Devoted to Managers and those that seek to improve their management skills

He Flew in the Face of Convention

The story of Southwest Airlines (LUV), like all other great companies, was built upon simplicity and focused purpose that while understood, was almost impossible to be copied.

That's a question that all business leaders need to ask themselves: "Why is something that is easy to understand so difficult to copy?"

In looking at Kelleher and Southwest, there are some similarities between them and Sam Walton and Wal-Mart (WMT). The major similarity is that they wanted to offer a low-cost, but quality alternative to what existed. That decision and purpose is what determined the journey and other adjustments they had to make.

The strategy of the company was to only fly the Boeing 737, not copy the hub-and-spoke passenger system and to create their own computer reservation system to save millions. The last decision especially was made so they could remain true to their low-cost strategy. If they used other companies' systems, they wouldn't have control of their destiny or pricing. So Kelleher decided they would create their own. Something similar to what Walton did with Wal-Mart and the distribution system they created.

What happened was that everything became so integrated together, that those that may have wanted to copy it found it impossible to do so. Although even if they would have been able to copy that part of it, they never would have been able to reproduce the Southwest culture, which in the end was the primary competitive advantage of the company.

Still, the decision to be a low-cost airline, started the process rolling which went the opposite direction of the existing airlines at the time. When the job is done right and it's put together the way Southwest put it together and integrated it, even when the competition understands what you've done, not only is it too late to catch up, but it can't be reproduced by them. It's part of the unique DNA of the company. What a competitive advantage!

Other Herb Kelleher Sources:

A Culture of Commitment

HERB KELLEHER

The wild turkey

Herb Kelleher on the Record, Part 1

Herb Kelleher Talks about How Southwest Airlines Grew from Entrepreneurial Startup to Industry Leadership

Belief Model for The Leadership of Herb Kelleher (Southwest Airlines)

Herb Kelleher, Chairman, CEO and President, Southwest Airlines

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