#322 Herb Kelleher (Southwest Airlines)

What I learned from reading Nuts!: Southwest Airlines' Crazy Recipe for Business and Personal Success by Kevin and Jackie Freiberg and  Herb’s Heroes by David Sanders. 

----

Join my free email newsletter to get my top 10 highlights from every book

----

I'm doing a live show with Patrick O’Shaughnessy from Invest Like the Best on October 19th in New York City. Get your tickets here!

----

Listen to Invest Like The Best #343 David Senra: In The Service of Founders 

----

Vesto makes it easy for you to invest your businesses idle cash. Schedule a demo with Vesto's founder Ben and tell him David from Founders sent you. 

Here's the legal disclosures to make the lawyers happy:

Vesto Advisors, LLC (“Vesto”) is an SEC registered investment adviser. Registration with the SEC does not imply a certain level of skill or training. More information about Vesto and our partnership can be found here

We are entitled to compensation for promoting Vesto Advisors, LLC. Accordingly, we have an incentive to endorse Vesto and its team and services. We are not current advisory clients of the Vesto.

----

Listen to Invest Like The Best #343 David Senra: In The Service of Founders 

----

Join Founders AMA

Members of Founders AMA can:

-Email me your questions directly (you get a private email address in the confirmation email) 

-Promote your company to other members by including a link to your website with you question 

-Unlock 40 Ask Me Anything (AMA) episodes immediately

-Listen to new Ask Me Anything (AMA) episodes every week 

----

(2:30) Reality is chaotic; planning is ordered and logical. The two don’t square with one another.

(5:30) You undergo a lot of stress all the time. How do you handle it? I don’t handle it. I like it.

(7:30) He smoked 5 packs of cigarettes a day. He drank Wild Turkey Bourbon daily. He said “Wild Turkey and Phillip Morris cigarettes are essential to the maintenance of human life.”

(8:00) He built the most successful airline in history. Southwest was profitable for 47 straight years.

(9:30) All that matters is to survive. The rest is just words. — Charles de Gaulle

(18:00) Kelleher didn’t mince any words: “I told Lamar, you roll right over the son of a bitch and leave our tire tracks on his uniform if you have to.”

(27:30) No carrier knows its niche as well as Southwest.

(28:30) While other carriers have been lured by the temptation to step outside their niche, Southwest has maintained the discipline to stay focused on its fundamental reason for being.

(29:00) Herb on why he was conservative with debt: When there are bad times you aren't threatened by debt payments and debt payments are what put other airlines in and out of bankruptcy forever.

(30:00) Southwest is obsessed with keeping costs low to maximize profitability instead of being concerned with increasing market share.

(30:15) Southwest is willing to forgo revenue generating opportunities in markets that would disproportionately increase its costs.

(35:00) Keller has said on many occasions that a company is never more vulnerable to complacency than when it's at the height of its success. The number one threat is us he would say.

(38:30) When we look back at the last 20 years it is obvious that a number of large companies were so set in their ways that they did not adapt properly and lost out as a result. 20 years from now, we'll look back and we'll see the same pattern. — Bill Gates

(39:00) Herb Kelleher illustrates the speed with which Southwest moves by telling a story about Don Valentine, former VP of marketing.

Valentine had just joined from Dr. Pepper when the marketing group met in January to discuss a new television campaign.

Valentine was ready with his timeline for producing the spots:

-script in March

-script approval in April

-casting in June

-shoot in September

When Valentine finished, Kelleher said, “Don, I hate to tell you, but we’re talking about next Wednesday.”

----

“I have listened to every episode released and look forward to every episode that comes out. The only criticism I would have is that after each podcast I usually want to buy the book because I am interested, so my poor wallet suffers.” — Gareth

Be like Gareth. Buy a book: All the books featured on Founders Podcast