Laughing All The Way To The Bank

In 1971, Sandra Force was an optimistic 20-something, a former Miss Tennessee USA living in Dallas with her own apartment and a steady, sensible job. She was four years into her elementary school teaching career and busy with summer school students when she heard about an enticing opportunity. The glamor of being an airline stewardess beckoned her. The trouble was, the company was relatively unknown outside of Texas.

The same day she made a call to Southwest Airlines, she landed an interview and was hired. The company, known at the time in part for its flight attendants’ attire – flashy orange hot pants and vinyl go-go boots – had no reservations about the bright young woman. Force wasn’t as certain. She took the job, but with reservations. “We were all taking a risk in going to work for Southwest,” she says. “No one had ever heard of Southwest. They were a short dog in tall grass. My mother even said, ‘Sandra, why would you quit your teaching job? And if you were going to, why not go with a successful, well-known airline like Braniff or American?’”

Forty-seven years later, Force, comfortable in her sprawling Dallas home with an entire room dedicated to Southwest, says that’s the only advice her mother gave that wasn’t quite right. Her shares of Southwest stock have made her a millionaire, but she’s delighted to stay on full-time, with no plans to stop. She’s still thankful for the decision she made in her 20s to switch careers and for the leaders who made the company what it is. “I still give the Lord credit,” she says. “I think it was meant to be. And  [Kelleher] and Colleen [Barrett] have just been wonderful. Herb, in all his speeches always gave employees credit for the success of our company. Employees always gave Herb and Colleen the credit. I think both parties feel that way; it’s a very successful marriage.”

For Force, that’s what it became. The 72-year-old single woman says the company became her partner – and she’s grateful for that. It gives her the opportunity to live in a big house with plenty of flowers. It gives her the chance to interact with a cross-section of people and learn how to read them. It put her on the winning side of what was once a David-and-Goliath battle, and it’s still paying off.

But Sandra’s journey with Southwest wasn’t always easy or secure. There was a time when the success she and the company enjoy was aspiration, not reality. In the early 1970s, the airline had spent four years and all of its initial investment funds to break into an industry dominated by giants. Incorporated in 1967, it finally was permitted to launch commercial service in 1971 with three aircraft flying among three Texas cities. Budgets were tight and competitors were doing all they could to keep the startup on the ground.

“I remember once in the ‘70s, we landed in San Antonio and the base manager came on with bad news,” Force says. “It didn’t look like they were going to make payroll. The girls and I started crying.” She didn’t leave then. Instead, she prayed. And she looked to Kelleher and his onetime executive assistant, Colleen Barrett, who eventually rose to become the airline’s president. “I just think it was Herb and Colleen. They have a way of motivating us,” she says. “They are the heartbeat of the company and had that spirit going for them. I thought, let’s hang in for a while longer.” So she kept working for $2.50 a flight as the airline fought to stay afloat.

Eventually, when she and other attendants asked for a raise, what they received instead was stock in Southwest, the first in the industry to offer a profit-sharing program. Suddenly, she and others had more skin in the game, and they were emboldened to win. Kelleher was still the company’s attorney at the time, but his influence affected the way they all approached work, and the way the company operated.

Kelleher – the former lawyer who co-founded the company and spent a year working pro bono to fight legal setbacks – was renowned for his play hard/work hard mentality from the start. The champion and eventual CEO of the airlines always seemed to have a cigarette in hand – he said he smoked 100 a day – relished his Wild Turkey whiskey, and could bust into an Elvis impression on the spot. He was always ready with a joke and he pulled pranks like sending gobs of chocolate pudding to a competitor who asked what Southwest might do with manure from its Shamu-painted plane. But Kelleher’s fun-loving demeanor – he once showed up to a meeting with suited suppliers while wearing his bright orange jam pants – cloaked a serious mission. Here was a person who loved to make people smile, but he also was passionate about taking care of those people. Like Artie T., he made it his mission to create a business that made its employees lives more secure. But he’d need them to stick with him through tough battles first.

Kelleher was working around-the-clock across the country to break into the highly competitive, regulation-tethered airline industry. The initial idea was to launch just within Texas, but even at that, three monopolistic carriers stood in his way: The shuttered Braniff Airlines controlled flights between the state’s big cities; Texas International held a grip on flights to smaller cities; and the rest went to Continental Airlines. This was 1967, two decades before the airline industry was deregulated, so Kelleher knew he’d face outcry and legal manipulation from the bigger carriers, even if he found a loophole in federal regulations, which he did.

Kelleher kept pushing – all the way to the U.S. Supreme Court. He never gave in, even when he had to work a year for free in the midst of the expensive legal struggles, and even when the startup airline wasn’t able to fly a single plane in its first four years. The struggle to stay afloat with established and fierce competitors would follow, and he would come out on top again. Kelleher’s will to win made an underdog into a champion, one that broke into a locked-tight industry.

But he didn’t do it alone. He needed others to take the risks with him. How did he convince them to take the leap in those first five years in business, when the odds seemed almost impossible? He showed them he had the drive, the work ethic, and the knowledge to lead them to victory. And he did it all in plain sight. Kelleher was the leader who wasn’t too proud to work alongside his employees. He would load bags, deliver peanuts, or take on any task other than flying a plane. When the company grew too big for that, he trained his managers to find new ways to work alongside employees and provided incentive programs that encouraged them to seek new efficiencies. He modeled hard work himself, pulling 84-hour workweeks on average and he would stop to take care of the smallest details. Once, when his gate agents said it was uncomfortable spending all day on a tile floor, he made a trip to Wal-Mart himself to buy them rubber padding.

Attorney Deborah Ackerman, who happily followed Kelleher from his law firm to Southwest and eventually became the airlines’ general counsel, said that profit-sharing program was an industry first. It reflected the Kelleher she knew, the person who’d leave her a handwritten note or stop by her office to give her a hug when she reached some accomplishment or finished a trying transaction at the law firm. He was someone who wanted people to know their efforts were appreciated, and valuable. When Kelleher invited her to join him, she knew he would continue to push the airline to new heights. She was right; the year after she was hired in 1988, the company officially became a DOT major carrier by exceeding the billion-dollar revenue mark.

Because she started as a lawyer in Kelleher’s firm, she saw what inspired confidence in those early employees. Kelleher’s savvy with others extended to the regulators and politicians he’d have to influence to achieve the airline’s ultimate aim. Ackerman said she remembers Kelleher working the floor during Congressional committee hearings, moving from one chair to the next, pleading the case for Southwest. He eventually became the expert voice on the industry in general. When President Bill Clinton appointed Herb to his commission to study the then failing health of the airline industry, Herb was the only industry representative.

“Herb turned that same personality, charm, and brilliance on to the many other constituencies: government, vendors, lawyers, unions,” Ackerman says. Among the company’s points of pride is its relationship with union partners. Southwest so far has never lost a day to work stoppage, despite being as heavily unionized as others.

All of that effort, though, was focused on one result. Ackerman recalls a telling piece of advice Kelleher gave her late one night – and there were plenty of those. Kelleher was so notorious for working into the night that Ackerman said she and others would draw straws to see who would stay up to help and listen during work travel; no one could rival his energy. “I can remember him telling me, ‘Debby, remember every single decision you make is for the greater good of Southwest Airlines. That was his passion for people,” she said. “That’s the way he lived his whole life, twenty-four/seven.”

Hard work and a listening ear weren’t everything Herb or Bill McGowan brought to the table. Both were well-educated - in law school at New York University, Herb graduated at the top of his class - and yet still sought every, single piece of knowledge they could. Like Bill, Herb was a voracious reader, known to drop $300 easy in a single book store trip. They both sought employee feedback at every opportunity. And they both demonstrated they knew how to make connections with the right decision-makers. They could sell their company’s cause as a just one - and as the eventual victor - to anyone. They both showed that they outright refused to give up and that they would bring every possible personal talent and resource they had to reach the goal they shared with their team.

Because Herb was able to build a loyal team, Southwest was able to forge a path into a locked-tight, monopolistic industry and create new standards for efficiency and pricing, for labor relations, and for employee retention and benefits. It avoided the labor disputes that have crippled other airlines, maintained the playful but hard-working mentality Herb sparked, and it rewarded its people in incredible and ongoing ways: In 2015, for example, the company doled out a record $620 million in profit-sharing for those loyal employees. Over its four decades, its profit-sharing contributions topped $3.4 billion. Herb was right. They could win, and they did.

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Herb Kelleher built a loyal team, people who trusted him to help them achieve what would have seemed impossible. How? Employees felt safe banking their careers on industry underdogs, and regulators were willing to risk their reputation and even buck against the influence of heavy-handed, well-funded companies. Why? Herb made people believe that they had what it took - the resources, the connections, the talent, and the smarts - to make them all winners.