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Herb Obituary: From The Economist

The high priest of ha ha Obituary: Herb Kelleher died on January 3rd

Co-founder and, for 30 years, chairman of Southwest Airlines was 87

Print edition | Obituary

Jan 10th 2019

UNUSUALLY FOR a man who believed in cutting costs wherever possible, Herb Kelleher, the boss of Southwest Airlines, America’s most successful carrier, liked being flexible with trade unions. In 1994, during discussions over an unprecedented ten-year agreement that would freeze pilots’ wages for five years in return for stock options in the airline, he promised Gary Kerans, president of the pilots’ association, that if the contract went through, he would freeze his own salary and bonus for five years as well. Chairman and pilots should get the same treatment. The deal was done.

Born in New Jersey, he studied English and philosophy at Wesleyan University and then law at New York University. It was his wife, Joan, whom he met on a blind date, who persuaded him to set up a law firm in Texas. Southwest Airlines was born, not on the back of a cocktail napkin, as he later liked to boast, but when one of his legal clients, Rollin King, owner of a small commuter airline, and his banker, John Parker, came to his office. Both men found travelling between Houston, Dallas and San Antonio inconvenient and expensive, and thought they could do it better.

American aviation in the 1970s was dominated by the hub-and-spoke approach, pioneered by Delta Air Lines in the belief that the most efficient way to fill planes was to fly through hub cities and hoover up passengers. What King and Parker were proposing was cheap, point-to-point travel using small, convenient airports near to fast-growing centres. The competition was not other airlines, they believed, but cars. After all, the distance between Houston and San Antonio was less than 200 miles, a three-hour journey by road. Pacific Southwest Airlines had made city-hopping efficient in California, so why would it not work in Texas? He put up $10,000 of his own money and on November 27th 1967 he filed Southwest’s application to fly between the three cities.

What he hadn’t reckoned on was the airborne competition. Within a day, Braniff, Trans Texas (later Texas International) and Continental applied for a restraining order stopping Southwest from taking to the skies, arguing that Texas was perfectly well served by existing airlines. For the next four years, through the state district court in Austin, the state court of civil appeals, the Texas Supreme Court and the US Supreme Court, the big airlines pleaded for injunctions that would kill off the new business. As the airline’s lawyer, and later its general counsel, he laid out its arguments and rebuttals. When, the night before one final hearing, an anxious chief executive suggested that a sheriff might show up at the last minute and stop Southwest’s first plane from taking off, Mr Kelleher gave him strict instructions: “You roll right over the son of a bitch and leave our tyre tracks on his uniform if you have to.”

The legal battles forged the Southwest culture. Mr Kelleher, who became chairman in 1978 and then also CEO in 1981, was deeply affected by the tactics his rivals had used to try to strangle Southwest at birth. It offended the sense instilled in him by his mother that you should treat all people equally, and with respect. And it challenged his beliefs about what America stood for. As he would later tell Kevin and Jackie Freiberg, two academics who studied Southwest and went on to write the bestselling “Nuts! Southwest Airlines’ Crazy Recipe for Business and Personal Success”: “It was an affront to my idealism. If you’re going to let these guys get away with this, it’s a radically different type of country from the one I wanted to believe in.”

Southwest became his cause. When one airline ran an ad claiming that Southwest was a cheap carrier, he had himself filmed with a bag over his head, saying the airline was prepared to offer the same to any mortified passenger. When another started a price war and halved its Dallas-Houston fare to $13, Southwest countered: pay full price and get a bottle of vodka or whisky in return. When a rival airline complained that Southwest pinched its slogan and began advertising itself as “Just Plane Smart”, he suggested the two chairmen settle the matter over three rounds of arm-wrestling instead of using lawyers.

Kool cigarette and a glass of Wild Turkey bourbon at hand, he was always ready to tell stories about his airline. How it hired for attitude; skills, you could always teach. How all its flight attendants wore hotpants. How when it won its first triple crown for best on-time performance, fewest customer complaints and smallest number of mishandled bags, all its customer-service employees were allowed to give up their uniforms and dress casually for a year. He put his workers first, ahead of his customers. Fortune dubbed him the “high priest of ha ha”.

That every-day’s-a-holiday atmosphere would be called branding today, and was an important part of the Southwest story. But it hid some hard-headed business decisions. In the 1970s Southwest bought three brand-new 737-200s that Boeing had been unable to sell in the slump. The airline paid $4m rather than the usual $5m for the planes, and Boeing provided 90% of the finance. Southwest used no other aircraft, a boon for servicing and spare parts. It served no meals; just peanuts. And, to ensure the fastest turnaround, it offered no seat assignments. Planes don’t make money when they are on the ground. And making money in good times to ride out the lean years was what it was all about; Southwest has made an annual profit for 45 years on the trot.

Without Mr Kelleher, there would have been no Michael O’Leary and Ryanair or Stelios Haji-Ioannou rolling up his sleeves at EasyJet. And yet somewhere along the line something was lost. Cut-price air travel today is endured rather than enjoyed. It has become a hideous blend of zero-hours contracts and excuses to extort charges for everything from handbaggage that is deemed too big to failing to check in online. It is hard to imagine today’s airline workers taking out a full-page newspaper advertisement praising their chairman. On Bosses’ Day in 1994, Southwest’s employees did just that, pitching in an hour’s salary each to raise $60,000. “Thanks Herb. For remembering every one of our names…For listening…For being a friend, not just a boss.”

Herb's Celebration of Life-January 22

Herb’s Celebration of Life will be held on Tuesday, January 22 at 10:00 a.m. at the Arena in the Kay Bailey Hutchison Convention Center Dallas, located at 650 S. Griffin St. in downtown Dallas. We look forward to celebrating Herb’s extraordinary life as a Southwest Airlines Family.

RSVP

We know there will be thousands of Employees, Retirees, Family, Friends, and Community Partners who would LUV to honor Herb. If you’re planning to attend, please RSVP so that we can be well-prepared for this celebratory event. You can RSVP by clicking this link: https://www.eiseverywhere.com/ehome/index.php?eventid=393119&

Details for the event, including transportation options, are available on the RSVP page. Registering for the event will allow us to communicate any additional event details directly with those who are planning to attend to ensure attendees have the most up to date information.

Attire

Attire for the Celebration of Life is anything that would honor Herb. Employees are welcome (but certainly not required) to wear their Southwest Airlines uniform, clothing with the Southwest Airlines logo, Southwest colors, or whatever makes you feel most connected to Herb.

Work Coverage and Travel

Employees interested in attending should ensure that their shifts, trips, or work responsibilities are covered. Attending Herb’s Celebration of Life is completely voluntary, and the best thing we can do to honor him that day is to continue to run an incredible airline. Employees wishing to attend will be responsible for their own travel and expenses to/from the event. Employees are welcome to use nonrevenue privileges or book a ticket using their Rapid Rewards points, but travel is not to be booked as Company business.

Celebrating from Wherever You Are

The Celebration of Life will be streamed live for those who are unable to attend in person, and locations are invited to watch together as schedules permit. Streaming details will be shared closer to the event. A video will also be made available after the fact for those who are unable to watch live. Stay tuned for details!

Uniform Tribute Extension

Flight Attendants are encouraged to wear a previous Company-issued uniform shirt or sweater and vintage uniform accessories including wings, scarves, and ties now through Friday, January 25. A remembrance ribbon made up of our Southwest colors (red/yellow/blue ribbons) may also be worn with the uniform. Please see SWALife or your Base Leaders for details.

Editorial From The Dallas Morning News-Herb Kelleher

Herb Kelleher

Southwest founder inspired joy and admiration

EDITORIALS

Herb Kelleher knew no regular hours.

He worked around the clock, and he wanted to touch every part of the airline he helped found.

He could be seen loading suitcases, stocking peanuts, cutting up with flight attendants or starring in commercials as the absentminded CEO of Southwest Airlines.

So focused was he on his business that he became notorious for forgetting everyday things, such as leaving behind credit cards or forgetting where he parked his car. At one point, he claimed for weeks his company car had been stolen—until he found it in a car dealer's parking lot. He had forgotten it after picking up his new German car,aBitter.

“I had left it at Brown Motor Works,” he told The Dallas Morning News in 1985. “I drove in last night because I wanted to see what new exotic cars theygot in —just peer through the window. And Isaw my own car.

Oh God! There it is!”

“I lose contact with the physical world,” he said.

Kelleher’s quirky genius and razorsharp business instincts took Southwest from a wisp of an idea to a preeminent aviation powerhouse that fundamentally changed the airline industry.

Kelleher died on Thursday at the age of 87.

He was comfortable being addressed by everyone at the company as Herb, and he didn’t hide his penchant for chain-smoking, drinking Wild Turkey and dressing as Elvis.

Kelleher possessed a humanizing frankness and spontaneity that most business executives would dismiss as a needless vulnerability.

But he brought personality with a purpose to the job and religiously won the loyalty of employees and customers in a way few executives ever have. Who else except Kelleher would have had the temerity to begin testimony before a national aviation review commission by saying: “I co-founded Southwest Airlines in 1967. Because I am unable to perform a competently any meaning ful function at Southwest, our 25,000 employees letme beCEO.

That is one among many reason why Ilove the people of Southwest Airlines.”

While manylow-cost airline imitators followed, the New Jersey-born Kelleher, who famously coined the phrase “the business of business is people,” created a magical corporate cultureinanaviation industry known for cold, cutthroat competition. He was a street fighter when necessary, but he did it with a style that even his rivals couldn’t begrudge.

That style drew admiration from business school professors, national magazines and local leaders such as Dallas oilman Ray Hunt, who noted in a 2010 speech, “I know of no other company that’s had that kind of growth and maintained its corporate culture.”

That point on corporate culture is more profound than many people realize, and more significant than some will want to admit. Kelleher was not successful despite his quirks; in many ways, his success grew from the very facets of his personality that some would have cautioned him to shed. The can-do and customer-centric culture of Southwest Airlines grew directly from Kelleher’s personality.

One key challenge in running any business is ensuring employees all the way down the line see beyond bureaucratic rules and make decisions that aid the company’s success. At Southwest, there was no doubt from the baggage handler to the agent at the boarding gate and on to the pilots of what Kelleher would want done in a specific situation: serve the customer regardless of what the rules were.

That style enabled him to build a dynamic airline that beat the odds by developing a form of fanaticism in the company that demonstrated what was possible in shortening turnaround times on the ground (a key to airline profitability), winning customer loyalty and earning profits.

In the mid-1960s, lawyer Kelleher teamed up with businessman Rollin W.

King with the then-wacky idea of starting a low-cost, short-trip airline, an idea that rivals Braniff, Texas International and Continental Airlines managed to keep grounded for several years with legal challenges.

(Southwest has outlived all three of those airlines.) The duo didn’t cower, and when the dust-up ended, the partners’ airline was limited to flying between Texas cities and neighboring states. Kelleher masterfully played what seemed a disadvantage in the airline’s unique business model: low fares, fast service, entertaining flight attendants and peanuts.

When fledgling Southwest ran into financial trouble in 1973, Kelleher had the choice of firing employees or selling one of the planes. The plane went and the hallmark of Southwest’s culture emerged from that crisis: Treat people with respect and have fun at work. Take care of your employees first, he relentlessly preached, and they will take care of your customers.

In a video of an employee-anniversary event last year that was posted to Facebook, Kelleher said in his remarks, “During that entire half century, being with you and working for you, the people of Southwest Airlines, has always been my focal point, a gleaming and indeed rapturous highlight of my life. Being with you warms my heart. Being with you tickles my funny bone. Being with you lights up my life.”

Everyone who met the man has a favorite Kelleher story, undoubtedly very colorful and not necessarily suited for a family newspaper. But that was Herb, the pilot of two Texas-sized legacies: an airline ranking among the best U.S. companies and himself, one of the world’s most admired bosses. Not bad for an Elvis impersonator.

Herb's Official Obituary from Dallas Morning News

Herb Kelleher

March 12, 1931 ~ January 3, 2019

Herb Kelleher, the fun-loving and wickedly witty Founder, Chairman Emeritus, and former CEO of Dallas-based Southwest Airlines Co., died Thursday, January 3, 2019. He was 87.

Herbert David Kelleher was born March 12, 1931, in Camden, New Jersey, and was reared in nearby Audubon, New Jersey, where he graduated from Haddon Heights High School. He earned a bachelor's degree from Wesleyan University where he was an Olin Scholar, majoring in English, with a minor in philosophy. While at Wesleyan, Herb served as the president of the student body and excelled in numerous sports, and it was there that he met and fell in love with Joan Negley, who was attending Connecticut College at the time. Following graduation, Herb and Joan married and lived in New York while Herb attended law school at New York University, where he was a Root-Tilden Scholar. Herb was a self-made man, putting himself through school with scholarships and his unparalleled work ethic. He took that work ethic with him when he moved to Joan’s home state of Texas, a place that he grew to love and cherish.

Hundreds of millions of Americans likely owe their first flight to the era of affordable air travel that Herb and Rollin King helped launch in the late 1960s on a cocktail napkin in a San Antonio hotel bar. He oversaw and personally fought numerous legal battles instigated by competitors who tried to ground the very idea of Southwest Airlines before its first flights took off in 1971 with a fleet of just three airplanes. Through decades of challenges and growth, Herb’s infectious personality motivated the airline’s Employees to build Brand loyalty in Customers that bolstered one of the world’s most admired companies with decades of consistent profitability. And the original Texas triangle of destinations on that cocktail napkin remains at the heart of nearly 90 US destinations served by what is the now largest airline in the United States. The successful and magic mix of making flying both fun and reliable can be traced directly back to Herb’s larger than life personality that shaped and galvanized a workforce around the gold standard of Customer Service in air travel by institutionalizing The Golden Rule.

Herb served as Southwest Airlines Executive Chairman from March 1978 to May 2008 and as President and CEO from September 1981 through June 2001. Fortune magazine, which consistently recognizes Southwest among the world’s top 10 most admired companies, called Herb perhaps the Best CEO in America.

Herb received numerous awards and honors, including the U. S. Chamber Business Leadership Hall of Fame; CEO of the Year and one of history’s top three CEOs, Chief Executive magazine; CEO of the Century, Texas Monthly magazine; National Sales and Marketing Hall of Fame; CEO of the Decade-Airline Industry; Wright Brothers Memorial Trophy; Bower Award for Business Leadership, Franklin Institute; Tony Jannus Award; Wings Club Distinguished Achievement Award; San Diego Aerospace Hall of Fame; L. Welch Pogue Award for Lifetime Achievement in Aviation, Aviation Week; Airline Business Award, Airline Business magazine; 2005 Global Services Leader Award; History Making Texan Award; the Business Halls of Fame of the State of Texas, the University of Texas, Texas A&M, and the City of Dallas; the Herbert D. Kelleher Servant Leader Scholarship, named in Herb’s honor by the Austin Business Travel Association; induction into the Texas Labor Management Hall of Fame; induction into the National Aviation Hall of Fame; induction into the Paul E. Garber First Flight Shrine, Wright Brothers National Memorial; recipient of the Department of Homeland Security Distinguished Public Service Medal; an honorary lifetime member of the Transport Workers Union; recipient of full page USA Today “Thank You Herb!” ad from Southwest’s Pilots union; induction into the AAF Tenth District Southwest Advertising Hall of Fame; Ronald McDonald House Charities Award of Excellence; induction into the Advertising Hall of Fame, and, most recently, induction into the American Advertising Federation Hall of Fame and the Entrepreneurs For North Texas’ Ring of Entrepreneurs.

In July 2010, Herb was appointed Chair of the Federal Reserve Bank of Dallas board of directors. He continued to serve on numerous advisory and governance boards late in life, including the National Air and Space Museum, and Homeland Security and Advisory Council.

Herb, as he was called by the 63,000-plus current Employees of Southwest Airlines, the Company’s Retirees, and even Customers and admirers of the business and cultural legacy he created and nurtured for decades, often said in recent years he was ‘flunking retirement’ as he continued to maintain an office at the Company’s Love Field Headquarters.

Herb’s vocabulary often challenged those around him to find a dictionary to decipher the layers of meaning that he beautifully conveyed in a quip or quote across a gamut of topics on which he regularly and voraciously read. He used a steel trap mind to catalogue thousands of names and faces, and he would never pass a chance to say hello, share a story or a joke, plant a kiss on the lips or give a warm hug. His laughter and legacy linger in the hallowed halls of the Company he built; his vision takes hold in the Leaders he shaped; his compassion and character resonate in the workforce he motivated.

Herb relished his private time with his family, who loved and adored him. He is survived by his wife of 64 years, Joan Negley Kelleher, along with three of their four children, Michael Kelleher, Ruth Agather, and David Kelleher, and their spouses, Lisa Kelleher, John Agather, Kathy Kelleher, and son-in-law Dennis Stacy. He’s also survived by his nine grandchildren (who lovingly called him Poppair), Kevin Stacy, Clara Kelleher, Caroline Kelleher, Michael Kelleher, Jack Agather, Merrilee Agather, Danny Kelleher, Maggie Kelleher and Mollie Kelleher, and numerous nieces and nephews. Herb was preceded in death by his daughter, Julie Stacy; his parents, Ruth and Harry Kelleher; his brothers, Harry and Richard Kelleher, and his sister, Ruth Adams.

The family wishes to thank Colleen Barrett, Melinda Russ and Vickie Shuler for the love and care they gave to Herb.

*A private burial will be held on Wednesday, January 9, 2019, followed by a service of remembrance for friends and family at Christ Episcopal Church, 510 Belknap Place, San Antonio, Texas, at 3:00 p.m. that same day.

*A public Celebration of Life will be conducted at a later date in Dallas, Texas.

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