The choice for the second Two-Bit Bio comes from a recent flight on Southwest Airlines, which is celebrating its 35th anniversary as one of the most successful airlines in history. The growth and success of Southwest wouldn’t have been possible without the guidance and leadership of Herb Kelleher, whom we’ll learn about here.
Herb Kelleher, b. 1931, co-founder, Chairman, former CEO of Southwest Airlines
- Born and raised in New Jersey. Bachelor’s degree from Wesleyan University and JD from New York University.
- Grew up with his mother, who stressed that individuals matter and the value of working for the common good.
- Worked as a clerk for the New Jersey Supreme Court and in private practice as an attorney.
- Started Southwest Airlines with Rollin King in 1967.
Challenges & Successes
- When Southwest started, prices for interstate air travel were dictated by the federal government. The original idea behind Southwest was to sidestep the regulations and offer greater value to customers by operating only within Texas.
- Pushed the concept of point-to-point flights between smaller airports which allowed quicker turnaround times, as opposed to the traditional hub-and-spoke model centered around major metropolitan airports.
- Established carriers, fearing the new business, filed lawsuit after lawsuit to prevent Southwest from ever flying. As investors balked, Kelleher (also the general counsel at the time) volunteered to work without pay and eat the legal costs himself.
- After 4+ years of legal battles, Southwest Airlines finally starts flying in 1971.
- Through sticking to his principles and by force of personality, Kelleher built the widely-respected company culture of Southwest, focusing on shared ownership and empowering employees to go above and beyond for the customers.
- In 1988, Southwest was the first airline to win the one-month Triple Crown service award for Best On-Time Record, Best Baggage Handling, and Fewest Customer Complaints. Southwest goes on to win 5 consecutive annual Triple Crown awards from 1992 to 1996.
- Kelleher helps Southwest pioneer senior discounts, Fun Fares, same-day air freight delivery, and ticketless travel.
- Employees matter the most – not customers nor shareholders. Great, motivated employees will do what it takes to make the customer happy, which in turn will make shareholders happy.
- Personality matters. A company should have a personality that a customer will enjoy, remember and prefer for her next purchase. A company must build trust with the employees so they will be empowered to act as necessary on behalf of the customer. Towards the latter, Southwest has a track record of providing the best job security (as well as ownership and benefits) in the industry.
- Inspire your employees towards the greater good. In Kelleher’s words, “One of the managers in our People Department once said, ‘The important thing is to take the bricklayer and make him understand that he’s building a home, not just laying bricks.’ So we take the building a home approach: This is what you’re doing not only for yourself but for society: giving people who’d otherwise not be able to travel the opportunity to do so…”
This summary is just the 30,000-foot view of Herb Kelleher’s lessons and accomplishments. He’s accomplished an amazing number of things and has the outgoing personality to talk about most of them. Some good resources for further reading are:
- Herb Kelleher on the Record (BusinessWeek interview)
- A Culture of Commitment by Herb Kelleher
- Chasing the Sun (PBS series on innovators)
- Southwest Airlines history
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