Founders
Episode 56 #56 The Biography of Herb Kelleher
Founders

Episode 56: #56 The Biography of Herb Kelleher

Founders

Episode 56

#56 The Biography of Herb Kelleher

David Senra is the host of Founders, where he studies history's greatest entrepreneurs. This is what he learned from reading Nuts!: Southwest Airlines' Crazy Recipe for Business and Personal Success

What I learned from reading Nuts!: Southwest Airlines' Crazy Recipe for Business and Personal Success

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Reality is chaotic; planning is ordered [0:01]

Vince Lombardi is the Steve Jobs of coaches [3:48] 

how Southwest Airlines is different [11:31]

the beginning of Southwest [16:00]

fighting anticompetitive practice [24:30] 

finding a new market by doing the opposite of your competition [29:00] 

missionaries make the best products [31:00]

being forced to innovate leads to questioning assumptions which leads to finding new markets [34:00]

how Southwest became the largest liquor distributor in Texas [38:00] 

remember your fundamental reason for being and don't deviate from that [40:45]

optimize for profits, not market share [42:30]

know what you are competing with - not who [44:15] 

how having only one type of airplane gives Southwest an advantage [46:30] 

how keeping it simple saved Southwest $2 million [51:30]

know what you do best - have the discipline to stick to it [53:00] 

if you are going to be small you have to be fast [1:01:19]

the benefits of curiosity are unpredictable [1:03:45]

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#56 The Biography of Herb Kelleher

Introduction

“One plan, no matter how well laid, couldn't possibly respond to all of these situations. This is why Kelleher does not put much stock in traditional strategic planning. His concern is that writing something down in a plan makes it gospel. When the plan becomes gospel, it's easy for people to become rigid in their thinking and less open to new, perhaps off-the-wall ideas. Kelleher explains it this way. Reality is chaotic. Planning is ordered and logical. The two don't square well with one another. When USAir pulls out of six cities in California, they don't call me and tell me they're going to do that.

Now if we have established a big strategic plan that is approved by our officers and the Board of Directors, I would have to go to the officers and the Board and tell them that we want to deviate from this plan. They would want to know why I want to buy six more airplanes. The problem is we'd analyze it and debate its merits for three months instead of getting the airplanes, taking over the gates, and dominating California. The meticulous nitpicking that goes on in most strategic planning processes creates a mental straitjacket that becomes disabling in an industry where things change radically from one day to the next. When a financial analyst chided Kelleher about not having a strategic plan, he said, ‘we do have a plan.’ When she asked what it was, his response was vintage Kelleher, ‘It's called doing things.’”

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