Equip

The story of Southwest Airlines begins in 1966 when Texas businessman Rollin King suggested to his attorney, Herb Kelleher, the idea of starting a low-cost airline that would exclusively serve cities in Texas (Gibson & Blackwell, 1999). Southwest Airlines (SWA) launched its first flight five years later in 1971 (1999). Over more four decades since the airline was first incorporated, Southwest Airlines has grown from a small fleet of four airplanes and a crew of fewer than 70 employees (1999) to the second largest US air carrier (2016), operating more than 700 aircraft with a workforce of 55,000 employees serving more than 100 destinations worldwide (Southwest Media, 2017). The airline has maintained more than 40 years of continuous profitability (Holmes, 2016). Despite facing early adversity, the airline became a thriving industry leader under the visionary and innovative leadership of Herb Kelleher (Gibson & Blackwell, 1999). Kelleher, called "energizer bunny of the skies" (Jones, 1999), successfully guided the company with his indomitable spirit and sense of innovation.

From Risky Venture to Industry Leader

Herb Kelleher is a gifted storyteller who speaks with candor and humor. In a recent interview with National Public Radio (2017), he quips about how he enjoys Wild Turkey bourbon and cheese crackers while he recounts the early of Southwest Airlines. Herb Kelleher pursued his undergraduate degree in English Literature at Wesleyan University and for his undergraduate work and then went on to attend NYU where he earned his law degree (Gibson & Blackwell, 1999). Following his education, he moved with his wife to San Antonio, Texas where he began his law career (Gibson & Blackwell, 1999). While practicing at his law firm in Texas, Rollin King, a Texas businessman, hired Kelleher in 1966 for legal counsel (Gibson & Blackwell, 1999). It was Rollin, owner of a small charter airline, who first suggested the idea to Kelleher of creating a low-cost airline which would only serve cities in Texas (Gibson & Blackwell, 1999). King’s idea was based on the success of a similar airline called Pacific Southwest Airlines (NPR, 2017a). The two then discussed the idea over cocktails (Gibson & Blackwell, 1999). Initially, Kelleher (NPR, 2017) observes he was skeptical about idea, however after short period of consideration, Kelleher agreed to the risky venture.

Even though Kelleher (NPR, 2017) had no experience in the airline industry, he decided this pursue out of a sense of curiosity, adventure, challenge and idealism (NPR, 2017). Kelleher (NPR, 2017) wanted to get out away from the way airlines were traditionally operated in order to create an different kind of airline. He recognized the market need for affordable flights and also believed in free enterprise and he “wanted to validate it” (NPR, 2017). Kelleher (NPR, 2017) notes Texas, a large state with several major cities, was especially suitable for the type of intrastate flights that required less regulatory approval. Southwest Airlines was officially incorporated in 1967 and soon afterward its competitors began political and legal battles to stop Southwest Airlines from launching service (Gibson & Blackwell, 1999).

More than four years were spent in rigorous court proceedings before the airline was finally victorious (NPR, 2017). Kelleher (NPR, 2017) recalls it took “a little purtinacity” to continue the legal battles. Kelleher (NPR, 2017) agreed to litigate for free while also continuing to work with his own law firm while the litigation continued. Kelleher refers to the experience as a battle of “David against the Goliaths” (NPR, 2017). The airline finally launched its inaugural flight from Dallas to San Antonio in June, 1971 (NPR, 2017). Initially, SWA began with four planes serving three cities – Dallas, San Antonio, and Houston (NPR, 2017). Soon after beginning operation, the airline was forced to reduce the fleet from four to three planes in order to meet payroll (NPR, 2017). To accommodate for the shortage of a plane, Kelleher decided upon a plan to operate aircraft with 12-hour days while maintaining 10 minute turns, or turnaround time, at each destination to insure flight schedule was maintained (NPR, 2017).

By necessity, a priority on innovation to ensure productivity and profitably (Gibson & Blackwell, 1999). In addition, to accommodate the quick turns, as well as to further economize, Southwest Airlines did not offer on-board meals (NPR, 2017). Under Kelleher, the airline also streamlined operations by maintaining only one type of aircraft in its fleet, the Boeing 737 (Gibson & Blackell, 1999). This helped to insure more efficient service and maintenance because all of the airplanes use the same parts (Gibson & Blackwell, 1999). These early innovations, which were unique to Southwest Airlines, proved highly effective and are still in use by the airline.

Southwest Airlines did things differently in other ways as well. Herb Kelleher placed a high value on creating a fun and positive environment for both customers and employees (NPR, 2017). Southwest Airlines received notoriety for its “friendly, often zany” service (Gibson & Blackwell, 1999). Kelleher led the way for type of coporate culture through his natural optimism and good sense of humor (Wamsley, 1999). Employees wore non-traditional uniforms (Wamsley, 1999), were encouraged to tell jokes, play pranks (Fotsch & Case, 2017), dress up in costume (Walmsley, 1999), and even sing during flights (Kasperkevic, 2012). These clever and fun-loving approaches have helped to define the corporate culture and customer engagement over the years (Fotsch & Case, 2017).

Distinguished Service

Kelleher also placed a high priority customer service as well as empowering employees to go beyond the guidebook to resolve customer concerns (NPR, 2017). Southwest became known for its customer service and over the years has regularly been awarded top rankings by JD Power (http://www.jdpower.com/); the airline recently recognized as the top low-cost carrier in the US according to J.D. Power 2017 North America Satisfaction Survey. Stories abound about extraordinary customer service at Southwest Airlines. Writer Micah Solomon (2017) describes a situation in which after observing the seeing eye dog of a blind passenger hit by a taxi at the airport, a Southwest Airline employee took quick action – he bandaged the dog’s bleeding leg and stayed with the dog during a taxi ride to the vet hospital, saving the dog’s life (Solomon, 2017). In another example, a man approached a flight attendant about proposing to his girlfriend on board the flight (Morell, 2012). The flight attendant immediately gave him a bottle of champagne and demonstrated how to use the intercom system, insuring a special event for the man and his soon-to-be fiancé.

Stories like this are not surprising given the thorough hiring and training process for employees. Kelleher describes the careful hiring process to insure the airline is hires the right people (NPR, 2017). Group interviews are conducted to observe how individuals interact with their peers and top-performing employees are including in the hiring decisions to insure the most qualified candidates are selected (NPR, 2017). Kelleher notes three qualities he looked for in potential employees – a warrior spirit, a servant heart and a fun-loving attitude (NPR, 2017).

Once hired, new employees are provided encouragement, training and and support. Employee service and dedication is valued at Southwest Airlines notes Kelleher (NPR, 2017). In 1973, Southwest Airlines became the first airline to introduce a profit sharing program (NPR, 2017). Kelleher also notes the priority he placed on maintaining a cooperative relationship with Southwest’s unionized workforce (NPR, 2017). Finally, employee birthdays, anniversaries, and special events are recognized and photographs are displayed at the headquarters which reinforce the value and the “family feeling” (Gibson & Blackwell, 1999). Kelleher consistently made his employees feel valued and important through his consistent recognition (Gibson & Blackwell, 1999). Greg Roessner, an employee of Southwest Airlines, writes Kelleher exemplifies “personal warmth, a dedication to excellence, and the sheer hard work that brings that committment to fruition” (Gibson & Blackwell, 1999). Kelleher’s leadership insured a friendly and engaging corporate culture and a dedicated workforce (Gibson & Blackwell, 1999). Southwest Airlines has been regularly recognized as one of the top U.S. employers (Southwest Airlines, 2017).

Conclusion

Herb Kelleher’s vision of transforming the airline industry with a profitable low-cost carrier as well as value on both employees and customers made Southwest Airlines an incubator for innovation. Beginning from the first days, innovation and creativity were key to the success of the airline. The innovative developments at Southwest are numerous – deploying 10-min turns for aircraft, operating a fleet of exclusively Boeing 737 aircraft, replacing full meal service with peanuts and soda, and using boarding passes instead of seat assignments. In addition, Southwest Airlines was the first to introduce electronic ticketing (Wade, 1997) as well as the first airline to establish the presence of a home page on the world wide web (Southwest Airlines, 2017). Later developments were marked by the development of electronic boarding passes and an onboard Wi-Fi network (Southwest Airlines, 2017). Kelleher speaks clearly and eloquently about the character of an innovator.

During an interview at Stanford Graduate School of Business (2009) he speaks of being an innovator – it is “a little bit of a risk taker, a little bit of a visionary, and a little bit of idealist”. With the those simple words, Kelleher eloquently states essence of a transformational leader. Kelleher, whose conviction, vision, and faith enabled him to face –and defeat – modern-day Goliaths (NPR, 2017).

Herb Kelleher, upon his retirement, served as Chairman Emeritus (Southwest Airlines, n.d.). As founding father of SWA, he brought his guiding influence to all that has been done at Southwest Airlines. His value and respect for others, his innovative ideas, his vision served as a powerful influence over the course of his long career. Through his persistence and vision, Kelleher created a company which serves as a model for quality, efficiency and value.  In 2019, Kelleher passed away at the age of 87. Herb Kelleher’s legacy of innovation and entrepreneurialism will long be remembered.  Kelleher, described as an “American icon and a maverick in the airline industry” left a legacy of innovation and entrepreneurialism that will long be remembered.

Editorial Note: Article has been adapted from research paper originally submitted by author for completion of coursework for COMS 552, Spring, 2018, Liberty University.

References

Conger, J. A. (2004). Transformational and visionary leadership. In G. R. Goethals, G. J. Sorenson, & J. M. Burns, Encyclopedia of Leadership. Thousand Oaks, CA: Sage Publications.

Eades, J. (2017) This Passenger Singing ‘No Diggity’ Shows us the Brilliance of Southwest Airlines. Inc Magazine. Retrieved from https://www.inc.com/john-eades/this-singing-southwest- passenger-teaches-us-a-lesson-every-company-can-learn-from.html

Freiberg, Kevin and Jackie (2019). 20 Reasons Why Herb Kelleher Was One Of The Most Beloved Leaders Of Our Time. Forbes.  https://www.forbes.com/sites/kevinandjackiefreiberg/2019/01/04/20-reasons-why-herb-kelleher-was-one-of-the-most-beloved-leaders-of-our-time/?sh=6600e5e7b311

Fotsch, B. & Case, J. (2017) How Companies Miss the Boat on Employee Engagement.  Forbes. https://www.forbes.com/sites/fotschcase/2017/09/19/how-companies- miss-the-boat-on-employee-engagement/#286e42af7c81

Gibson, J. W., & Blackwell, C. W. (1999). “Flying High with Herb Kelleher: A Profile in Charismatic Leadership.” Journal of Leadership Studies, 120.

Holmes, F. ( 2016) These are the 7 biggest US airlines. Business Insider. http://www.businessinsider.com/these-are-the-7-biggest-us-airlines-2016-4/#7-spirit-1

J.D. Power. http://www.jdpower.com/

Jones, K. (1999). Herb’s Flight Plan. Texas Monthly.  https://www.texasmonthly.com/articles/herbs-flight-plan/

Kasperkevic, J. (2012). Southwest Airlines Has A Secret Weapon To Make Everyone Love Flying. Business Insider. http://www.businessinsider.com/this-airlines-flight-attendants- vow-planes-full-of-people-by-singing-2012-3

Lieberman, M. (2017). How the Southwest Effect Could Make Flights Cheaper to Hawaii. Travel and Leisure.  http://www.travelandleisure.com/airlines-Reairports/southwest/cheap- flights-southwest-effect-hawaii

Morell, K. (2012) Lessons from Southwest Airlines Stellar Customer Service.  https://www.americanexpress.com/us/small-business/openforum/articles/lessons-from- southwest-airlines-stellar-customer-service/

NPR (2017).  NPR How I Built This – Southwest Airlines: Herb Kelleher (Business) [Audio Interview]. https://www.youtube.com/watch?v=NWbDyp6mmXA&t=1650s

Reingold, J. (2013) Southwest’s Herb Kelleher Still Crazy After All These Years. Fortune. http://fortune.com/2013/01/14/southwests-herb-kelleher-still-crazy-after-all-these-years/

Stanford School of Business (2009). Herb Kelleher: Managing in Good Times and Bad. https://www.youtube.com/watch?v=wxyC3Ywb9yc&t=1297s

Solomon, M. (2017). Three Wow Customer Service Stories from Zappos, Southwest Airlines, and Nordstrom. https://www.forbes.com/sites/micahsolomon/2017/08/01/three-wow-customer-service-stories-from-zappos-southwest-airlines-and- nordstrom/#5804eb852aba

Southwest Media (2017). Corporate Fact Sheet. https://www.swamedia.com/channels/Corporate-Fact-Sheet/pages/corporate-fact-sheet

Southwest Media (n.d). Herb Kelleher.  https://www.swamedia.com/channels/Officer-Biographies/pages/herb_kelleher

Thomas, M. (2015). Strategic principles at southwest airlines. Strategic Direction, 31(8), 10- 12. doi:10.1108/SD-03-2015-0047

Wade, B. (1997). E-Tickets begin to catch on.  http://www.nytimes.com/1997/08/10/travel/e-tickets-begin-to-catch-on.html

Walmsley, A. (1999). “Plane crazy: Southwest airlines’ herb Kelleher and his crew break all the rules – and beat the pants off their competitors doing it.” Report on Business Magazine, 16(6), 62.