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Kelleher on Profit: "A By-Product of Customer Service"

Southwest is a company that is rich in paradox—a large company with a small-company spirit. What does that mean? While many companies take themselves very seriously, Kelleher is saying that it's perfectly acceptable to lighten up, even when you're working—no, Kelleher would say, especially when you're working. Kelleher believes that CEOs need to spend more time with their external and internal customers, informally as well as formally, and fulfill the other requirements of their jobs at night and on weekends. The former Southwest leader estimates that he spent roughly half of his time as CEO with employees and customers. In those sessions, formal and informal, Kelleher urged his employees not to concern themselves with numbers, but instead to focus on service:

We tell our people, "Don't worry about profit. Think about customer service." Profit is a by-product of customer service. It's not an end, in and of itself. It's something that's produced by your efforts and the way that you treat each other and the way you treat the outside world.

A Wall Street analyst once asked the Southwest chief if he was afraid that he was losing control of the organization. Kelleher responded with his usual brand of candor: "I've never had control, and I never wanted it." The CEO went on to explain that in a true environment of participation, managers don't need control:

If you create an environment where the people truly participate, you don't need control. They know what needs to be done, and they do it. And the more that people will devote themselves to your cause on a voluntary basis, a willing basis, the fewer hierarchies and control mechanisms you need.

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