How should he run the company in a newly deregulated market?
As other airlines were scrambling to come up with new business models, Putnam reacted completely differently. He determined that the effects of deregulation, while significant, would not call for a radical change to Southwest’s business model.
So instead of proposing a change, Putnam created Southwest’s “recipe” for success based on what made the company successful up to that point.
As with any recipe, he knew it would be important to be specific when talking about ingredients. Directions like “add some sugar” or “bake in the oven until done” are difficult to follow in a recipe. The same holds true when crafting a business model.
Here were the 10 points of his recipe:
- Remain a short-haul carrier, under two-hour segments.
- Utilize the 737 as our primary aircraft for ten to twelve years.
- Continued high aircraft utilization and quick turns, ten minutes in most cases.
- The passenger is our #1 product. Do not carry air freight or mail, only small packages which have high profitability and low handling costs.
- Continued low fares and high frequency of service.
- Stay out of food services.
- No interlining ... costs in ticketing, tariffs and computers and our unique airports do not lend themselves to interlining.
- Retain Texas as our #1 priority and only go interstate if high-density short-haul markets are available to us.
- Keep the family and people feeling in our service and fun atmosphere aloft. We’re proud of our employees.
- Keep it simple. Continue cash-register tickets, ten-minute cancellation of reservations at the gate in order to clear standbys, simplified computer system, free drinks in Executive service, free coffee and donuts in the boarding area, no seat selection on board, tape-recorded passenger manifest, bring airplanes and crews home to Dallas each night, only one domicile and maintenance facility.
These 10 points are easy to grasp and follow. They are clear and straightforward. But what is amazing about Putnam’s recipe is its consistency over time.
Despite all of the changes that took place during those 25 years…
Southwest still views the passenger as the #1 priority.
They still have stayed out of the food business.
They still have kept the family feeling and fun atmosphere.
And it has helped them still be one of the top airlines in the world.
THE SMAC FORMULA
I first learned about Putnam’s 10 points when I read Jim Collins’ book, Great by Choice, in 2012. Collins called these 10 points a “specific methodical and consistent formula” for success (or a “SMaC formula”).
He found that companies that can succeed in harsh economic conditions have their version of a “SMaC formula” that helped keep them achieve stable growth in an unstable world.
This formula like a terrific idea for companies…but could it apply to individuals?
At the beginning of 2013, I wanted to find out. So I created my formula as part of my personal goals…and it completely changed my life.
Almost every success I've had over the last 3 years traces back to my SMaC formula:
- Wake up every weekday at 4 AM
- Plan my transportation ahead of time
- Follow my exercise plan
- Log the food I eat
- Log the cost of the food I eat
That's it. Just achieving these 5 points daily led to great habits to reach my goals.
SMaC FORMULA BREAKDOWN
Here's what happened when I started implementing these points into my daily life.
Wake up every weekday at 4 AM
I wanted to wake up every day 4 AM because I felt like it would create a “platform” for success. It would allow me to get things done early in the morning before the work day even began.
Habits that occurred:
- I didn’t stay out late the night before.
- I turned off all electronics and began reading at 9 PM so I could get enough sleep.
- I always had time to workout in the morning.
- I learned how to get out of bed when my alarm went off.
Planning my transportation ahead of time
Living in Chicago, there are seemingly an infinite number of ways you can go from A to B. By planning ahead; I was able to prepare for the most efficient and cost-effective transportation ahead of time.
Habits that occurred:
- I started preparing everything the night before.
- I was never late for appointments.
- I saved money by biking and using public transportation.
Follow my exercise plan
Before implementing my formula, I found it so easy to justify either not going to the gym, or cutting out early. I knew if I could just follow my exercise plan neither of those would be an option.
Habits that occurred:
- I started planning workouts ahead of time.
- I started tracking my progress and planning to improve.
- I focused my willpower on pushing through workouts, not coming up with excuses.
- I allowed myself to feel good about rest days—it was just part of the plan.
Log the food I eat
I'd read studies that keeping a daily food journal was one of the best ways for people to lose weight. So I knew that by keeping track of what I ate, I would start to get control over my diet.
Habits that occurred:
- I saw how my diet affected my energy.
- I saw when I was tempted to snack, so I made sure to have a healthy snack on hand.
- I was able to switch to the paleo diet and stick to it.
Log the cost of food
Since I was already keeping track of the food I was eating, keeping track of the cost of that food was also incredibly beneficial. Paleo diet food can be expensive, so I wanted to see how I could keep my food expenses down, while still eating healthy.
Habits that occurred:
- I started packing a lunch rather than eating out.
- I started buying in bulk because I could see the big cost differences.
- I started creating, and sticking to, a budget for everything other than just food.
WHY THE SMAC FORMULA WORKS
So why did this work so well?
Had I set out to create all the habits that eventually sprung up, I would’ve been completely overwhelmed.
There’s no way that within a single year I could have woke up at 4 AM, exercised at least 90 minutes per day, completely overhauled my diet, and stuck to a strict budget.
However, I was able to—because those habits weren’t my focus.
My focus was simply on achieving the 5 points in my SMaC formula every single day. The only point that is especially hard was waking up at 4 AM every day. The rest I could adjust if things got too intense.
Planning my transportation didn’t mean that I had to bike through the snow every day, It just meant that I had to plan ahead.
Following my exercise routine didn’t mean I needed workout 90 minutes every day, it just said that I needed to follow whatever I planned to do.
Logging my food and the cost of it didn’t mean I needed to follow a strict paleo diet, or follow a strict budget, it just said that I needed to be aware of what I was eating and how much I was spending on it.
All of these things are achievable.
I’m not saying that this was easy — staying consistent with anything never is — but I can tell you, it was certainly easier to set out to accomplish those 5 things, than to achieve the habits that surrounded them.
CREATING YOUR SMAC FORMULA
To help you create your SMaC formula, I added my template below that you can download.
It will help you list your unique points, and track whether or not you achieve them.
- “Achieved” if you accomplished it.
- “Failed” if you didn’t.
- “N/A” if it doesn’t apply (like waking up on the weekends for me).
How do you find your points?
The points of a great SMaC formula are typically one of three things:
1. They create a platform for other habits to succeed (waking up at 4 AM)
The first characteristic is a great platform for other habits to succeed. My best example of this is waking up at 4 AM because that allowed me time before work to exercise, to read, and to write the early drafts of this blog.
Some other examples of creating a platform would be keeping organized, managing your tasks, etc. any situation in which you can create more time, energy, or focus in your day will act as a platform for other habits to flourish.
2. They increase your self-awareness (logging my food)
The second characteristic is they increase your self-awareness. The more self-aware you are, the better decisions you’ll make naturally. Simply by being aware of the food I ate helped me make better food decisions.
The same can be said for tracking your finances, tracking your time, or track your progress toward your goals. The more information you have on yourself, the better decisions you’ll make.
3. They act as a small win (follow my exercise plan)
Finally, they act as a small win. Do not underestimate the power of a small win. No matter what my exercise plan has been, accomplishing it every single day acts as a huge confidence booster even 3 years later.
Since then, I have added meditation and writing a set number of words per day to my SMaC formula which are also small wins. Anything you can achieve on a daily basis that will increase your confidence and move you closer to your goal will work for your win.
WHAT NOT TO DO WITH YOUR FORMULA
Now that we have covered the “to-dos” it’s time to cover what “not to-do” which is just as important.
1. Do not overload yourself
The most tempting thing with your formula will be to start off with 10 points on Day 1. Don’t do this. To make sure you get the point I’m going to say it two more times:
Don’t overload yourself.
Don’t overload yourself.
And…one more—don’t overload yourself!
Look at all I was able to accomplish with just 5 points! It’s not necessary—or advisable—to create a formula with a lot of points. The "C" (consistency) in SMaC is by far the most important aspect. Whatever your formula, make sure you can do it consistently.
Today my formula has 8 points. I’ve added meditation, writing 1,000 words/day, and managing all my tasks. And I've been successful with them because I was able to add them organically—after I had created all the habits of the first 5.
Create as few points as possible when you are starting out. The important thing is to be consistent with them, then once you feel like you have a good hold on them, add one more at a time.
2. Do not create “results” points
If you notice, none of my points rely on luck, on others, or even weather. They are all within my control.
I can’t control how many people read an article, but I can control writing a set number words/day.
Results are out of your control. The whole idea behind the SMaC formula is consistency. So focus on process-oriented goals, not results oriented goals.
3. Do not lie to yourself
Despite the extraordinary success I’ve got from my formula, I have not been perfect.
Here is my current record:
- Wake up every weekday at 4 AM (95.3%)
- Planning my transportation ahead of time (99.32%)
- Follow my exercise plan (91.65%)
- Log the food I eat (99.5%)
- Log the food cost (100%)
- Meditate (91.28%)
- 1,000 words (92.73%)
- Manage tasks (93.11%)
Almost every single time I fail to live up to one of my points I am tempted to mark “Achieved” or “N/A” rather than “Failed.”
But what does that accomplish?
Until today, only one person in the world even knew about my SMaC formula—and he surely doesn’t care what the results are.
Lying to myself degrades the effort I put in on those days where I was exhausted, yet still pushed myself to exercise, to write, or to wake up at 4 AM.
It’s saying that those days are just as important as the day when I skipped my workout and said, “meh, I’ll just mark ‘Achieved’ anyway.”
By being honest with myself, I am able to celebrate the true wins, and learn how to avoid the true losses.
The same will go for you in creating your own formula.
For the last 3 years, there has been no better single strategy for me than creating my specific, methodical, and consistent success formula—my "SMaC Formula".
It helped me eat healthy, exercise regularly, write a book, build an audience, save money...the list goes on. And I achieved all of these things without even setting out to accomplish them!
To create your own SMaC formula, use the template above and follow the instructions. I hope your results are as good, or even better, than mine!