Colleen Barrett has had a long and fruitful career in the airlines industry, having served in increasing areas of responsibility at Texas-based Southwest Airlines for over 30 years, including seven as president. In this interview, Barrett discusses how Southwest’s people-centered culture has helped it weather hard times in the industry, how her role at the company is about to change and thoughts on the Keynote Address she’ll deliver at our Top Small Workplaces Conference in October 2008.

In a number of metrics, including stock performance, Southwest has kept ahead of the competition. How do employees and the culture you’ve worked to create factor into this?
They’re all owners, first of all, and they think and act like owners. Also, we’ve always managed for the bad times during the good times. Our employees take a lot of pride in that; at any given time they probably own 10-13 percent of our stock.

They’re very competitive in the sense that they want to be the best airline, but, more importantly, a great customer service company. We talk internally about being in the customer service business that happens to provide airline transportation.

How do you keep turnover in check in an industry that is notorious for intractable labor costs?
We work on it all the time. We do exit interviews and surveys of people on a volunteer basis to figure out why they leave. If we notice a problem at any particular location, we pick up on it pretty quickly, and it usually boils down to leadership issues.

I think perhaps one of the reasons we have a better track record when it comes to that, at least than other airlines, is that we allow our people the freedom to move about the country, just like we allow our customers to “move about the country.” This helps avoid burnout.

In naming you one of the most powerful women in business, Forbes noted your talent for putting workers at ease, and you yourself have stressed how important your culture is. How do you do this with over 34,000 employees?
You have to keep the focus on not playing politics and you try to look at the basic goodness and contributions of people. It starts with hiring. Generally speaking, if you hire people who are servant leaders – who want to serve others or want to serve a cause – and if you follow the Golden Rule, it’s pretty darn easy to figure out if the people are for real or not.

We also believe strongly in promoting from within. During the interview process, we talk constantly about how our culture is, in our opinion, our biggest point of difference from our competitors. It becomes part of the DNA.

Then, if you hold yourself accountable for that, it’s easy to hold others accountable for that as well. When you then deal with promotions and people moving from location to location, it makes it easier for the culture to keep thriving. With 64 locations, one of our biggest challenges is putting the right supervisors and managers in the field.

I understand that your CEO, Gary Kelly, will assume your role as President officially in a few days, although you will stay on full-time with Southwest for several more years. What will your new function be?
I’ll still keep an office here and I’ll have almost the same letterhead – it’ll just change to “President Emeritus.” I’m going to stay engaged with employee and cultural efforts and customer service, which is really my passion and always has been. I’ll stay involved with those things, but I’ll have no leadership responsibility. Right now I have 13 direct reports, and that’s more than anyone else has had. So that’s a big change, along with switching from working seven days a week, which I’ve done my entire working life, to just five.

I’m also saying yes to things I’ve said no to in the past. I’ll be involved with two colleges, one of which is my alma mater. I’ve never considered myself a speech maker, but I’ll be doing more of that, too.

On that note, you’ll also be speaking at our Conference in October. What will you discuss there?
What I admire most about any company out there is the Winning Workplaces concept – culture, ownership and how you motivate employees.

I did a speech at our most recent owners’ meeting where I decided to give a retirement gift to our shareholders. I handpicked 50 employees and 12 customers that I knew well and that I felt exemplified what’s best about Southwest. Then I hired my ad agency and gave them the names. I said there should be no agenda, no scripts – just spend two days with them and tell their stories.

The agency was hesitant, but I said that at the end of the two days, you’ll be able to make me a 10-minute video that tells the best story possible about Southwest. They shot 23 hours over what ended up being three days, and the final video turned out to be 14 minutes long.

I showed half of it at the shareholders’ meeting, but I’m thinking of showing it uncut at your event. I don’t know what I’m going to do for the rest of my time yet!