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Chapter 7: Create a Performance-Driven Culture


The rule at Southwest is, if somebody has an idea, you read it quickly and you respond instantaneously. You may say no, but you give a lot of reasons why you're saying no, or you may say we're going to experiment with it in the field, see if it works.

—HERB KELLEHER, Founder and former Chairman, Southwest Airlines

We try to value each person individually at Southwest and be cognizant of them as human beings—not just people who work for our company. What we're really trying to say is, "we value you as people apart from the fact that you work here." That approach has been very helpful to Southwest.


Let's face it, there aren't many chain-smoking, tattooed CEOs leading Fortune 500 companies. But former Southwest Airlines CEO Herb Kelleher is not your typical chief executive. Southwest was founded over cocktails at the St. Anthony's Club, a San Antonio watering hole, in 1966. The idea for the airline was groundbreaking:a budget airline that would fly between Dallas, San Antonio, and Houston. Almost from day one, the company played the role of a scrappy kid fighting off the village bullies. The day after Southwest got its approval to fly, for example, angry competitors petitioned the court for a restraining order to stop it.

The battle went all the way to the Supreme Court, where Kelleher and Southwest got the last laugh. Competitors Braniff and Texas International were indicted for conspiring to put Southwest out of business.

Kelleher took on the role of CEO later, when the company had only 27 planes and was doing $270 million in business. By 2001, the company had 30,000 employees and was a $5.7 billion business. In the fall of 2002, Southwest's market capitalization was 10 times that of American and United combined. Even though the feisty lawyer-turned-airline-chairman handed over the CEO reins in 2001, much of the company today remains the organization he created.

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