Business Ideas – 3 Lessons from Herb Kelleher – Southwest Airlines By Evan Carmichael
Today we’re going to look at how a young lawyer who seemingly had it all bravely left his job to start his own business. He had to fight over 30 lawsuits and nearly went out of business but he stuck with it and created one of the most respected companies in America. This is the story of Southwest Airlines co-founder Herb Kelleher and the top 3 lessons that you can learn from his success.
“Your people come first, and if you treat them right, they’ll treat the customers right.” – Herb Kelleher
Herb Kelleher (born March 12, 1931) is the co-founder and former CEO of Southwest Airlines. After graduating from law school he did what every new lawyer dreamed of. He clerked for the Supreme Court Justice, joined a law firm, and became partner at a firm in his wife’s home state of Texas. He should have been on top of the world but he was instead itching for a new career as an entrepreneur. One evening Kelleher was having drinks with a client, Rollin King, and that night the two used a cocktail napkin to hatch a new business, Southwest Airlines.
Using Kelleher’s legal experience and King’s business background, Southwest Airlines was set up to run only in Texas to avoid having to follow federal price regulations. Kelleher had found a legal loophole and his competition didn’t appreciate it. Kelleher had to fight off over 30 lawsuits before Southwest Airlines was even able to get a plane in the air. But they prevailed and bootstrapped their way from a company with only 4 planes to being one of the most admired companies in America.
Southwest is consistently named one of the top five Most Admired Corporations in America by Fortune magazine, which also called Kelleher perhaps the best CEO in America. It has never experienced an in-flight fatality and continues to enjoy growing success. Southwest is also the only airline to have over 30 consecutive years of profit, despite the terrorist attacks of September 11, 2001, which threatened the rest of the industry. In 2001, Kelleher resigned as CEO and president of Southwest due to a personal battle with prostate cancer.
Action Item #1: Put Your People First
Action Item #2: Focus Everyone on Customer Service
Action Item #3: Hire the Right People
In the beginning, Southwest had just four planes and 70 employees. All of the legal battles had left the company on the verge of closing down. It forced Kelleher to make a difficult decision: he had to either sell one of the planes or lay off some of his employees. He chose to sell the plane. In return, Kelleher asked his employees to cut gate turnaround times from 55 to just 15 minutes. They pulled it off and Kelleher had clearly set the culture for his business.
“I learned it by doing it, and I was scared to death.”
“Sometimes you need a little courage too just to buck popular opinion.”
“The important thing is to take the bricklayer and make him understand that he’s building a home, not just laying bricks.”