Southwest: Herb Kelleher and Employees First

In the 1990s, most airlines were squeezing labor costs to compete on price. Southwest was paying its people well and letting flight attendants crack jokes over the intercom. The conventional logic said Southwest was confused; the results said otherwise. Co-founder Herb Kelleher showed up at maintenance hangars at 2 a.m., knew employees by name, and held the line on layoffs during the Gulf War recession when nearly every rival was cutting staff. He ran a philosophy most observers dismissed as naive, and Southwest became one of the most consistently profitable airlines in U.S. history.

For founders and operators, this case sharpens how you think about the chain that runs from how a team feels when it clocks in to what customers feel when they walk in. It challenges the idea that culture is a values doc rather than a profit mechanism. What Kelleher actually believed that link did, and why it paid off operationally, is the part to open the app for.