ETHICAL LEADERSHIP Executive Leaders Create Culture

Executive leaders affect culture in both formal and informal ways. Senior leaders can create, maintain, or change formal and informal cultural systems by what they say, do, or support. Formally, their communications send a powerful message about what’s important in the organization. They influence a number of other formal culture dimensions by creating and supporting formal policies and programs, and they influence informal culture by role modeling, the language they use, and the norms their messages and actions appear to support.

The founder of a new organization is thought to play a particularly important culture-creating role. Often, the founder has a vision for what the new organization should be. He or she often personifies the culture’s values, providing a role model for others to observe and follow, and guides decision making at all organizational levels. For example, Thomas Jefferson founded the University of Virginia. Although he’s long gone, it’s said even today that when the governing board of the university is faced with a difficult decision, they’re still guided by ‘‘what Mr. Jefferson would do.’’ Founders of small businesses frequently play this culture-creating role.

Herb Kelleher is the legendary founder of Southwest Airlines, often cited as the best-run U.S. airline. The no-frills airline started in 1971 and has been growing and flying pretty high ever since, despite many difficulties in its industry. Southwest Airlines has never served a meal, and its planes are in and out of the gate in 20 minutes. During Kelleher’s tenure as CEO and chairman, other airlines went bankrupt, suffered strikes, or disappeared. But Southwest continued to succeed even after the terrorist attacks of September 11, 2001, that sent the entire industry reeling. The secret is thought to be the company’s culture and an esprit de corps inspired by Kelleher—he believes in serving the needs of employees, who then take great care of customers and ultimately provide shareholder returns. The culture combines efficiency, a family feeling, and an emphasis on fun. In support of efficiency, pilots have been known to load luggage or even clean planes if necessary. During a fuel crisis, Kelleher asked employees to help by providing money-saving ideas. The response was immediate: within only six weeks after Kelleher’s request, employees had saved the company more than $2 million. In the area of fun, Kelleher has always been known for his crazy antics, jokes, and pranks. He settled business disputes by arm wrestling; and when a fellow airline CEO criticized Southwest’s promotion that featured Shamu, the killer whale, Kelleher sent him a huge bowl of chocolate pudding  with a note reading, ‘‘With love, from Shamu.’’16 Employees are encouraged to make flying fun, so that customers leave every Southwest flight with a smile, and they’re encouraged to do that in a way that’s spontaneous, emotional, and from the heart.17 Southwest is seen as a leader in its industry and regularly shows up near the top of Fortune magazine’s most admired companies. It continues to perform well even after Kelleher stepped down as CEO in 2001. In explaining how they have remained so successful, Colleen Barrett   referred to the culture, saying that Southwest does ‘‘everything with passion. We scream at each other and we hug each other . . . we celebrate everything.’’18 The walls at Southwest’s headquarters are literally covered with photos of employees dressed in crazy outfits or with their pets. But the company is also financially conservative and cost conscious, and these cultural attributes contribute to their ongoing success.