Legends of Airline CEO - Herb Kelleher
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Herb Kelleher (Picture embedded from Babson Insight on 17 May 2009)

Herbert D. Kelleher is the co-founder, former CEO, chairman of the Southwest Airlines. He recently stepped down the role of chairman and resigned from the board of directors in May, 2008 (Wikipedia, 2009 8). His charismatic leadership built an excellent corporate culture at Southwest that has led to the success of Southwest Airlines since the airline began with three Boeing 737s and less than 70 employees in 1971 (BusinessWeek, 20032). For the last three decades, his passion and enthusiasm has grown the airline to be the most profitable airline and the top five Most Admired Corporations in America. He is now a role of model for an airline CEO or perhaps the best business entertainer in the world.

School Days

Herb Kelleher was born on 12 March, 1931 near Camden, New Jersey. He went to Haddon Heights High School where he showed his quality of leadership as a captain of basketball team and school body president (Chasing the Sun, 20093). Herb Kelleher worked also for six summers as a part-timer at Campbell Soup Company, where his father was General Manager. He experienced several job roles in the company such as a soup chief, warehouse foreman and part-time financial analyst (Chasing the Sun, 20093).

After graduating from the high school, Kelleher attended Wesleyan University where he achieved a BA English Literature, and he continued to study at NYU law school (BusinessWeek, 20032). During his law school days, Kelleher lived in a little apartment on Washington Square where he enjoyed entertaining people and having an instant party to welcome to meet new people. This may come from the root of his outstanding leadership for Southwest Spirit.

Before starting his first law career to join a law firm in Newark, New Jersey, he has married to his wife from Texas whom he had met in school. But Kelleher wanted to be an entrepreneur as a lawyer or a business man, so he turned down the offer from the law firm and decided to move with his wife to San Antonio, Texas in the mid 60s BusinessWeek, 20032). Actually, it was his turning point and a big step for his life.

Birth of Southwest Airlines

After moving to Texas, Kelleher started his law firm and had a few clients at the time.
One of his clients was Texas business man (who became co-founder of Southwest), Rollin King. Over 37 years ago, King described a new kind of airline’s concept to Kelleher over dinner by drawing on a paper napkin (Wikipedia, 2009 9). King’s idea was: “if you get your passengers to their destinations when they want to get there, on time, at the lowest possible fares and make darn sure they have a good time doing it, people will fly your airline” (Wikipedia, 20099). Kelleher liked his idea and decided to help him to start the new airline. In addition, they got together to make some of paradoxical airline management at that time such as offering low fares by eliminating unnecessary services, point-to-point route scheduling system and using secondary airports by avoiding traffic congestion and competition with major carriers.

At this time, it was just a few years before constituting the Airline Deregulation of Act of 1978 in the U.S., large carriers dominated their routes and fares were controlled by the government board. You can see how great their idea was foresight; because nobody thought the rules would be changed. Some of incumbent carriers such as Braniff, Trans-Texas and Continental Airlines began to legal actions, in order to keep Air Southwest on the ground for three years (Access my library, 19991). However, Southwest eventually won in the Texas Supreme Court and the most unique airline got a legal right to fly in 1971 (Access my library, 19991).

Leadership at Southwest

In the airline industry, we can say that an outcome of success depends on creating a good quality of financial intelligent and leadership by top management in an organization.

Herb Kelleher is often described as a charismatic leader or an ideal role model for CEO.
His leadership consistently contributed to building Southwest’s reputation by inspiring his employees for delivering a high quality of customer service. Also, he often used to get on aircraft and serve his customers by himself and entertain them in the cabin (BusinessWeek, 20032). In general, we assume that CEO works in his office or attends meetings, but Kelleher was devoted to work with his employees whenever he had a time, because he love to serve customers and love his employees and praise them with respect. As a result, the airline’s employees are motivated to perform high productivity in their jobs; therefore the airline maintains excellent customer satisfaction and the least customer complaints in top ratings in the U.S (Wikipedia, 20099).

His outstanding leadership is not only coming from caring people, but he used unique ideas to build the airline management and its corporate culture. For example, in 1972, passengers had to transfer Houston’s Hobby Airport from Houston intercontinental in all Houston service (Southwest Airlines, 20095). Kelleher suggested "why should our Customers have to drive 45 minutes to take a 40-minute flight?" (Southwest Airlines, 20095) Then, Southwest created ‘Ten-Minutes Turn’ strategy. This notion solved the inconvenient transfer problem and quick turns increased operation productivity, which becomes one of the key components as a low-cost model.

Kelleher also brought some of the unique methods to create its corporate culture. For example, female flight attendants dressed in hot pants and go-go boots or costumed like long-legged dancers, majorettes, and cheerleaders, those who serve customers and sing a Southwest Airlines’ song in cabin (Wikipedia, 20099). This is something special about Southwest. He aimed to create ‘fun flight’ and intangible service that other airlines cannot imitate.

Furthermore, Kelleher emphasizes his famous phrases “people come first” and “everybody is a leader no matter what their job is”, which means employees are the most valuable asset at Southwest (Leader Network, 20074). But, what kind of person does he want to recruit? In BusinessWeek interview (2003), Kelleher said that they want someone who is not a self-centered person, but must have ‘humble attitude’ and ‘business smarts’ for work. The main reason is new freshman must learn a lot of things such as handling and serving customers, the most importantly, they should love what they are doing for customers. Of course, Southwest hires business graduates with MBA degrees, but they also recruit someone with less education, less experience, less expertise if he/she has the quality of personality that the airline wants.

Another thing is Kelleher applied the first profit sharing plan to Southwest in the U.S airline industry. Employees own 10 percent of the company stock, but it turns out an excellent plan (Wikipedia, 20099). The employees are more motivated to work hard for their airline and their customers, because they are the shareholders and they earn more salary if more customers are satisfied to fly.

Retirement from Chairman

Over the last three decades in his career at Southwest, Kelleher achieved numerous titles and success in the commercial airline industry. On 21 May, 2008, he finally decided to step down his present post as Chairman and resigned from the board of directors, but remains as a full time employee for another five years (Wikipedia, 20098).

Documentary videos about Herb Kelleher

The U.S documentary program, 60 Minutes focuses on Herb Kelleher, CEO of Southwest Airlines. This is interesting to see what kind of person he is, and you could feel his energetic and colorful personality. Also, you could find out why every employee always loves him.

Part 1 of 2


Video embedded from YouTube on 17May2009 (see 60 Minutes, undated – a6 )

Part 2 of 2


Video embedded from YouTube on 17May 2009 (see 60 Minutes, undated –b7)

References
1. ACCESS MY LIBRARY. (1999). Flying high with Herb Kelleher: A profile in charismatic leader. Retrieved from
Access my Library on 17 May 2009.
2. BUSINESSWEEK. (2003). Herb Kelleher on the record. Retrieved from
BusinessWeek on 15 May 2009.
3. CHASING THE SUN. (2009). Herb Kelleher. Retrieved
Chasing the Sun on 17 May 2009.
4. LEADER NETWORK. (2007). The resource for leaders, Herb Kelleher. Retrieved from LeaderNetwork on 14 May 2009.
5. SOUTHWEST AIRLINES. (2009). History: We weren’t just airborne yesterday. Retrieved from Southwest Airlines on 16 May 2009.
6. 60 MINUTES. (undated – a). ‘Herb and his airline’ part 1. Retrieved from YouTube on 17 May 2009.
7. 60 MINUTES. (undated – b).‘Herb and his airline’ part 2. Retrieved from YouTubeon 17 May 2009.
8. WIKIPEDIA. (2009). Herb Kelleher. Retrieved from
Wikipedia on 15 May 2009.
9. WIKIPEDIA. (2009). Southwest Airlines. Retrieved from
Wikipedia on 16 May 2009.

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