Richard Branson/Herb Kelleher - Leader Extraordinaire

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Case Details:

Case Code : LDEN021
Case Length : 08 Pages
Period : 1973-2002
Pub Date : 2002
Teaching Note : Available
Organization : Virgin Group, Southwest Airlines
Industry : Aviation
Countries : USA

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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Herbert D Kelleher - The Fun Guy

Herb studied law and graduated from the New York University in 1956. He worked as a clerk for a New Jersey Supreme Court justice for many years and later joined a Newark law firm. Attracted by the opportunities in Texas, Herb shifted his base to Texas. In 1966 Rollin W King (Rollin), a Texas businessman, approached Herb with a new idea: starting an airline that would offer the lowest fares ever.

The idea was to make people fly at the quickest possible time and at the cheapest possible rates. Although many thought that they were pursuing an impossible dream and wondered how a no-frills airline would work, the two went ahead with their plans.

As it operated only within the state of Texas, it did not have to follow the ticket prices stipulated by the Civil Aeronautics Board, which meant that it was not constrained by Federal price regulations. Sensing the potential of Southwest, airlines like Continental Airlines, Barniff and Texas International tried to prevent Southwest's launch through litigation. They argued that the state could not afford another airline. Herb, being an attorney and now a partner as well, fought the case for Southwest and won. Soon after, Southwest received permission to operate and it launched its first flight in 1971. The company had only four planes and less than 70 employees. The concept of a no-frills, short-distance flight service took time to find acceptance and revenues did not match the company's expectations...

Leaders & Entrepreneurs

Both Branson and Herb established successful businesses and both proved that anything was possible and that it just took a little nerve to get started and keep the spirit going till the mission was achieved.

Both leaders displayed entrepreneurial traits and were lauded for their leadership styles. Several studies6 revealed that successful leaders/entrepreneurs are pragmatics who work hard to achieve their goals, display superior conceptual abilities, are emotionally stable, and are often well educated...


Exhibit I: A Look at the Eccentricities of Branson & Herb

6]  As stated in the book 'Entrepreneurship - New Venture Creation', authored by David H. Holt.


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