The Legacy of Herb Kelleher, Cofounder of Southwest Airlines

Here is an excerpt from an article written by Bill Taylor for Harvard Business Review and the HBR Blog Network. To read the complete article, check out the wealth of free resources, obtain subscription information, and receive HBR email alerts, please click here.

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Most everyone who met Herb Kelleher, the larger-than-life cofounder and longtime CEO of Southwest Airlines, has a story about his or her initial encounter with the man, so I’ll begin this reflection on his legacy with mine. It was the late 1980s. I was a newly minted editor at HBR, fresh out of business school, and I was attending a big, prestigious (and, to be honest, rather boring) conference on corporate strategy in New York City.

After a morning of tedious three-ring-binder presentations from executives, and stuffy lectures by professors, it was time for the keynote speaker. Herb walked to the podium, lit a cigarette, poured a glass of Wild Turkey bourbon, and delivered what remains the most hilarious, baudy, utterly brilliant CEO speech I have ever heard. When I spent a little time with him after the talk, I realized immediately that I was in the presence of leadership greatness — an entrepreneur who was as smart as he was sassy, as competitive as he was human, as consequential as he was approachable.

Herb Kelleher died last week at the age of 87, and with him went a true business original. As I take stock of his life and legacy, what strikes me is how much all of us can learn from what he created and how he led—that you can create vast economic value based on genuine and generous human values, why what you hope to achieve in the marketplace must be reflected in what you build in the workplace, how in an age of disruption and transformation, simplicity and consistency matter most.

Southwest’s performance since it began as a public company in 1971 is the stuff of business legend. In more than 45 years, in an industry famous for red ink and high-profile bankruptcies, Southwest has never had a money-losing year — ever. Thirty years after Southwest went public, Smart Money magazine concluded that it had been the best-performing stock over those three decades — better than IBM, Merck, or other alluring names. A $10,000 investment in the Southwest IPO was worth $10.2 million thirty years later.

But here’s what’s so vital for the rest of us to understand about what Herb Kelleher built — the essential piece of his legacy. To him, Southwest Airlines was never just a company. It was a cause. The goal was not just to keep fares low and fly to more cities. The goal, in his words, was to “democratize the skies” — to make it as easy, affordable, and flexible, for average Americans to travel as it had always been for business travelers and the affluent. That mission may seem quaint now (mainly because Kelleher succeeded), but back when he started it was a revolutionary aspiration — and an essential contribution to America’s quality of life.

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Here is a direct link to the complete article.


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