A former lawyer who famously created the business model for Southwest on the back of a (cocktail) napkin, Kelleher is one of those rare birds: an entrepreneur who managed to create a successful startup, then stuck around to build it into a huge corporation and a perennial on this magazine’s Most Admired Companies list. Fortune’s Jennifer Reingold sat down with him in his office at Southwest’s Dallas headquarters to get his take on airline consolidation, the book he’s writing, treating employees right, and basically anything else he felt like discussing.
Q: You’ve always talked about how important committed employees are to the success of a company. How did you make that work at Southwest?
A: Well, the people did it. I just stayed out of their way.
And what happens in bad times? You have still never had a furlough or layoff at Southwest, correct?
Yeah. Oh, yeah. We’ve never had a furlough. We could have made more money if we’d furloughed people during numerous events over the last 40 years, but we never have. We didn’t think it was the right thing to do. And you know, one of the disciplines is not furloughing. I didn’t realize this at first, by the way, so it came as somewhat of an insight to me. You know, suddenly a little synapse clicked, and I said, “You know, not furloughing is really a great discipline with respect to hiring.”
All Qf needed was real mgt.