Craig L. Williams

Thomas Jones

MGT 350

December 2, 2001

Herb Kelleher and Southwest Airlines

            A legend within the airline industry, Herb Kelleher has taken Southwest Airlines from a doodle scratched on a cocktail napkin to being the most successful airline in history (Brooker).  When you start to sift through the numerous magazine articles about Herb Kelleher and even more about Southwest Airlines, you begin to see how this happened.  Kelleher talks about "a unique corporate culture, which he believes is unquestionably the source of Southwest's success" Colvin).  Kelleher has instilled this corporate culture into the very soul of the company which allows management at all levels to make decisions based this value (McCall and Kaplan, 48).

            But what is this underlying corporate value.  Very simply put, it's LOVE.  Or LUV which is the company's stock exchange symbol.  Originally it started as a marketing ploy because Southwest was founded out of Dallas's Love Field named for Lieutenant Moss Lee Love.  Kelleher took that and made it into a company value.  Southwest Airline employees LOVE what they do and Kelleher LOVES them for doing what they do.  And it shows.  Southwest Airlines is ranked the 4th Best Company to Work For in the 2001 Fortune ranking.  The next closest airline is Continental ranked at 18th.  Also, passenger's LOVE to come back again and again to Southwest because of their employee attitude.  The simple notion was to get your passengers to their destinations, when they wanted to, on time, at the lowest possible fare and make sure people have a good time doing it, people will fly with your airline again (We Weren't Just Airborne Yesterday).  Proven by the fact that Southwest has had the fewest Customer complaints for over ten consecutive years (Department).

            Kelleher, an attorney, was trained in the arts of Critical Thinking before his time at Southwest Airlines.  For years, Kelleher argued for Southwest Airlines against the big, established airlines in court when he was the airline's General Council.  His style suggests a Panning-for-gold approach (Browne and Keeley, 4).  Always asking the critical questions and finding ways to even skirt around restrictive Federal Aviation Administration (FAA) lottery regulations during the air-traffic controllers strike in 1982 (Brooker), provides us with clues.

            One of the best examples of a proactive approach to his company recently.  Kelleher noticed an increase in non-fuel related expenses and took action to watch those costs.  He stated that you have to "manage in good times so that you're ready for bad times" (Brooker).  In McCall and Kaplan we read about do it sooner (56) which clearly outlines this style of proactive approach.  In the long run, it also has helped Southwest Airlines turn a profit in every year since it's first.  Especially these past few years which has seen the airline industry bleed some major amounts of red ink, Southwest Airlines continues to post profits.  Another potential problem that Kelleher dealt with sooner than later.  Putting into practice McCall and Kaplan's principle, "Act now and save yourself bigger trouble later" (56).  Clearly the airline industry is in a lot of big trouble but Southwest Airlines continues to fly right through it.  Never allowing themselves to get complacent during the good times. 

Southwest Airlines has never had any layoffs.  Kelleher believes that you are only going to have short term gains by laying people off.  In the long term, you loss much more than you would have hoped to gain.  With Southwest Airlines one of the most unionized airlines, you would think they would have issues with the labor unions.  Teamster leaders never have to discuss job security for their members.  They know it's not an issue.  What Kelleher gains by this, is employee satisfaction, employee trust in the company and most importantly, employee loyalty.  Something that is hard to put a price tag on in this (or any) industry.

Information is important to any CEO.  Kelleher makes it a point to get out and talk with the rank and file employee's.  It might just be a flight back from Washington, Kelleher honestly enjoys talking with the rank and file about what is going on in their area.  When he does need to make quick decisions, he can make them from a knowledge base that is healthy with input from his workers as well as management. 

This New Jersey-born Irishman loves battles, but especially he loves to win the wars.  Kelleher quoted General Patton "War is hell, and I love it so" (Brooker).  This passion for battle jumps right off the pages of McCall and Kaplan "They love to win -- but wars, not battles" (86).  Even today as Kelleher steps down as CEO but stays on as Chairman of the Board, he is looking forward to continuing the "war" by fighting for Southwest Airlines in Washington.  This is something he clearly loves to do. 

I think I would sum up Kelleher's business methods as this:

        LUV

        Treat your employees like your customers

        Manage in good times so that you're ready for bad times

These are at the heart of what Kelleher has left the airline industry.  Even today, another new airline has taken to the sky.  Jet Blue is using a familiar formula for success that helped Southwest get to where it is today.  At 70, Herb Kelleher is very pleased with how his decisions have helped make Southwest what it is today.


Works Cited

Best Companies To Work For. (2001, January 8). Fortune. [Online]. Available:

http://www.fortune.com: (2001, November 26).

Brooker, Katrina. (2001, May 28). Herb Kelleher: The Chairman of the Board Looks Back.

Fortune. [Online]. Available:

http://www.fortune.com/mag_archive/2001/mag_archive.5.28.01.html: (2001, November

26).

Browne, M. Neil. And Keeley, Stuart M. Critical Thinking: Asking the Right Questions. Special

edition. Boston: Pearson Custom, 2000.

Colvin, Geoffrey. (2001, November 12). Value Driven: What's Love Got To Do With It?.

Fortune. [Online]. Available: http://www.fortune.com/mag_archive/2001/mag_archive.11.12.01.html: (2001, November 26).

Department of Transportation. Air Travel Consumer Report. (2001, November 27).

Fortune 500. (2001, April 14). Fortune. [Online]. Available: http://www.fortune.com: (2001,

November 26).

McCall, Jr. Morgan W. and Kaplan, Robert E. Whatever it takes: The realities of managerial

decision making. 2nd ed. Upper Saddle River, NJ: Prentice-Hall, 1990.

Southwest Airlines Fact Sheet. (2001, November 1). Southwest Airlines. [Online]. Available:

http://www.southwest.com/about_swa/press/factsheet.html: (2001, November 26).

We Weren't Just Airborne Yesterday. Southwest Airlines. [Online]. Available:

http://www.southwest.com/about_swa/airborne.html: (2001, November 26).

 


Works Consulted

Cosgrove, Gary. Personal Interview. 2001, November 25.

Editor's Desk: Herb's Muse. (2001, May 28). Fortune. [Online]. Available:

http://www.fortune.com/mag_archive/2001/mag_archive.5.28.01.html: (2001, November

26).

Special Report: The Top 25 Managers. (2001, January 8). Business Week. 3714. [EBSCOhost].

University of Phoenix Online Collection. (2001, November 26).