Herb Kelleher Co-Founder of Southwest Term Paper

  • Length: 12 pages
  • Sources: 12
  • Subject: Transportation
  • Type: Term Paper
  • Paper: #51656532

Excerpt from Term Paper :

During the year 1972, the All Houston service was transferred to Houston's Hobby Airport from Houston Intercontinental. This move was prompted by Kelleher who said that after all why customers have to drive 45-minutes to take a 40-minute flight. With several illustrious years, the year 1977 saw SWA carrying its fifth million passengers and its shares are listed in the NYSE as "LUV." In 1978, Kelleher took the reigns from the outgoing President Lumar Muse and becomes the interim CEO and the Chairman of the Board. SWA's airline N52 is named as the "Herbert D. Kelleher" to honor the co-founder of the airline. In the later part of the year, Kelleher is given the post of permanent Chairman of the Board. ("We weren't Just Airborne Yesterday: Times flies when you're having fun," 2007)

The year 1982 saw Kelleher become the permanent President, CEO and the Chairman of the Board for SWA and the airline expands its routes to cover San Francisco, LA, San Diego, Las Vegas, and Phoenix. In 1985, SWA becomes the most convenient point-to-point carrier in the country and in 1986; the airlines completed 15 years of low fares, good times, and high spirits. Passengers of SWA enjoy more fun with the launching of Fun Fares and more than 13 million flyers assume the company as "The Company Plane." The starting of the 1990s witnessed SWA touching the billion dollar revenue and is recognized as the "Major" airline and in 1991 SWA completed two decades of fruitful business. In 2005, SWA declared its 32nd straight year of profitability which is an industry record and started giving out online boarding passes through its website. It also launched the pioneering direct link to customer's desktop delivering live-updates regarding the hottest deals, and also the southwest gift card. Presently it flies more than 3,000 daily flights. ("We weren't Just Airborne Yesterday: Times flies when you're having fun," 2007)

During November 2003, Kelleher was awarded with the Lifetime Achievement Award by the Strategic Management Society -- SMS, the esteemed international association of academic and corporate strategists. In an industry where it is difficult to stay afloat, let alone earn profits, SWA is the only airline with 30 consecutive years having profitability where no other airline company has been capable enough to earn profits for even five years in a row. The achievements of SWA, under the able stewardship of Kelleher are ascribed to its continuous focus. From the very beginning, the strategy at SWA has been to bring passengers not from rival airlines, but from other means of transport such as cars, buses, and trains by giving them the opportunity to a mode of transport which has the lowest cost and is also the fastest service available. Its hallmark of success has been the groundbreaking point-to-point service against the conventional hub-and-spoke model. (Chuck, 2004)

Nevertheless, the core of SWA's success is its culture and employees. According to Kelleher who is popular for his readiness to party very much with his staff holds the view that the spirit of an individual is the most powerful entity of all. It is his leadership style which maintains that three things interested him the most. The lowest costs in the industry, the best customer service which is a very crucial constituent of value and intangibles which is a spiritual infusion. These are the most difficult elements for the competitors to duplicate. It has been the leadership style which prompted SWA to adopt the low fare strategy as the passport to success in any situation. In this manner it enabled more people to fly. The modus operandi has been that when the load factor gets into the 70 or 75% range over a reasonable period of time, the fares are not hiked but new flights and more seats are added. The low cost arrives from the intangibles i.e. through the inspiration which are given to the people and their productivity, the reality that they perceive they are performing something which is truly important and that they enjoy. (Chuck, 2004) very simple philosophy with Kelleher lay in the simple belief that 'treat your employees well and they will reciprocate in the same manner. Keller claims that his people are different and to prove that he ran a campaign in various media like TV, Radio and newspapers that the workforce at SWA was different and they are better and that they are special and they welcome customers. The ad campaign was continued for six or seven years and there was never any complains to the contrary. Another leadership quality of Kelleher is giving vent to the basic personality of everybody while at work. A good example is the flight attendants who sing as they want to do so. Kelleher believes in not trying to train anything different from what one really is. One does not have to be automation when arriving to work. One can just be himself. Kelleher's leadership style is to be humble and open-minded in whatever one does as he believes that unless one is humble and open-minded, he cannot be disciplined and what the company does is establishing a clear and simple set of values which the company conceives. (Chuck, 2004)

Kelleher at no point of time used fashionable titles for empowerment, total quality and so on. This is because Kelleher believed that applying labels to things prevented them from thinking expansively. SWA started out promising to give more to people for less and not less for less, with new aircrafts, best on-time performance and the best workforce who are the most hospitable. Functioning in a strikingly different pattern, Kelleher never did a long-range planning which is a very basic necessity in a lot of businesses. At the time when planning was a buzzword in the airline industry, Kelleher was approached by an analyst ridiculing that SWA was functioning without a definite long-range plan. Keller replied that he had the most atypical plan in the entire industry. It is doing things and that's the plan. What is done by strategic planning is that they define themselves and thereafter redefine themselves. (Chuck, 2004)

Leadership Analysis: Supporting the Leadership style position and characteristics of Herb Kelleher:

Kelleher's unique leadership style enabled to transform SWA to be the fifth-biggest U.S. airline. Its employee centric policies made sure that it did not have to ever lay-off employees in its entire period of functioning. Because of this, the employees of SWA enjoy a casual, fun-natured work atmosphere. The development of the company's culture surfaced while they assumed an open philosophy in which they would not hide anything that includes any of their problems from the employees. An analysis of the leadership style of Kelleher is directly opposite of the several autocratic leaders which have achieved business success. Kelleher never 'ruled' over his employees, but instead, ruled with his employees. It was his belief that leadership is the job of every employee and not the sole exclusive of just the upper level management. He held that every employee must have the capability to determine situation and be capable of acting on their own decisions and employees must be able to lead other employees to arrive at decisions. He described SWA as an 'upside-down pyramid'. Placed at the bottom are the upper management personnel and at the top are the front-line employees. The front line staff is regarded as the experts inside the organization while the top management as the support help group. (Madron; Jopling, n. d.)

Kelleher's capability to lead is backed the leadership offered by all of the employees in the organization. Paying attention to employee ideas enables leadership. The moment employees perceive that they have been heard by their colleagues, they will be keener to listen to ideas from others. Kelleher did not have to take recourse to the dominant command-and-control type of leadership. This is due to the fact that his values and core beliefs are powerful enough to make them look out for varied ways of operating the organizations they lead. And above all, leaders like Kelleher do not merely talk regarding their values, but they walk the talk by constantly and consistently proving them in their behaviors and in the decisions they arrive at. As opposed to the 'participation exercises' supported by the command-and-control leaders, liberating leaders develop 'a culture of dialogue' wherein change is ushered through people-power and soft-systems methodologies. The impact of every member of the organization is being urged to think, act and learn is to continually enhance the competence and creativity of the organization as a whole. (Madron; Jopling, n. d.)

Leadership Development is sometimes seen in terms of education and training, job experience and coaching. The two important components of leadership self-development are self-awareness and self-discipline. It is a fact that self-discipline is responsible for the continuous monitoring of one's behavior to make sure that the necessary self-development happens. Majority of the leadership happens through means other than self-awareness and self-discipline or leadership development…

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