In his outstanding book, Great by Choice, Jim Collins relates the story of Howard Putnam, a former CEO of Southwest Airlines. Putnam institutionalized the Southwest Airlines’ “recipe” for success. His “recipe” was not a strategic plan or a vision or a mission statement, but a carefully thought-out list of operating principles. That list included:
- Utilize the 737 as our primary aircraft.
- Continue high aircraft utilization and quick turns, ten minutes in most cases.
- Continue low fares and high frequency of service.
- Stay out of food services
- Keep it simple. Continue cash-register tickets, no seat selection on board, etc.
There was more on Putnam’s list, but you get the idea. Collins refers to this kind of recipe as a SMaC which stands for a Specific, Methodical, and Consistent set of operating principles. Others might refer to these as simply “critical success factors.” Either way, these are the essential things we do that have made us successful and will continue to make us successful as long as we continue to follow them. These are not just the “operating rules of the day.” These are long-term rules for how we run our business that may stay in place for many years, even decades. Sure, markets change, and over time, some of our operating principles may have to change too. But think of it a little like the U.S. Constitution. Yeah, we can amend it, but it’s served us very well for a long time so let’s not change it on a whim. Let’s change it only when there’s a clear and compelling reason to do so.
To consider what should be in your “recipe,” you need to clearly understand what you do (or how you do it) that your customers value, directly or indirectly. For instance, Southwest passengers probably don’t care that the airline has standardized on the 737. But by doing that, Southwest only has to train pilots on flying one airplane, only has to train mechanics on maintaining one airplane, and only has to inventory parts for one airplane. That all saves money and helps the airline to keep fares low. And Southwest passengers do care about low fares.
A well-crafted recipe can be a great template to help your decision-making process. Will the solution you’re considering to a tough problem conflict with your “recipe?” If you take advantage of an opportunity that presents itself, will the result violate any of your operating principles?
Obviously, a “recipe” like this only works if it is communicated effectively and frequently to everyone in your organization . . . they need to internalize it. They need to be able to recite it asleep and blindfolded. And they can’t just hear the words, they also need to hear the music. They need to understand how these rules support the way we do business and why it’s important to follow them consistently. They need to understand why flying 737s helps us deliver on our promise of low fares.
So put on your Betty Crocker hat and draft your “recipe.” If done well, it has the potential to give you and your entire organization a singularity of purpose and vision that will be transformational.
Rock Solid Business Development
Phone: (847) 665-9134
andy@rocksolidbizdevelopment.com
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