secret is that their customers are willing to return regularly plus
recommend that others buy and use, which grows the customer base.
So what if resources devoted to master doers” and operations decline while numbers of people and
jobs in support tends to grow? And they lack an agreed on Pivot Point? There is a critical need for
leaders to understand the implications from rapid growth in support functions like HR, finance, IT,
legal, etc and proportional loss of people and power by operations and Master Doers. Successful
operations must deliver consistently high quality Offerings for customers based on having the right
resources. The next section explores interactions between support, operations, master doers and
Pivot Point business models with a recommended process to improve things at your organization, no
matter where it stands today.
Balance the Equations: What is E = MC2 at your organization?
Master Doers – Backbone of the Total Organization
If Master Doers are the most critical members of the total workforce, then those they work to serve, the
customers are the most important people for the total organization. The majority of Master Doers are
found in the Operations side of organizations, irrespective of the types of organizations. That means in
service organizations the Master Doers are those
Master Doers in Charge of Operations:
doing the services and “touching” customers in dental
and physicians’ offices, call centers or where ever Highly dependable leaders with deep,
rich experience bases that “get the right
A crucial question facing any organization is the things done” almost without fail, no
number, age and skill levels of their Master Doer class matter the circumstances
of workers. Why? Because this group of workers
performs best when they have a major hand in
defining and implementing the value chain that
creates, sells, produces and delivers outputs for customers to buy and use. A strategic leadership
issue is the number and placement of Master Doers across the total organization as discussed in
Good to Great. Answering the questions of whether there are enough Master Doers in the right jobs
where they can make the best contributions in creating and delivering value to customers is a
leadership issue of highest importance.
When an imbalance of too much Support compared to Operations begins to gain momentum, the first
casualties are usually the Master Doers in Operations. Why? Because the Support folks typically have
limited personal experiences in Operations so they are uninitiated in the complexities and challenges
faced in day to day efforts to keep things flowing smoothly.
An important truism in Operations: Things are never without some type of challenge or difficulty.
NEVER. So when Support people ask Operations folks to tell them what’s needed to get things
running perfectly in Operations and the answer is NEVER going to happen, Support folks don’t seem
to understand or accept this answer. Why can’t it just be “fixed” so it runs like it should most of the time
ask the Support folks? The level of inexperience among Support is what makes Operations folks even
more uneasy, because from an Operations point of view, NEVER running perfect is the norm not the
Because the changes that face Operations arise from a multitude of sources, but principally from
outside factors that are totally beyond their control. It includes things and situations with competitors
that get a new advantage with products or services and existing and prospective customers that want
to change what they buy. Include changes by suppliers, new product changes, trade changes and
unexpected things like oil leaks, volcano eruptions, currency crises, banking collapses, commodity
price changes, etc where the ability to control these factors is non existent and you see why NEVER
running perfectly in operations is the right answer. Organizational Assessment: Specify
Operations and Support Separately:
Rapid adaptations and adjustments are the cure that
works, which is provided by Master Doers. That’s Operations folks “touch” customers
why they are the most important people in the most
with their work; Support folks help
Operations but don’t “touch”
An initiative to improve the effectiveness in your customers directly.
organization works best if you can complete a “global”
view of your division or the total organization. You start
by identifying two pieces: Operations and Support functions. The second task is to create a process
flow chart that shows how the value chain within Operations works to create, produce, sell and post
sale support the outputs sold to customers. A third task is to identify all the Master Doer class of
employees. Then place them onto the process flow chart that shows where each one fits into the value
chain as they create value for customers. Finally a documentation process that defines how Master
Doers communicate with each other as they work to overcome barriers and keep things running to
fulfill customer orders will complete the “global” view.
The value flow chart is designed to separate the work in Operations from Support so the Master Doers
in each group can be identified, located by function and position and selected ones interviewed.
Specific jobs that Master Doers complete and how those jobs are connected to each other needs to be
identified and diagrammed based on how things actually work day to day. This exercise shows why
most traditional organization charts provide little insight into how things happen in the real work flows
that are followed day to day. When doing the value chain diagrams it needs to show the different types
of communications connections between and among the Master Doers as they tackle and solve
different types of barriers and issues.
These highly capable “doers” are the backbone for the value creation process and need to have open
and honest exchanges on what’s happening that impedes progress. As they discuss ways to “fix” the
problems and keep track of what’s been done, it’s important to recognize that most of these “fixes” are
kept in the personal experience base of Master Doers. As long as they have this role and continue to
fulfill the job of helping “make things happen” as a daily routine, operations will continue to “work fine”.
BUT, if or when they are not involved and others don’t have their background and knowledge it’s easy
to see why lesser choices are made until a new Master Doer can be established by “fixing” new
Keeping politics and other disruptions from interfering with decisions and actions that optimize value to
customers is what Master Doers do best. They identify roadblocks and solve problems that would
otherwise impede progress in implementing solutions that work. This is especially important for
keeping Operations on a highly successful track of creating revenues at the lowest possible costs.
There is another level of investigation that can be helpful
in making more rapid progress toward discovery of a Oversupply of support creates its own
Pivot Point and improving outcomes. In most highly demand, which interrupts operations and
successful organizations there will be one key position
or function that holds sway over most or all aspects increases costs.
within Operations. For example, the Principal in the K –
12 educational systems or the airport operations manager for SWAirlines or the leaders of major
residential real estate offices are the key value chain creators in each organization. If this key
individual is not a Master Doer of the highest level of achievement they will not function at the highest
levels as a decision maker for the teams reporting to them. Why? The day to day work done when
completing these jobs is complex and ever changing at least on a day to day if not on an hour by hour
basis. That means the job holder must have established decision guidelines for all subordinates that
adjust according to changing circumstances in order to achieve the best outcomes for customers,
whether students, passengers or buyers / sellers of residential properties.
The ways Master Doers are organized around the lead person in the key Operations position helps
determine the speed and quality of choices made along the value creation process that has been
diagrammed and detailed. How well the customer needs have been assessed and then fulfilled
obviously determines the levels of satisfaction, which drives their return purchases plus
recommendations that others buy and use the Offering. Ultimately that’s the final threshold to cross
successfully: have buyers and end users return and recommend that others buy and use, which is how
a customer base grows and the sellers thrive.
The Two Dilemmas Centered Around Master Doers
Most organizations find themselves facing two major dilemmas. The first is the proper allocation of
Support resources and funding relative to the size and types of Operations they serve. The second
dilemma is obtaining and then maintaining an adequate number and mix of Master Doers that assures
Operations can and will know and meet customer needs with consistent high quality of Offerings.
Unbalanced Supply of Support visa vie Operations
All too often senior management has increased the scope of Support to a level where it diminishes
value received by Operations. In fairness when leaders ask, “What is the right amount of resource
needed to provide proper levels of support to operations?” there is no a simple answer. However, we
strongly believe that….
An oversupply of support creates its own demand, where requests and requirements from
support begin interfering with operations abilities to get the right stuff done. That can
complicate things and lead to higher costs.
A different dilemma occurs when an inadequate supply of support forces operations to “fly blind”
without sufficient data to guide them, which in turn leads to higher costs. In some organizations
support has not grown fast enough to keep up with what’s needed, creating a partial vacuum where
requests and requirements from operations are not properly completed.
Establishing and maintaining a proper balance between supply and demand for support to meet and
exceed needs for help by operations is a complex task that is never quite right. However, the answer
seems clear: establish a “master doers” team that interacts with top leaders to identify a workable
common goal as the Pivot Point. Based on a single target, the balance of resources between
operations and support becomes a dynamic process that always tends toward a proper “direction” by
increasing or diminishing resources devoted to each, given needs from operations to consistently
provide Offerings to customers that meet the Pivot Point goal.
Getting “ Master Doers” in Right Jobs
The second dilemma is focused on getting the right numbers of “master doers” into the right jobs.
When there is an oversupply of “master doers” it will normally take care of itself, as the excess will find
other pursuits within or outside their current organization. “Master doers” are the type of persons that
solve problems to make the right things happen because they have these tendencies woven deep
within their personality. They respect each other and can sense when their skills are not fully engaged,
which leads them to search out other options to apply their talents.
But when there aren’t enough “master doers” to provide leadership and problem-solving talent it leaves
both operations and support teams without sufficient capabilities to guide them. In turn the
organizational gap will usually result in lower productivity and higher costs.
General Guiding Principle:
Anytime an organization has a scarcity of “master doers” within any major function for
whatever reason, all aspects of productivity and performance will be lowered.
The causes for the inadequate numbers of “master doers” need to be addressed and fixed or lesser
results will continue unabated. Similar to the first dilemma, establishing and maintaining a proper
balance between supply and demand of “master doers” required to meet and fulfill the numbers
needed in the right jobs to achieve operations excellence (Peak Performance) in an organization is a
complex task that is never quite “right”. Again the answer seems clear: a team of “master doers”
routinely meets with top leaders to first identify and then regularly achieve a workable common goal as
the Pivot Point. Using this common goal as a single target, the teams’ ongoing ability to gain
operations excellence with the right numbers of “master doers” plus employees in the right jobs
becomes a dynamic process that always tends toward the right “direction.” There is a natural
tendency toward having enough “master doers” to consistently fulfill the Pivot Point goal.
When working to establish a powerful Pivot Point business model for your organization, determining
proper interaction between the supply of support, the numbers of “master doers” and jobs they
currently occupy in operations is a first order decision.
If an oversupply of support is at play, it will usually drive out some of the “master doer” class of folks in
operations. Why? Because life is short, and master doers have many different options for other
positions in most cases. When master doers are without upper level help and intervention, the support
folks will usually get their way. And when support drives changes without agreement from operations,
efforts to make changes happen also get in the way of operations getting their “regular” work done.
But why have resources been shifted into support at the expense of operations? Why are folks doing
work that is “touching” customers and creating value being laid off and shrunk relative to those in
finance, marketing, PR, IT, HR and other support roles that are increased? In our experience with
many different situations, support has definitely been “winning” more of these decisions than
operations in recent times. Why? Because they are usually more capable of “selling” their point of view
to decision makers, who have in most cases a support function background. Operations types have
been relegated to lesser positions in part because they are always “tied to the hassle of getting things
done” that meet or exceed customer requirements. That includes sales, advertising, production,
distribution and after sale customer care.
So when is everything operating without any
problems in the operations world? Never – Scarcity of “Master Doers” of any type:
because of the nature of this work it’s never
without problems and hassles of one type or
Too few within any major function for what
another. Yes there can be hassles in support ever reason, all productivity and
functions like IT when computer systems fail performance will be lowered.
or invoices get mixed up due to improper
programming changes. But for the most part,
support is very routine and stable compared to
most day to day operations groups. And this stability allows for fewer sleepless nights and more ability
to concentrate on making incremental improvements as a routine matter. And these differences in day
to day challenges are part of why support teams tend to view operations as an ongoing train wreck that
needs to get “fixed”. And as smart and capable folks, support usually has many different ways to
make changes they believe will solve many of the core problems and thereby make things in
operations run smoother.
The most negative fallout from a shift to support as the more important function is the
recurring loss of master doer class in the workforce.
In the complexity of identifying and solving the many unforeseen operations problems, no one excels
like a master doer. And few things frustrate them more than “outsider” support folks who try imposing
uninvited complex ways to meet and solve the unexpected things that keep disrupting throughputs in
operations. That’s why master doers at SWAir have kept things simple and focused on the Pivot Point.
It’s also why the master doers in 11 great companies kept pressing for changes leading them toward
the Hedgehog (simplify, make routine and streamline), which also lessens chances for unexpected
problems and issues to intervene.
Ergo – one solution for both dilemmas: discover the Pivot Point as a single goal for everyone to
know and work to achieve every day.
In order to uncover a Pivot Point and build the systems around this overall goal, an organization must
begin to protect and grow the master doer class in all areas. This process starts when top leaders
make a decision, name and work closely with a small master doer team dedicated to the goal of
defining a Pivot Point. As this effort evolves, all aspects of the workforce will begin to unify around a
very simple Pivot Point business model like the 25 minute turn at SWAir. It’s a goal that all can see and
embrace when doing their part in making it happen every day.
The SWAir story helps highlight both dilemmas and provides guidance on potential answers. Consider
the “Support to Operations Dilemma” first. A leader in Operations faces a threefold level of complexity
when getting help from support. After asking for help and then coordinating improvement efforts, at the
same time he must manage across his value chain ensuring alignment and cohesiveness. One job is
focused on getting the right help from
support and the other on timely outputs Unintended Consequences:
when producing and delivering
service/products in Offerings to Since support functions are not coordinated an
customers. oversupply tends to arrive without fanfare in
requirements from separate groups (HR, finance,
And the support dilemma is more complex
because functions like HR, finance, IT, IT, legal, etc) that overburden operations.
marketing, PR and legal are not
coordinated or synchronized. Each tends to act on their own without much concern for a combined
effect on each other or how they impact operations. Thus an “oversupply” of support tends to arrive
without fanfare because many different requirements from separate groups can easily overburden
So when leaders in Operations say an oversupply of Support is one of their biggest concerns it
is likely a true statement. But how to establish a better alignment is an even tougher issue.
The second dilemma concerns the proper number and placement of “master doers” within the
organization. Certainly an oversupply seems improbable and will tend to correct itself without much
flourish. Undersupply is a totally different matter, as it will normally occur in both operations and
support areas, but today more so in operations.
There has been a tendency for support to attract the more highly educated class to populate jobs in
finance, IT, accounting, marketing, HR and legal, while they are shunning operations jobs as being
“difficult” and having “never ending problems.” That leaves operations folks in sales, advertising,
production, distribution and customer service centers to endure the questions and challenges of those
in support jobs. This is especially tough
Unintended Consequences: when support folks have not, for the most
part, been exposed on a daily basis to the
Somehow lacking a proper balance challenges of running operations at the Peak
between operations and support tends Performance levels.
to emphasize the dilemmas for not
From the point of view of support experts,
having the right numbers and positions getting things working better in operations
for “master doers”. may be tough, but why so challenging every
day? Enter the “master doer” class of
operations folks who have long track records of getting things done right, done on time and within
budget. And how have they managed such a track record? By doing these jobs over and over again
and learning how to make things happen at high levels of success even under very tough
circumstances. BUT, they cannot work miracles without the proper resources and right numbers of
their class who have the “right jobs” located in the right places.
Somehow when organizations are lacking a proper balance between operations and support,
this imbalance tends to emphasize the dilemmas for not having the right numbers and
positions for “master doers” who can solve the problems.
As the support functions have gotten more resources they must prove this has been the proper
decision. So they begin making things happen – but to what end? They cannot in most cases do their
work without the cooperation and implementation from operations, which will involve getting things
done that impact customers.
Usually this also impacts revenues (sales to customers) and costs. It’s justified by helping reduce
costs, improve productivity and increase the bottom line. Much of the time these new ideas from
support have never been tried and implemented successfully in this group or organization. Why? If this
has been tried and succeeded in the past, it would not be a new project happening today.
So what is the upshot arising from the two types of dilemmas? And what does it mean to you,
your team, your department / division and organization?
(The core business processes, assets, and resources that accomplish getting new and
retaining customers through the development and delivery of goods and services)
Customers Master Doers
When the oversupply of support exists, they have a tendency to push new ideas and projects at
operations faster than the later can absorb and implement them. Why? Because the time and
resources needed to dream up these ideas and sell them as a feasible right answer is much easier
and faster than efforts to make them work in real live situations with customers. In the case of a forced
sale, customers can be either “inside” the organization or “real” ones who will be receiving the benefits
and using this new approach. As prospective customers there are two decision choices: first whether
to say yes and “buy into” starting this new approach and second how hard to work in making it
successful in actual use. Customers buy and use it as they team with the folks in both support and
operations that create and deliver the new changes to them. Buying is usually much easier than using
it and making it work correctly.
One more time: So what is the upshot arising from the two types of dilemmas? And what does
it mean to you, your team, your department / division and organization?
The Strategy Going Forward
What’s so very interesting about these two sets of dilemmas is that they can both be solved with the
same remedy. It’s a process that involves indentifying existing master doers and connecting them with
upper level leaders who are willing to tackle the issues head on. And work with each other and master
doers until a solution is in place that is successful. The process goes something like the following steps
Gain preliminary agreement by a team that one or both of the dilemmas seems to be damaging and
limiting successful outcomes in their organization.
1. Discuss and agree on specific situations where outcomes can be improved.
a. Note there are plenty of companies that lack high quality in both operations and
support and sometimes the shortfalls are just in operations.
b. It seems the trick is to identify all types of problems and tackle one or two that “hurt” the
2. But in any case, understanding and getting agreement on the most important Pivot Point goal
is a starting point that helps move all projects along a faster more effective pathway to higher
levels of success.
3. Also discuss and agree that most of the power to make needed changes lies within this team
and not with others.
a. If you don’t have projects where you do control enough power to “make the proper
changes happen” then you have two choices:
i. Gain agreement by others who can help make it happen; or
ii. Change to a project where your team does have the power to make it happen.
4. Discuss and agree on the obvious steps this team can take that will gain improvements in
outcomes that are visible and tangible to themselves and to others inside the organization.
5. Discuss and agree on the resources and time frame needed in which to plan and carry out the
necessary steps to make improvements happen.
Decision at the Top:
Stage Two: Establish a “Master Doer” team working with
Formalize the work plans, time frames, top executives to identify and sustain a Pivot
resource commitments and targeted outcomes
Point goal that customers agree is “right”.
for the first phase of this change effort. Make
certain that one or more top level leaders are
aware of and have participated in at least one of the steps 1 - 5 and have committed to being involved
in discussing and reviewing progress on the new initiatives. NOTE: this is usually the top level
executive that your team reports to now.
Commence doing the projects.
1. Findings and new initiatives are socialized and agreed on before being implemented.
Depending on the complexity of changes, a carefully planned implementation program is
usually required to assure successful outcomes in any change efforts.
2. Continued involvement of the top level leader is very important to the overall acceptance and
full support for changes being planned.
3. Making as certain as possible that the first efforts are successful is a crucial strategic choice in
change efforts. Any level of failure will be accepted as pretty much complete failure. It will shut
down most change efforts in their tracks.
4. Depending on the levels of success in Stage 3, the next initiatives should be more obvious.
Those involved with Stage 3 will begin to have either positive or negative feelings about what’s
happened and how that impacts their work lives. Their “customers” will also have opinions
about how well or poorly this new approach is working.
5. Whether it’s a smashing success or dismal failure, a new decision is made to stop for good or
wait a while to decide or proceed immediately with the next new initiative.
So who sets a goal of helping “master doers” refine operations to uncover a Pivot Point? And where
and how do support functions like HR, finance, IT, marketing, PR and legal work to make certain
Master Doers in operations succeed with consistently delivered high quality Offerings for customers?
And how does a more focused effort get started at your organization, with your help? And whose
permission is needed to make a decision to start now? The answer – anyone can start at any time,
but top level support will help it progress faster.
Details for Organizational Assessment
1. Operations include all those folks that “touch” customers and directly create value, which
translates into revenues. The value chain that Operations uses to create and deliver value to
customers includes all the functions and processes needed to complete the steps used by
employees as they do their work and make sales.
a. The Operations functions include new product design and innovation, pricing, sales,
advertising, production, delivery and customer support in after sales follow-up with all
services provided to customers such as warranty, repairs, etc.
2. Support includes all those folks that do not “touch” customers as a line function but help
Operations get the work done more effectively as members of the organization work together
toward a goal to meet customer needs and create value they want and will pay to receive.
a. Support is normally comprised of HR, finance, accounting, IT, marketing, PR, legal,
purchasing and “administration” that includes security, real estate, communications,
environmental and other ‘housekeeping” functions.
3. In recent years the Support function has tended to grow larger as compared to Operations with
increases in finance, IT, HR, marketing and accounting. New Support areas with added
personnel in PR, Training, legal, Environmental, Security, and Stockholder Relations have
contributed to much larger budgets for Support. Cost restructuring has usually focused on
reducing Operations jobs or outsourcing those jobs overseas for lower costs of goods sold.
Wikipedia: Southwest Airlines Co. (NYSE: LUV) is an American low-cost airline. Southwest is the largest
airline in the world by number of passengers carried per year (as of 2009). Southwest maintains the third-largest
passenger fleet of aircraft among all of the world's commercial airlines. As of May 3, 2009, Southwest operates
approximately 3,510 flights daily. Southwest has its headquarters on the grounds of Love Field in Dallas, Texas.
Southwest Airlines has carried more customers than any other U.S. airline since August 2006 for combined
domestic and international passengers according to the U.S. Department of Transportation's Bureau of
Transportation Statistics. Southwest Airlines is one of the world’s most profitable airlines, posting a profit for the
37th consecutive year in January 2010.
Southwest's successful business model involves flying multiple short, quick trips into the secondary (more
efficient and less costly) airports of major markets, and using only one aircraft type, the Boeing 737.
Definitions of terms based on 12 steps needed to gain Sustained Advantage over competitors are listed
below. For further clarification or to provide suggested changes, please call cell phone 913 381 7777 for Merlin
Spencer or email email@example.com . Thank you so much for your time and consideration.
An Offering is the combination of all the elements from operations that “touch” customers in creation, sale,
production, delivery and follow-on support of an organization’s goods and services that customers gain value
from and are willing to purchase. The “use” of what’s purchased will vary by every situation, so both buyers and
users views of an Offering are included when doing any data collection and analyses of what’s working best and
what’s not working in an Offering.
Pivot Point Concept – The notion of Pivot Point is presented as a uniform goal for any organization. The
“target” for a Pivot Point discovery process is to isolate how operations is working together and interacting with
prospects and customers when creating and delivering some type of value to customers or constituents.
Examples include students at school, patients in health care, citizens in communities, and members in
organizations or associations as well as buyers and users of cars, cell phones, computers and all other types of
products and services. The Pivot Point is normally discovered by a small team of “master doers” being focused
on interactions between the customers and the operations.
This paper uses Southwest Airlines business model as an example to demonstrate the tension between the
complex and simplistic approaches to setting strategies, goals and rewards in organizations.
An Entity is the combination of an Offering and targeted customer group or segment. Most organizations have
more than one Entity since they do serve multiple customer segments, categories or types. Again the buyers and
end users need to be included in all data collection and analyses for completeness and accuracy in describing
findings and recommendations concerning Entities.
Peak Performance is most commonly referred to in sporting situations such as the Olympic Games. Our
reference is to those organizations that have proven their abilities to create and deliver superior levels of outputs
(Offerings) over several years, thereby gaining a reputation for outstanding performance. Establishing and
sustaining the organizational disciplines to reach and sustain Peak Performance outcomes on a consistent basis
is seldom achieved by organizations of any type. A few best selling authors have described companies at Peak
Performance levels, but no one has presented the “formula” by which to make it happen. It’s our belief that
“Your Company’s E = MC2 Equation is Waiting” to be uncovered. We’ll help you Copy the Southwest Airlines
Formula so you can come on board and start at any time.
Books of interest when searching for Pivot Point and your company’s
equation include the following.
Kevin & Jacquie Freiberg, Nuts – Herb Kelleher’s Crazy Recipe for Business and Personal Success, Broadway
Jody H. Gittell, The Southwest Airlines Way, McGraw Hill, 2003
Jim Collins, Good to Great, Harper Collins Publications, 2001
John P. Kotter, The General Managers, The Free Press, 1982
Charles A. Garfield, Peak Performance, Warner Books, 1984
Larry Bossidy & Ram Charan, Execution: The Discipline of Getting things Done, Crown Business, 2002
Jim Collins, How the Mighty Fall, Harper Collins, 2009
Sun Tzu, The Art of War, Translation by Samuel B. Griffith. Oxford University Press, 1963
Peter Drucker, Management: Tasks, Responsibilities and Practices, Harper & Row, 1973
Mike Woodcock, Team Development Manual, Halsted Press, 1979
Gene Dalton, Paul Lawrence and Larry Greiner, Organizational Change and Development, Richard Irwin, 1970
Clayton Christensen & Michael Raynor, The Innovator’s Solution, Harvard Business School Press, 2003
Bradley Gale, Managing Customer Value: Creating Quality & Service That Customers See, Free Press, 1994
Kees Van Der Heijden, Scenarios: The Art of Strategic Conversation, Wiley, 1997
Daniel Goleman, Richard Boyatzis & Annie McKee, Primal Leadership: Realizing the Power of Emotional
Intelligence, Harvard Business School Press, 2002
Abraham Maslow, Maslow on Management, John Wiley, 1998
Orvis Collins & David Moore, The Enterprising Man, Michigan State University Studies, 1964
Charles Kepner and Benjamin Tregoe, The New Rational Manager, Princeton Research Press, 1981
Henry Mintzberg and James Quinn, Readings in the Strategy Process, Prentice Hall, 1996
Russell Ackoff, Redesigning the Future: A Systems Approach to Societal Problems, Wiley, 1974
Russell Ackoff, Creating the Corporate Future: Plan or Be Planned For, Wiley, 1981
William Bridges, The Character of Organizations, Davis-Black Publishing, 1992
Barnett C. Helzberg, Jr. What I Learned Before I Sold to Warren Buffett, Wiley, 2003