Friday, July 20, 2007

Southwest's Kelleher, More Than a Good Time

That motorcycle maniac pictured on the left is Herb Kelleher, co-founder and executive chairman of Southwest Airlines. It's not unusual for Kelleher to be photographed in something other than a grey pin-striped suit. Over the years, he's built a reputation for being the Harry Caray of Corporate America, a cigarette-smoking jester, who enjoys an occasional splash of bourbon.
Urban legends follow Kelleher. He wrote his discount airline business plan on a cocktail napkin. And, when he was younger and not feeling any pain, Kelleher would show up at Dallas' Love Field, Southwest's Texas hub, at 3 A.M. or so to help the baggage handlers load the planes.
However, that raucous image doesn't really do justice to Kelleher, who this week announced he was retiring as Southwest Airlines' chairman within a year. Kelleher is one of the modern era's few true business visionaries--a man who saw the burgeoning market for discount air travel and knew how his company would fill that need. And he did it long before anyone, especially Wall Street, saw the demand coming for a nationwide discount airline.
As a pup reporter covering airlines in the mid-1980s for the now-defunct Dallas Times Herald, I occasionally talked one-on-one with Kelleher. At his headquarters one time, he steered me toward a U.S. wall map covered with colored-tipped pins that represented potential Southwest markets. Like a magician, Kelleher waved his hand over the Midwest and Upper East Coast regions and said something like, "This is where the population is and this is where we have to be."
Bear in mind this was when Southwest was flying within Texas and a few spots in adjoining states. No one, except Kelleher and his team, saw his airline becoming the national force it is today.
He grew the airline by flying under his large competitors's radar. While the major airlines like United and American focused on flying from giant hubs, such as Chicago's O'Hare International and Dallas-Fort Worth International Airport, Southwest was gamely flying point-to-point routes from Midway Airport and Love Field and offering cut-rate fares. (Other under-utilized, second-tier airports would be added.)
In doing so, Southwest reinvigorated the communities surrounding these older airports and made money for itself. Indeed, the revitalization of Midway Airport occurred because Kelleher's airline stepped up and saved the city's bacon by committing to a major expansion after the hometown Midway Airlines went bust.
Despite his fun-loving image, Kelleher ran a tight ship. Pilots, flight attendants and ground crews were expected to perform and meet Southwest's taut turnaround timetables and standards. Indeed, in an industry known for acrimonious labor relations, Southwest's management-worker troubles have been relatively few.
Much of that has to do with the Kelleher-inspire corporate culture and intense employee loyalty. During my Texas stint, Southwest workers, with a hint of pride, would talk of a hair-pulling brawl between a Southwest flight attendant and her counterpart from competing American Airlines. Why? Apparently, the American flight attendant made an insulting remark about Southwest and in Kelleher Country, them's fightin' words!
(In all fairness, I heard the same talk about a Braniff vs. American flight attendant. Who knows?)
One thing is certain: Kelleher is no stranger to a good scuffle. In Dallas, he beat back the competition when rival airlines, such as Muse Air, began encroaching on Southwest's territory. Other discount airlines, like Peoples Express, came and went because they didn't have Southwest's business savvy or capital reserves.
Kelleher also spent a good part of his airline career battling with the federal government. He was seeking to repeal a rule that limits Southwest flights from Love Field. Former House Speaker and fellow Texan Jim Wright backed that law so Southwest wouldn't hurt DFW International Airport or its main tenant, American Airlines.
The one thing Kelleher didn't do very well was retire. Over the years, a procession of top Southwest executives, who thought they would become CEO or Chairman, have come and gone.
Still, all good things must come to an end. That includes Kelleher's executive reign at Southwest.
But you know what? As the actual retirement date approaches, I wouldn't be surprised if Kelleher changes his mind and sticks around a little longer as chairman
"I was only joking about leaving" he could say.
And we'd believe him.