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"So maybe we didn’t want to be the leader in some areas, but maybe we wanted to be number two after someone else had worked the bugs out and developed a better and cheaper second generation version."

In the way that Kelleher talks about this issue, it's enlightening because there aren't that many people that see it from his perspective; at least in big business.

What's unique about it is the way he approached technology. While many in business always preach the gospel of technology, I'm not so sure they have a strategy in place that deals with unlimited changes that endlessly come down the pipe. Kelleher did.

He said for years that in reference to technology, he wasn't going to try to keep up with everyone else in connection to certain technology that was always emerging. That's when he made the opening comments up above, after making that point.

The idea is that he had a technology policy in place. And what that policy represented was Southwest Airlines wasn't going to follow every new technology that emerged. If it did, they would never get anything done.

Another good thing he recognized was the cost that is involved in being the market leader. He didn't mind in some cases being second in areas while letting his competitors work out the problems that are inherent in new technology.

This is counterintuitive, but if you understand technology, many times it's not the first company to get there that reaps the greatest benefits from developing and implementing it into their business.

Kelleher was saying that in connection to technology, being number one wasn't always what it was cracked up to be. He selectively chose what he knew needed to be part of the company, like their internally-created reservation system, which freed them in ways they never could have been if they had to use someone else's. So that was definitely worth developing from within the company.

We need a technology policy in place that can work with the constant changes emerging in whatever market we serve. The greatest value is in understanding we don't need to be first in every area, but need to know which areas we to be leaders in.

Those that do this the best will be the most profitable because of the costs of research and development associated with being the market leader.

Our policy needs to be based on picking and choosing the battles we want to fight correctly.

Other Herb Kelleher Sources:

Special Event

Leadership: The Essential Herb Kelleher

The CEO as Brand Guardian

Herb's way

Speeches and Presentations from Southwest Leaders

Southwest Airlines: The Hottest Thing in the Sky

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