Has Southwest Airlines Forgotten Their Purpose?

Recently I delivered a two-day leadership seminar. Participants in the seminar had flown in from various points on the East Coast. At five o’clock, at the end of the first day of the seminar, quite a few people took out their BlackBerries and began to check-in with Southwest for their next day’s flight.

As many of you know, Southwest does not pre-assign seats, but instead assigns spots in a queue. That assignment begins twenty-four hours before a flight. I listened to the conversation among the participants as they clicked away on their BlackBerries; what surprised me was the level of frustration in the room. My seminar attendees were checking in minutes after their twenty-four hour window opened, and yet, some were already forty-fifth or higher in their queue. Based upon past experiences, they may have expected to be fifth or less.

What had happened? As I listened, I recalled that Southwest had recently changed both their fare structure and how they assign seats. Now it is possible to buy yourself a higher place in a seat assignment queue. I couldn’t help but wonder, was this change a wise business decision on Southwest’s part?

After the seminar ended, I took a look at Southwest’s new fares. Before there were five different fares, including discount fares and web-only specials. Now there were only three fare categories: “business select,” “business,” and “wanna get away.” All three fares were considerably higher than I was used to paying for routes I had traveled on Southwest. I was annoyed—and I wasn’t even booking a flight.

Admittedly, this is anecdotal evidence. I’ve only described the experience of several customers. I have been such a satisfied Southwest customer that when I’m booking a flight on a route that Southwest flies, I don’t even check competitive airlines. Why? The Southwest experience has been a good one for me and my family. Their fares are low, their customer service is excellent, their flights are almost always on time, and their policies about rebooking flights are consumer friendly. Given that, why would I fly on another airline?

Now, it is admittedly foolish to armchair manage a highly successful corporation like Southwest. While other airlines go in and out of bankruptcy, Southwest is the world’s most profitable airline.

However, I do know this—Southwest’s success has been more than just good fortune. Southwest’s success has been driven by a clear understanding of their purpose.

Roy Spence, the advertising guru who helped to sell Southwest to the public, has said: “Anybody who’s running a business has to seek out the higher calling of that business, its purpose. Purpose is about the difference you’re trying to make—in the marketplace, in the world. If everybody is selling the same thing, what’s the tie-breaker? It’s purpose.”

According to Spence, in the early years, as Southwest examined its purpose, they realized that they were “not in the airline business, (but) in the freedom business. (Southwest) is in the business of democratizing the skies.”

Spence writes at the moment of realization of Southwest’s purpose:

We knew that being in a higher-calling business long term is a clearer and more compelling place to be—not only in the minds of the consumers, but also in the hearts of the employees. At Southwest Airlines, every decision we make, we have to decide if it enhances people’s freedom to fly or curtails it.

Are these new Southwest policies taking them from their purpose “of democratizing the skies”? I suspect so, but only time will tell. If they do, Southwest’s decision will prove to be disastrous. They will no longer be a unique airline with a unique purpose. Customers will begin to consider alternatives; and when they do, you can be sure of one thing—Southwest’s unbroken string of profitable years will be over.

On Gratitude

Eric Hoffer wrote:

The hardest arithmetic to master is that which enables us to count our blessings.

Aldous Huxley wrote:

Most human beings have an almost infinite capacity for taking things for granted.

David Reynolds wrote:

I am wearing clothes others made for me, eating food others grew and prepared for me, using tools others designed and fabricated and taught me how to use, speaking words others defined and explained. There is nothing I do that is thanks to my own efforts alone. Most of time I fail to notice the efforts of others in my behalf.

Gregg Krech wrote:

When I narrow my vision to search for an ideal that my mind has created, life seldom complies. But when I broaden my vision to simply notice what life is offering, I find that I am surrounded by an abundance of care and support. Yet, we can repeatedly observe the mechanics of a mind that is rarely satisfied with what it has at the moment because it is always yearning for some manufactured ideal.

A Course in Miracles says:

Love is the way I walk in gratitude.

Gratitude is a lesson hard to learn for those who look upon the world amiss. The most that they can do is see themselves as better off than others. And they try to be content because another seems to suffer more than they. How pitiful and deprecating are such thoughts! For who has cause for thanks while others have less cause? And who could suffer less because he sees another suffer more? …

Today we learn to think of gratitude in place of anger, malice and revenge. We have been given everything. If we refuse to recognize it, we are not entitled therefore to our bitterness, and to a self-perception which regards us in a place of merciless pursuit, where we are badgered ceaselessly, and pushed about without a thought or care for us or for our future. Gratitude becomes the single thought we substitute for these insane perceptions.

Thomas Merton wrote:

Love is not a matter of getting what you want. Quite the contrary. The insistence on always having what you want, on always being satisfied, on always being fulfilled, makes love impossible. To love you have to climb out of the cradle, where everything is “getting,” and grow up to the maturity of giving, without concern for getting anything special in return.

Meister Eckhart wrote:

If the only prayer you say your entire life is ‘thank you,’ that would suffice.

Ishin Yosimoto wrote:

You are fooled by your mind into believing there is tomorrow, so you may waste today.

Ralph Waldo Emerson wrote:

I awoke this morning with devout thanksgiving for my friends, the old and the new.

Albert Schweitzer wrote:

At times our own light goes out and is rekindled by a spark from another person. Each of us has cause to think with deep gratitude of those who have lighted the flame within us.

My very best wishes for a very happy and peaceful Thanksgiving.

Tainted Ginger and What it Means For You

Yesterday the Wall Street Journal reported on shipments of fresh ginger from China which were contaminated with a dangerous pesticide. The shipments were discovered in supermarkets in California.

In 2006, China accounted for 78% of the ginger imports to the United States. Much of the ginger was grown by small farmers and then aggregated into larger shipments. Although China has banned the use of the dangerous pesticide Aldicarb on most vegetables and fruits, some small farmers have ignored this ban. At high enough dosages, exposure to Aldicarb can be fatal. Smaller dosages induce nausea, headaches, blurred vision, muscle spasms, and difficulty in breathing. The Wall Street Journal reported that some California buyers of ginger have experienced these symptoms.

Perhaps you don’t buy fresh ginger, and you are ready to navigate away from this page. Not so fast. Ground ginger is an ingredient found in many processed foods.

“So what,” you might say, “I don’t buy processed foods from China.” Unfortunately, that alone does not protect you. Due to a loophole in United States law, you can buy processed food manufactured in the United States and still be ingesting imported ingredients inadvertently.

How can this be? As I have reported before in my blog:

The source of the problem is a little-known loophole in the requirements for labeling ingredients on manufactured food products. If you are like me, you may have assumed that if a food product was made in the USA, than the ingredients were from the USA.

This incorrect assumption is potentially dangerous to your health. The law does require that food labels inform the “ultimate purchaser” of the country of origin. However in the case of processed foods, the consumer is not considered the “ultimate purchaser.” According to the logic of the government, when an important ingredient undergoes a “substantial transformation,” the “ultimate purchaser” becomes the manufacturer of the processed food.

The sole authority of what is a “substantial transformation” is the United States Customs Service. However, ingredients in almost all processed foods are considered to have undergone a “substantial transformation.” Thus, if your favorite processed food uses imported ginger, the ingredient has undergone a “substantial transformation.” The maker of the product does not have to inform the public that they are using imported ginger or, for that matter, any other imported ingredient.

What can you do? Here are my recommendations:

1. If you use fresh or powdered ginger, buy only organic ginger. Organic ginger is very unlikely to be imported from China.
2. For all processed foods that you regularly consume, call the toll-free number that the manufacturer usually provides on the package. Ask them specifically for the country of origin of their ingredients.

For more information you may access my previous five blog posts on imported food here.

Ethanol, the Aral Sea, and the Looming American Environmental Disaster

Consider the Aral Sea. The Aral Sea—once the fourth largest inland body of water in the world—is now a vast wasteland that has shrunk to less than 25% of its former size.

The Aral Sea in Uzbekistan (formerly part of the Soviet Union) stands as a tragic monument to environmental carnage that frequently occurs under socialism. How could this have happened? Was it a change in weather? No, the destruction of the Aral Sea was the consequence of the Soviet decision to divert waters that flowed into the Aral Sea for farming.

With the lessons of the Aral Sea in mind, let us reflect on the looming environmental catastrophe that is beginning to build in the United States. Like the Aral Sea disaster, our own central planners think they know best how water should be used. In our case, it is for the production of ethanol.

Ethanol is a fuel that would not exist in the United States without billions of dollars of taxpayer subsidies. Robert Bryce, writing in Slate, clearly explains why. Simply put, the production of ethanol uses more energy than it produces. Bryce writes:

David Pimentel, a professor of ecology at Cornell University who has been studying grain alcohol for 20 years, and Tad Patzek, an engineering professor at the University of California, Berkeley, co-wrote a recent report that estimates that making ethanol from corn requires 29 percent more fossil energy than the ethanol fuel itself actually contains…

In addition to their findings on corn, they determined that making ethanol from switch grass requires 50 percent more fossil energy than the ethanol yields, wood biomass 57 percent more, and sunflowers 118 percent more. The best yield comes from soybeans, but they, too, are a net loser, requiring 27 percent more fossil energy than the biodiesel fuel produced. In other words, more ethanol production will increase America’s total energy consumption, not decrease it.

Ok, but let’s face it—we’ve all been overloaded with reports of government boondoggles that benefit some at the expense of all. Why should we be especially concerned about ethanol?

Corn is a plant that needs a lot of fertilizer. The excess fertilizer is poisoning aquifers in the Corn Belt states. Nitrates that come from the runoff are especially toxic to children and pregnant woman.

But that is just the tip of the iceberg. All throughout the Corn Belt, ethanol plants have been opening. Besides polluting the ground water they are draining aquifers at alarming rates.

Here is just one example. The water aquifer in southwestern Minnesota is mostly ancient clay sea beds. The region doesn’t get a lot of rainfall; and in any case, recharging clay aquifers is not a process that nature easily accomplishes. In Granite Falls, Minnesota, one ethanol plant, Granite Falls Energy, drained the town aquifer by nearly half in less than a year.

Let’s be clear here. Without the billions of dollars of subsidies paid each year for corn and ethanol production, there would have been no Granite Falls Energy. Nor would there have been any other ethanol plants draining aquifers in states such as Minnesota, Nebraska, and Iowa.

How long it will take for an environmental catastrophe of the size of the Aral Sea to occur is not easily predicted. Such a disaster in the United States is beyond our imagination. Although it may be beyond our imagination, that is not very reassuring. We can be sure of one thing—no country is immune from the consequences of the follies of socialism.

Replaying

In the poignant and touching novel Replay by Ken Grimwood, the main characters die again and again only to repeat a portion of their adulthood. The main characters discover over the course of many “replayed” lifetimes that all of their attempts to “improve” their lives fail. Their core belief, which endures for many “lifetimes,” is that the key to a happy life is creating a perfect set of circumstances. But in every case, their lives never turn out the way they envision them. They are able to change some of the details of their lives—but the more they try and manipulate the outcome, the less happiness they have. They finally discover that life is not about manipulating the future, but rather, living fully in the present in an uncertain world. What the characters in Replay discover is a hard concept for individuals to understand.

Our vision of what perfect circumstances will make us happy always comes from our ego and bears little resemblance to what we truly need in order to grow at this time. This is not to say that we need to reject inspirational visions, but the shortest route to reach those visions is wholehearted engagement in the present. When we need to change our circumstances, it can be accomplished out of a quiet knowing. This action, based on quiet knowing and surrender, is the alternative to futile, fear-based attempts to control. That quiet sense of knowing is easily drowned out by our frenetic mental activity aimed at control. This mental activity is generated by the false belief that although we are uncommitted and unhappy now, if we change our circumstances, our commitment will magically change.

Tom McMakin, formerly the chief operating officer of Great Harvest Bread Company, tells the story of his own struggle to commit. He places his story in the larger context of the myriad of choices facing us all:

The curse of living today is not the absence of opportunity; it is that of having too many choices. There is so much we can do; it is hard to decide sometimes. How many times have you heard a friend say, “I don’t know what I want to do!” They’re not worried about whether there is anything they can do. They are freaking out because there are lots of things they could do and they don’t know which one will make them happy.

McMakin goes on to share the experience of one of Great Harvest’s franchisees whose owner realized that he “was one of those guys who likes to keep his options open and it was making (him) miserable.” The store had become a burden to him and business was suffering. His wife provided the simple cure when she advised him, “Get in there with all you heart and Spirit or get out.”

My wife reminds me that I sometimes suffer from the same disease; I try to keep all my options open when it comes to my work. I’ve gotten much better; and when I look back at the times that I didn’t understand this point, I can only smile and wonder why it took me so long. In past days I would wake up each day with everything in play: work on my book project, work on my PowerPoint slides for class, develop exercises for a client’s leadership development program, write a blog post, etc. When I approached the day in this way, the morning would frequently go by in spasms of work but more frustration than anything else. He who is distracted by anything, will quickly be distracted by everything.

There is no perfect set of circumstances to create, there is just the moment in front us to live wholeheartedly. This moment will soon pass. The Greek philosopher Heraclitus observed, “You can’t step into the same river twice.” Dan Baker, in his book What Happy People Know, shares this wisdom that inspired one of his clients: “Every moment that’s ever been, or ever will be, is gone the instant it’s begun. So life is loss. And the secret of happiness is to learn to love the moment more than you mourn the loss.”

When Government is Small: New Hampshire Shows the Way

It has become an article of faith among some that a large government is necessary to run a modern and prosperous society. New Hampshire should give pause to those who believe that argument.

Consider this anecdote: In 1995, my family and I were buying tickets for the summer cable car ride up Cannon Mountain in New Hampshire. I was surprised to see that the cashier was using a vintage Kaypro, circa 1984, computer. I was curious why the park was using such an “antique.” The cashier explained that they were basically using the machine to keep track of the number of tickets sold, and they didn’t need anything more.

With that spirit of putting the taxpayer first, New Hampshire’s government functions quite well without a state income tax or sales tax. New Hampshire’s residents have the second lowest tax burden as a percentage of income in the United States.

If you are a big government advocate, you may be thinking that surely New Hampshire citizens are poor, receive little in the way of services, and their children suffer with poor schools.

On the contrary, consider these facts. New Hampshire has the seventh highest per capita income in the United States. As for schools, according to a federal government study released this fall, “New Hampshire’s students outpace the national average in both math and reading, ranking near the top of the country across the board.”

Part of New Hampshire’s uniqueness stems from its true grassroots representative democracy. Even though New Hampshire is a small state (it ranks 41^st in population), New Hampshire’s House of Representatives is the third-largest parliamentary body in the English speaking world. Only the U.S. Congress and Britain’s Parliament are larger.

Astonishingly, the annual salary for a N.H. representative is $200. As to perks, each member basically receives a seat and a coat hanger rather than a large staff and office. Serving in the N.H. state house is not a career move toward power and wealth.

As a consequence, a representative cross-section of men and women serves in the state house: “businesspeople, homemakers, educators, engineers, doctors, lawyers, students and retirees.” In this atmosphere, the taxpayer comes before special interest legislation and taxes remain low.

Where does your state rank on tax burden and per capita income? The complete numbers for all states are at http://money.cnn.com/galleries/2007/pf/0704/gallery.tax_friendliest/8.html

Something for Nothing

In his easy-to-read, yet profound book Something for Nothing, Brian Tracy lays out the economic and psychological causes of the increasing social desire to live at the expense of others. Tracy’s book was written before the current housing crisis.

Yesterday CNN Money reported on prudent homeowners, such as Teresa Nelson, who resent the bailout of those who have been imprudent. When Teresa bought her home in 2005, she opted for a less risky, but higher priced, 30-year fixed-rate instead of a low teaser-rate adjustable mortgage.

Teresa told CNN, “I was well aware of what an ARM meant, and was staying far away from those snake-oil pipe-dream promises. I also wasn’t shopping for a short-term, big payoff investment—I was looking for my home, until I retire.”

CNN reports that while Nelson is paying off her fixed-rate mortgage, delinquent borrowers are having their teaser-rates extended for 5 years; this bailout brings their interest rate substantially below Nelson’s.

Although currently these bailouts are being done voluntarily by mortgage companies, as the number of foreclosures grow, these bailouts are unlikely to be sustained without taxpayer money.

Nelson observes, “The American taxpayer has been paying through the nose for corporate handouts for too many decades now. Our nation is closer to a recession, and it may be just what we need to get people to tighten their belts and live within their means.”

Living within our means is unlikely to happen anytime soon. Spending by federal and state governments continues to grow at alarming rates. Homeowners continue to take out home equity loans at record rates. The dollar continues to fall in value as the Fed continues to cut interest rates. Huge corporations, such as Archer Daniels Midland, continue to feed at the public trough. And behind it all is the sense of entitlement.

This sense of entitlement is a reflection of many things. It reflects growing economic illiteracy—many do not understand basic economic principles. It reflects a growing willingness to play the role of a victim. Most alarming, it reflects widespread ignorance of the principles upon which this country was founded.

All these trends feed on themselves. Brian Tracy observes, “As soon as there is any way for people to fulfill their desires other than by working and cooperating voluntarily with others, some people find and take advantage of that loophole. And then more and more follow their lead.” I should add those “more and more” soon become a powerful political force.

The CNN story asked whether homeowners such as Nelson were “chumps?” A follow-up question to ask is this: When honest, hard-working citizens are called “chumps,” what is the prognosis for the long-term economic health of the economy?

The late Nobel laureate in economics, Friedrich Hayek wrote, “There is all the difference in the world between treating people equally and attempting to make them equal. While the first is the condition of a free society, the second means…a new form of servitude.”

In other words, societies prosper when they treat all equally but do not attempt to fix the game after it is played. The latter is corrosive to our freedom and to our prosperity.

I will let Brian Tracy have the last word:

The simplest explanation, requiring the fewest number of steps to explain any human behavior is the desire of people to get what they want for as little as possible and if at all possible for nothing at all…Therefore, the only way to create and maintain peace, harmony, and cooperation is cut off all avenues to achievement except those of peaceful cooperation and healthy competition aimed at serving and satisfying other people in some way. This is the role of laws and enlightened public policy.

George Washington Offers Advice on the American Embassy in Iraq

In the November 2007 issue of Vanity Fair, William Langewiesche’s The Mega-Bunker of Baghdad offers a fascinating and sobering look at the new American embassy in Iraq—an embassy into which he writes, “American officials and their many camp followers are fleeing”:

The compound, which will be completed by late fall, is the largest and most expensive embassy in the world—a walled expanse the size of Vatican City, containing 21 reinforced buildings on a 104-acre site along the Tigris River, enclosed within an extension of the Green Zone which stretches toward the airport road. The new embassy cost $600 million to build and is expected to cost another $1.2 billion a year to run.

Langewiesche offers a needed historical perspective. Until the federal income tax was passed, our ability to fund a massive overseas presence was limited:

America didn’t use to be like this. Traditionally it was so indifferent to setting up embassies that after its first 134 years of existence, in 1910, it owned diplomatic properties in only five countries abroad—Morocco, Turkey, Siam, China, and Japan. The United States did not have an income tax at that time. Perhaps as a result, American envoys on public expense occupied rented quarters to keep the costs down. In 1913 the first national income tax was imposed, at rates between 1 and 7 percent, with room for growth in the future. Congress gradually relaxed its squeeze on the State Department’s budget.

Toward the end of his essay Langewiesche asks:

What on earth is going on? We have built a fortified America in the middle of a hostile city, peopled it with a thousand officials from every agency of government, and provided them with a budget to hire thousands of contractors to take up the slack. Half of this collective is involved in self-defense. The other half is so isolated from Iraq that, when it is not dispensing funds into the Iraqi ether, it is engaged in nothing more productive than sustaining itself.

What indeed is going on? It is fashionable to dismiss advice offered by the founding fathers as irrelevant for our times. Yet consider the timeless advice offered by George Washington in his 1796 Farewell Address:

Observe good faith and justice towards all nations; cultivate peace and harmony with all.

Harmony, liberal intercourse with all nations, are recommended by policy, humanity, and interest.

…Nothing is more essential, than that permanent, inveterate antipathies against particular Nations, and passionate attachments for others, should be excluded; and that, in place of them, just and amicable feelings towards all should be cultivated.

The great rule of conduct for us in regard to foreign nations is in extending our commercial relations, to have with them as little political connection as possible.

What advice could be more relevant? Washington advises, “have with them as little political connection as possible” and yet we have built a sprawling fortress on 104 acres that will cost 1.2 billion dollars a year to run.