I hate to contradict myself, but I was shocked, yet not surprised, to hear that 76-year-old co-founder and chairman Herb Kelleher has announced that he will step down as chairman of Southwest Airlines in May of 2008. As if that weren’t enough of a shock to one of the most unique cultures in the business world, president Colleen Barrett, 62, will also step down two months later!

I said “shocked, yet not surprised.” Let me explain as that is an obvious contradiction. I was shocked because these two dynamic personalities have been the backbone and foundation of this airline since its conception 41 years ago. It’s indeed difficult to even mention Southwest Airlines without visualizing either Herb and/or Colleen.

I wasn’t surprised because this move is obviously a very intelligent, calculated strategy of an organization transition that began in 2001 and will be completed next year. Imagine that … a seven-year leadership succession plan! When was the last time you heard of anything like that being carried out by any organization in any industry? This is just one example of why this alliance of the incomparable continues to topple every challenge they face.

As a speaker and trainer, I’ve been sharing the Southwest story for decades. It gets better every year! Over the years, I’ve encountered many non-believers and non-fans as you might expect of any successful organization. However, there is a multitude of very valuable lessons to be gained through observation of the daily operations of SWA.

Herb Kelleher? Where do I start? I personally believe this man is crazy! Like a fox. Serving as an attorney to San Antonio businessman Rollin King, Herb was instrumental in the creation and growth of Southwest from three airplanes in 1971 to 500 today. Herb and Rollin developed their business plan on a napkin over lunch in a restaurant. Southwest now serves 63 cities in 32 states through the efforts of 33,000 very loyal and creative employees. However, Herb isn’t as well known for creating this colossal empire as he is for some of the following facts:

• Dressing up as Elvis for magazine covers
• Jumping out of overhead bins
• Donning Leprechaun and Easter Bunny suits to serve refreshments with his flight attendants
• Arm wrestling on local TV for the rights to a slogan
• Riding a motorcycle given to him by his pilots
• A bout with prostate cancer
• A legendary fondness for Wild Turkey Whiskey and cigarettes
• An employee loyalty and respect enjoyed by very few leaders in any business

Herb Kelleher is a one-of-a-kind, risk-taking, charismatic leader who will be studied in MBA programs for years to come.

Leaving with Mr. Kelleher is his longtime associate, Colleen Barrett, who started out as his legal secretary and worked her way up to president of one of the nation’s largest airlines. Ms. Barrett , 62, became Southwest’s corporate secretary in 1978, its vice president of administration in 1986, its executive vice president for customers in 1990, and president in 2001. She is highly respected and well-recognized in leadership circles throughout the world for her many accomplishments.

Both Herb and Colleen will remain full-time employees at Southwest’s Dallas headquarters for five years after they leave their current positions. Their formal titles have yet to be determined. This, of course, is a crucial part of the succession plan and informally converts it to a 12-year plan. Again unheard of in today’s business world … yet it reeks of business wisdom leading to assured success.

Gary Kelly, current CEO and vice chairman since 2004, signed a new contract through February 1, 2011. His first position with Southwest was controller, which he accepted in 1986. The carrier did not name replacements for Mr. Kelleher and Ms. Barrett, although Mr. Kelly probably would take over one or both of those jobs after the pair’s departure from management.

Obviously, I could ramble on for hours scanning the many volumes of the Southwest story. I’m certain it will remain “The Never-ending Story.” However, I strongly recommend that you add the following two books to your personal and/or corporate libraries. You’ll not only enjoy them immensely and learn a great deal, but will find yourself referring to them constantly!

It’s interesting to hear some critics predict the demise of this airline and culture as Herb and Colleen move on to other challenges. I think not. They’ve developed a culture of personal and corporate pride, creativity, and desire to succeed that will propel this organization to even greater heights in the future. It’s going to be interesting to watch.

About Harry K. Jones

Harry K. Jones is a motivational speaker and consultant for AchieveMax®, Inc., a company of professional speakers who provide custom-designed seminars, keynote presentations, and consulting services. Harry's top requested topics include change management, customer service, creativity, employee retention, goal setting, leadership, stress management, teamwork, and time management. For more information on Harry's presentations, please call 800-886-2629 or fill out our contact form.

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From time to time, we like to offer you a “big picture” update on recent business tidbits. Nothing in depth, just a quick overview to keep you “in the know.” For instance:

WENDY’S
Apparently, Wendy’s International, Inc., the nation’s third-largest hamburger chain with approximately 6,600 locations, is seriously in search of a buyer. By the way, McDonald’s ranks #1 in the industry with 31,000 locations, followed by Burger King with approximately 11,100 locations. Wendy’s was founded in 1969 by the late Dave Thomas in Dublin, Ohio. Last year they spun off their Tim Horton locations as well as their Baja Fresh Mexican Grills. Billionaire investor Nelson Peltz, chairman and chief executive fast-food chain operator of Triarc Cos., which operates more than 3,000 Arby’s Restaurants, mentioned last week that they are considering a bid for the popular Wendy’s chain. They are currently a major stockholder. In a related story, Peltz resigned last week as the Chairman and Chief Executive of Triarc. How this may impact plans for the Wendy’s purchase has not yet been revealed.

HILTON
Hilton Hotels Corp. has announced it has agreed to be acquired by The Blackstone Group LP in a $26-billion deal. As the famous Hilton granddaughter would say, “That’s Hot!” The Blackstone Group already has ownership stakes in LaQuinta Inns and LXR Luxury Resorts and Hotels. Hilton owns or operates 2,800 hotels and 480,000 rooms in 76 countries under such brands as Doubletree, Embassy Suites, Hampton Inn & Suites, Homewood Suites, Conrad Hotels, Hilton Hotels, and Hilton Garden Inns. The purchase will also include the Waldorf-Astoria collection, a super-luxe line that caters to travelers with champagne tastes. While the most legendary Waldorf-Astoria is a New York City landmark, they also boast locations in Saudi Arabia, Hawaii, and Hollywood.

CHRYSLER + CHINA = CHERY DODGE
China certainly knows how to maintain that trade balance. The next made-in-China export heading for our shores will arrive in the form of a CAR. Yes, it’s true. The Chrysler Group just signed a deal with China’s largest automaker, Chery, to launch a low-cost production venture. China has long sought an entry into our car market, and Chrysler has now opened that door for them. The Chinese A1 compact will sell for between $7,000 and $8,000 under the Dodge Brand. The first model should hit our docks in about 2 1/2 years.

AIRLINE INDUSTRY CONTINUES DIVE
I’ll spare you the details and will avoid singling out any particular airline since they’re competitively fighting for that illustrious title of “America’s Worst Airline.” Just know that the first five months of this year have been the worst on record since 1995! The U.S. Department of Transportation reports new numbers signifying the bleakness that most of us flyers have sadly grown to accept as “normal.” Fewer flights are taking off on time, fewer flights are landing on time, more flights have been stranded on the runway, more passengers have been bumped, passengers filed 675 complaints in May versus 449 a year earlier, and lost baggage numbers continued to climb. Based on current trends, don’t look for things to get much better in the very near future.

About Harry K. Jones

Harry K. Jones is a motivational speaker and consultant for AchieveMax®, Inc., a company of professional speakers who provide custom-designed seminars, keynote presentations, and consulting services. Harry's top requested topics include change management, customer service, creativity, employee retention, goal setting, leadership, stress management, teamwork, and time management. For more information on Harry's presentations, please call 800-886-2629 or fill out our contact form.

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Microsoft, the software giant, is excavating a giant pit for an underground parking garage with the capacity for some 5,000 vehicles. When finished, it will be one of the largest underground parking structures in the United States.

It will cover the equivalent of six downtown city blocks and go four stories deep. The underground garage is scheduled to be completed by mid-2008. Microsoft now has nearly 29,000 parking spaces spread across its corporate campus in Redmond.

In 2006, the company announced a three-year plan to expand the campus by about one-third, or 3.1 million square feet, at a cost of roughly $1.3 billion. Parking at Microsoft has become such a hassle that the company began offering valet service for employees working in some buildings, as a temporary measure during construction.

About Harry K. Jones

Harry K. Jones is a motivational speaker and consultant for AchieveMax®, Inc., a company of professional speakers who provide custom-designed seminars, keynote presentations, and consulting services. Harry's top requested topics include change management, customer service, creativity, employee retention, goal setting, leadership, stress management, teamwork, and time management. For more information on Harry's presentations, please call 800-886-2629 or fill out our contact form.

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They’re b-a-c-k-k-k-k-k-k! After several years at the top of the Fortune 500, Wal-Mart was bumped into the second slot by Exxon Mobil in 2006. This surprised very few people based on rising oil prices the past few years. What did surprise many was the fact that Wal-Mart regained the coveted number one position this year despite rising oil prices. Wal-Mart revenues surpassed those of Exxon Mobil by four billion dollars. Listed below are this year’s Top Ten as chosen by Fortune Magazine.

1. Wal-Mart Stores – 351,139.0
2. Exxon Mobil – 347,254.0
3. General Motors – 207,349.0
4. Chevron – 200,567.0
5. ConocoPhillips – 172,451.0
6. General Electric – 168,307.0
7. Ford Motor – 160,126.0
8. Citigroup – 146,777.0
9. Bank of America Corp. – 117,017.0
10. American Intl. Group – 113,194.0

In their own category of general merchandisers,Wal-Mart’s revenues were greater than the next ten competitors combined!

1. Wal-Mart Stores – 351,139.0
2. Target – 59,490.0
3. Sears Holdings (K-Mart) – 53,012.0
4. Federated Dept. Stores – 28,711.0
5. J.C. Penney – 19,903.0
6. Kohl’s – 15,544.0
7. Dollar General – 9,170.0
8. Nordstrom – 8,561.0
9. Dillard’s – 7,849.0
10. Family Dollar Stores – 6,395.0
11. Saks – 3,564.0

Wal-Mart has, for some time, had their detractors for a variety of reasons. They’ve made some bad decisions and had their share of bad publicity, but they must be doing something right to maintain their phenomenal success. They’re currently America’s largest employer with 1.9 million employees, nearly equal to the population of the city of Houston.

Here’s an interesting side note. In 1962, Sears was our leading retailer followed by
K-Mart. Also, 1962 was the year we saw our first Target store appear on the scene, and the Wal-mart Corporation consisted of two small stores in Arkansas operating under the name of Walton’s 5 & 10. Re-read this paragraph and then check the listing above to see what happened in the retail business in this country. Makes you wonder what the next decade holds for us.

About Harry K. Jones

Harry K. Jones is a motivational speaker and consultant for AchieveMax®, Inc., a company of professional speakers who provide custom-designed seminars, keynote presentations, and consulting services. Harry's top requested topics include change management, customer service, creativity, employee retention, goal setting, leadership, stress management, teamwork, and time management. For more information on Harry's presentations, please call 800-886-2629 or fill out our contact form.

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Based on the feedback we receive from those attending our time management and stress management seminars, it’s quite evident that the majority of us appear to have less and less spare time to focus on newspapers, magazines, and television/radio newscasts to catch up on the latest business news. Internet surfing is even more time consuming.

To address that growing concern, we’d like to occasionally offer you a “big picture” update on recent business tidbits. Nothing in depth, just a quick overview to keep you “in the know.” For instance:

• The Borders Group appears to be in the midst of some major changes as a result of losing $73.6 million for the three months ending February 3. They plan to remodel their U.S. superstores, jump back into online bookselling, and close 300 of their 564 Waldenbooks stores by the end of next year. They’re also giving serious consideration to selling off most of their international businesses.
• The latest fund-raising trend among state governments appears in the form of privatizing their state lotteries. Illinois is the latest state to jump on this growing bandwagon. Governor Rod Blagojevich figures the sale of their lottery could raise as much as $10 billion. It currently generates approximately $650 million a year in profit on revenues of $2 billion, which is being spent on education. The new owner will receive all revenue and profit for 75 years. Two years ago, Chicago Mayor Richard Daley sold off a 7.8-mile tollway for $1.83 billion. Indiana is currently investigating the sale of their lottery as well.
• Time Magazinereports that consumer spending currently powers 70% of the U.S. economy! Interestingly enough, average DAILY purchases by U.S. consumers include:
  • 1,900,000 Krispy Kreme original glazed donuts
  • 87,431 Slim-Fast Optima multi-pack shakes (hopefully by those buying the donuts!)
  • 20,826 Dell notebook computers
  • 88,163 Apple iPods
  • 50,051,507 12 oz. cans of Pepsi
  • 125,000 Barbie dolls
  • 628 Toyota Camry 4-cylinder LEs
  • 2,400,000 Burger King Whoppers
• According to a recent study conducted by the University of Michigan, a person should take three half-hour naps at work each week in order to lower the risk of heart-related death.
• It is estimated that U.S. businesses are losing close to $150 billion per year due to lost productivity as a result of fatigue.

About Harry K. Jones

Harry K. Jones is a motivational speaker and consultant for AchieveMax®, Inc., a company of professional speakers who provide custom-designed seminars, keynote presentations, and consulting services. Harry's top requested topics include change management, customer service, creativity, employee retention, goal setting, leadership, stress management, teamwork, and time management. For more information on Harry's presentations, please call 800-886-2629 or fill out our contact form.

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Based on the feedback we receive from those attending our time management (The “I Hate Time Management” Program) and stress management (Stress: The Ultimate Paradox) seminars, it’s quite evident that the majority of us appear to have less and less spare time to focus on newspapers, magazines, and television/radio newscasts to catch up on the latest business news. Internet surfing is even more time consuming.

To address that growing concern, we’d like to occasionally offer you a “big picture” update on recent business tidbits. Nothing in depth; just a quick overview to keep you “in the know.” For instance:

• Researchers at the San Francisco Veterans Affairs Medical Center recently announced that hangovers cost our U.S. economy about $148 billion annually in worker absenteeism and poor job performance.
• Forbes Magazine has released the names of this year’s billionaires from
  around the world. For the 13th straight year, Bill Gates, Microsoft founder, holds the number one spot with $56 billion! Google co-founders Sergey Brin and Larry Page are in a three-way tie at 26th with Wal-Mart heir Alice Walton at $16.6 billion. Both men are just 34 years of age!
• Michigan-based furniture-maker La-Z-Boy, Inc. is apparently restructuring
  as they cut 500 of their 11,300 employees, close several plants across the nation, and consolidate several others. This strategy will apparently save them $11 million annually.
• Do you get mad when you see a FedEx or UPS truck blocking traffic by parking right in the middle of the street as they deliver packages to local stores? If so, this should make you feel a little better. In New York City, an average of 7,000 parking tickets a day are issued to commercial delivery services. Last year, these delivery companies paid more than $102 million in fines to the city!
• If you’ve got an ego and a few extra bucks, you can contact Madame Tussauds Wax Museum, and they will actually create a wax replica for you! You don’t have to be a star. They’ll do it for anyone. By the way, the few extra bucks must add up to $270,000!

About Harry K. Jones

Harry K. Jones is a motivational speaker and consultant for AchieveMax®, Inc., a company of professional speakers who provide custom-designed seminars, keynote presentations, and consulting services. Harry's top requested topics include change management, customer service, creativity, employee retention, goal setting, leadership, stress management, teamwork, and time management. For more information on Harry's presentations, please call 800-886-2629 or fill out our contact form.

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