David Batstone
 |
Bob Montgomery began working at Southwest Airlines in the late 1970s. He quickly became a jack-of-all-trades, serving as a ticket agent, a manager of customer service and held several posts in business operations. When Southwest was looking to expand beyond its Dallas-Houston hub in the mid-1980s, Bob had the ideal background to represent the company in its relationships with airports and was promoted to the position.
Bob's first test took place in Austin, Texas. The city's major airport at the time was situated only ten minutes from the state capital building. The airport was hemmed in by local neighborhoods, making expansion almost impossible. To meet a growing demand for air travel, Austin city officials elected to build a new airport and selected a locale situated far outside city limits.
Bob promised city officials that Southwest would support the new airport
project and would contribute handsomely to pre-planning costs. He brought
the Austin proposal back to corporate headquarters and Southwest executives
duly signed the agreement.
It didn't take Bob long to realize that he had goofed. The proposed site for the airport - an hour's drive from downtown Austin - was clearly wrong. A commuter airline's primary competitor is the automobile and Austin is a drivable distance to both Houston and Dallas. Common sense eventually won out, and a new airport eventually was built at a site in much closer proximity to the city.
Over a year passed before Bob had the chance to review his poor judgment with the (then) CEO of Southwest, Kelleher. Flying on a plane together after an out-of-state meeting, Bob asked Kelleher the question that had burned his conscience, "Herb, do you remember that deal in Austin?"
"Oh yes, I remember that well." Kelleher said.
"You know as well as I did that it was a bone-headed deal, and probably ended up costing the company up to half a million dollars," Bob spoke frankly.
"Well, I'm glad you finally figured that out!" Kelleher said with a hearty laugh.
Relieved to get his confession out of the way, Bob then aimed to satisfy his curiosity: "So, Herb, why did you sign that deal?"
"Because you gave your word," Kelleher answered resolutely.
The Southwest CEO went on to describe how upon receiving the Austin proposal the management team quickly recognized its shortcomings and prepared to deny the proposal. But after further inquiry, Kelleher learned that Bob had made an oral commitment to Austin city officials. "If Bob gave his word that we would support the deal, then that's what we're going to do," Herb said to his fellow executives, and the Austin deal was sealed.
How remarkable for a corporation to stand behind an oral agreement made by a mid-level manager. Absent a signed contract, imagine the wriggle room a team of corporate lawyers could exploit!
Maybe it is even more amazing that the company did not make Bob pay dearly for his mistake. As he has moved along in his career, Bob has compared his experience with friends who mess up on the job at other corporations. "They are humiliated, demoted, even fired for making a mistake," he says. The backing he received, on the other hand, contributed to his growth into a company leader.
Business transactions always involve some element of risk. A company can
never be sure that a partner will stand behind their word. When a
corporation builds the kind of reputation Southwest has -- and is willing to
back it up even in the face of adversity -- partners line up to do business
with them.
|
