Who is to blame for the Southwest Airlines meltdown? The pilots are blaming the accountants! Not the accountants in the finance department, though.
As discussed on Episode 312 of the Cloud Accounting Podcast, pilots blame former CEO Gary Kelly, who worked as an audit manager at Arthur Young before joining Southwest as a controller. He rose from controller to CFO and then — you guessed it — CEO.
Kelly was sitting at the controls of Southwest Airlines from 2004 to 2021.
During his tenure as CEO, Kelly guided the airline to become the largest carrier of domestic passengers in the United States.
But Kelly failed to invest in technology.
Southwest flight and ground crews are stuck using 1990's era systems and processes, which include CALLING IN to report your location, book hotels, and receive assignments.
It's hard to believe Southwest doesn't have an app for that.
How could this be? How could anyone let the technology get that outdated?
After learning about Kelly's background, it all made sense. Kelly's training as an accountant gave him blinders when it came to technology.
Tech is mostly intangible, and intangibles are usually nowhere to be found on the balance sheet.
Accounting theory needs to do a better job of valuing intangibles.
And I suspect that's why Kelly and his COO (also an accountant by training) didn't invest in tech for Southwest. They see the world through the lens of GAAP financials, and GAAP is stuck in the past.
