"The key to Southwest's business success," he says, "has been defining the company's market niche and adhering to it."
We tackle this issue off and on again at managersrealm, because it's one of the more vital issues any business will deal with.
More business leaders and companies get in trouble from getting off course in this area, that all the examples couldn't ever be told, there are so many.
With the concerns over macroeconomic issues coming to the forefront of regular and business news again, it'll be instructive to be reminded of this fact over the next couple years.
Here's the point of it all, as expressed simply by Kelleher, you don't leave the market niche you serve, regardless of outside forces beyond your control.
There are two times business leaders are tempted to do this: when things in an area of opportunity tempt them, and in the current business climate where people start to panic and make decisions out of fear. Neither has a place if we want to build a long lasting, successful company.
As a matter of fact, the subprime loan and resultant housing problems emerged from circumstances that said "this is different than before." That's what's always said when temporary opportunities that look limitless present themselves. Have we already forgotten the dotcom bomb? Everybody said things had changed then as well.
To show you how it can grab hold of otherwise smart people, look at the financial and banking industries today. They more than anybody should have known better, and yet that isn't even the first time in recent years they went on loan binges. They did it in connection with the oil industry a number of years ago, which caused the enormous problems in the Savings & Loan industry.
More than ever before, we need to stick to our market niche in these types of times. To go off that path will result in getting lost in the market woods. We suddenly will look up and not no how to get home.
I'm not saying there aren't adjustments and things to adapt to during these times, as Kelleher says, we just need to keep doing it in the market niche we serve. Go outside that and we may never find our way home.
Other Herb Kelleher Sources:
Herb Kelleher on the Record, Part 1
Belief Model for The Leadership of Herb Kelleher (Southwest Airlines)
Herb Kelleher, Chairman, CEO and President, Southwest Airlines
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