Southwest Airlines shows off its unique history and company culture with its corporate office - see inside the company's Texas headquarters

Southwest Airlines found success with free booze, arm wrestling, and go-go boots - take a look at the 50-year-old airline's full history

<ul class="summary-list"><li>Southwest's former CEO created a "cult" focused on its headquarters, its pilots' union VP said.</li><li>Captain Tom Nekouei said in an open letter that Gary Kelly's chickens had "come home to roost." </li></ul>The man who ran Southwest Airlines for almost two decades turned it into a "cult" focused on its Dallas headquarters and failed to ensure the carrier could cope with weather-related disruption, a pilots' union official said.In a <a href="https://www.swapa.org/news/2022/two-legacies/">scathing open letter dated December 31</a>, Southwest Airlines Pilots' Association vice-president Captain Tom Nekouei accused Gary Kelly of prioritizing shareholders over staff during his time leading the company, and drew a direct link between his actions and its pre-Christmas chaos.Technical problems forced Southwest to cancel <a href="https://www.businessinsider.com/southwest-airlines-cancels-flights-holiday-metldown-2022-12">tens of thousands of flights</a> following winter storms. Captain Mike Santoro, another pilots' union vice-president, told Insider that the airline's "outdated" scheduling software made the disruption much harder to recover from than it otherwise should have.The airline experienced <a href="https://www.businessinsider.com/southwest-airlines-weather-system-glitch-grounds-delay-flights-passengers-2023-1">a further system glitch on Wednesday that grounded more flights</a>.Nekouei said "systemwide meltdowns" had become more frequent over the past 15 years, and there had never been any real accountability for the airline's decision-makers."And now, Gary Kelly's chickens have come home to roost. In true Southwest fashion, our executives continue to apologize and 'accept responsibility' out of one side of their mouths while making banal excuses that deflect from the true cause out of the other side," Nekouei wrote.<div type="image" title="Southwest Airlines CEO Gary Kelly" height="664" width="886" msid="96741911" hostid="261" sizebytes="22456"></div>Kelly <a href="https://www.swapa.org/news/2022/two-legacies/">took over as CEO of Southwest in 2004</a> from Herb Kelleher, who Nekouei said took an more employee-centric approach to operations and processes. Kelly stepped down as CEO in January 2022 but retains a powerful role as executive chairman.Nekouei said Kelly spent $12 billion buying back the company's stock during his tenure as CEO to maintain the share price — and therefore help boost his remuneration — rather than invest in systems "in desperate need of significant investment and upgrade.""While Gary's financial acumen cannot be debated, his poor operational leadership and judgment have been demonstrated repeatedly with each meltdown and finally laid bare with the current situation we find ourselves in," Nekouei wrote.Kelly's decision to bring in other top executives with accounting backgrounds led to "a monetization of the once vaunted Southwest culture and instead turning it into a headquarters-centric cult," he added. "Gary Kelly's only enduring legacy is that he destroyed Herb Kelleher's."A spokesperson for Southwest Airlines said it had a "more than 51-year history of allowing – and encouraging – its employees to express their opinions in a respectful manner."

Southwest's ex-CEO turned the airline into a 'cult' that couldn't recover from its 'meltdowns', says pilots' union official

<div class="KonaFilter image-container display-table click-to-enlarge"><div><div class="image on-image"><a title_source="Donna McWilliam/Getty Images" title_caption="American Airlines CEO Doug Parker." class="zoomin" href="https://static-ssl.businessinsider.com/image/5ce5aa1ad1f722116a18f324-960/gettyimages-161689921.jpg"><img src="https://static-ssl.businessinsider.com/image/5ce5aa1ad1f722116a18f324-2400/gettyimages-161689921.jpg" border="0" alt="Doug Parker American Airlines CEO" data-mce-source="Donna McWilliam/Getty Images" /></a>Donna McWilliam/Getty ImagesAmerican Airlines CEO Doug Parker.</div></div></div><ul class="summary-list"><li><a href="https://www.businessinsider.com/category/american-airlines" target="_blank" rel="noopener">American Airlines</a> CEO Doug Parker says the art of listening is an integral skillset for business leaders.</li><li>It's a lesson Parker learned by watching the late Herb Kelleher, founder and former CEO of <a href="https://www.businessinsider.com/category/southwest-airlines" target="_blank" rel="noopener">Southwest Airlines</a>.</li><li>According to Parker, listening is a skill that some business leaders may find to be counter to their natural inclinations because they feel the need to be the person who is talking and giving direction.</li><li><a href="https://www.businessinsider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories.</a></li></ul>American Airlines is the largest airline in the world with more than 130,000 employees and a fleet of 1,500 aircraft. At the helm of this corporate giant is Doug Parker. Parker first became an airline CEO in September 2001 at the age of 39 when he took over the top job at financially troubled America West. Twelve years and two mega-mergers later, he ascended his current position atop the Fort Worth, Texas-based airline.Read more: <a href="https://www.businessinsider.com/american-airlines-ceo-air-italy-qatar-airways-violate-openskies-2019-5" data-analytics-position="5">American Airlines CEO reveals why a small Italian airline is the focus of the nastiest feud in the airline industry</a>.Nearly two decades into his tenure as CEO, Parker says the most important lesson in management he ever received came by watching Herb Kelleher, the legendary founder and former CEO of Southwest Airlines. "As a younger CEO at industry meetings, I would just do everything I could to just hang around Herb, just to observe and hope I could get some of it through osmosis," Parker said of <a href="https://www.businessinsider.com/southwest-airlines-founder-herb-kelleher-has-died-2019-1" target="_blank" rel="noopener">Kelleher who passed away in January at the age of 87</a>. "What I learned in watching Herb was and what I picked up upon fairly early on is what an amazing listener he was."According to Parker, Kelleher's excellence as a listener was usually overshadowed by his charisma and gregarious personality.<div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5ce6bb31828ac137a77550f8-1500/2019-01-03t233506z1393497948rc148c536f30rtrmadp3people-kelleher.jpg" border="0" alt="Herb Kelleher 2005" style="color: #000000;" data-mce-source="REUTERS/Jim Young" />REUTERS/Jim YoungSouthwest Airlines founder Herb Kelleher.</div></div></div>"But really if you watch him, every conversation he was in was, he was really engaged, really listening," the American Airlines CEO said. "And what I realized is that was incredibly important to how he led because he learned and he took it back to his work and it made that company better and stronger.""He was in tune with what was happening at all levels of his company. And he really cared about it," Parker added. For Parker, listening is an integral skill to success even though it's not something you'd necessarily pick up in a business school class. It's something he's worked on over the years, but the American Airlines boss recognizes he's still not quite at the Kelleher's level. "That skill is one that I've had to work really hard on," he said. "I'm not even close to as good as Herb was at it, but I recognize the value of it."<div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5be4aa2ec9570178d221ecee-2400/american airlines.jpg" border="0" alt="American Airlines" data-mce-source="William Perugini/shutterstock" data-mce-caption="American Airlines Boeing 777 at New York JFK airport before boarding passengers." data-link="https://www.shutterstock.com/image-photo/new-york-usa-september-10-2014-218073721?src=j24K6iag2t1NhtHyvqYjmQ-1-23" /><a href="https://www.shutterstock.com/image-photo/new-york-usa-september-10-2014-218073721?src=j24K6iag2t1NhtHyvqYjmQ-1-23">William Perugini/shutterstock</a>American Airlines Boeing 777 at New York JFK airport before boarding passengers.</div></div></div>According to Parker, it's also a skill set that some business leaders may find to be counter to their natural inclinations because they feel the need to be the person who is talking and giving direction."What you need to do is listen intently to your team and the issues they're dealing with and then use that to go support them and help them and make sure they have the tools they need," Parker said. "Because there are teams out there, all they want to do is do exactly what we all want, which is take care of our customers, make the company stronger.""You don't need to tell them that, you need to listen to them about what we're doing that's stopping them from doing that and help them do that," he added. <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/uber-self-driving-taxis-test-drive-2016-9">We rode in a self-driving Uber - here's what it was like</a></h3> <div> <iframe class="bijwplayerclass" data-player="jwplayer" src="https://content.jwplatform.com/players/U6IZ6X36-CEZHWCBG.html" width="100%" height="100%" frameborder="0" scrolling="auto" style="margin:0px;" allowfullscreen=""></iframe><script>function receiveMessage(event){ console.log(event.data.fullscreen); Android.fullscreen(event.data.fullscreen); }window.addEventListener("message", receiveMessage, false);</script> </div> </div>

American Airlines CEO reveals the most important lesson he learned from the legendary founder of Southwest Airlines

<div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5c2e993fd4beaf391f75c396-1140/herbkelleher-source 1.jpg" border="0" alt="Southwest Herb Kelleher source (1)" data-mce-source="Southwest Airlines" />Southwest Airlines</div></div></div><ul class="summary-list"><li><a href="https://www.businessinsider.com/category/southwest-airlines" target="_blank" rel="noopener">Southwest Airlines</a> cofounder Herb Kelleher died on Thursday at the age of 87.</li><li>Kelleher, along with business partner Rollin King, founded Southwest Airlines in 1967.</li><li>He served as Southwest president and CEO from 1978 to 2001.</li></ul>Southwest Airlines cofounder Herb Kelleher died on Thursday at the age of 87. The Dallas-based airline confirmed Kelleher's death to Business Insider via email.In a statement, Southwest Airlines said:"We are deeply saddened to share that Southwest Airlines Founder and Chairman Emeritus Herbert D. Kelleher passed away today at the age of 87."Herb was a pioneer, a maverick, and an innovator. His vision revolutionized commercial aviation and democratized the skies. Herb's passion, zest for life, and insatiable investment in relationships made lasting and immeasurable impressions on all who knew him and will forever be the bedrock and esprit de corps of Southwest Airlines."The entire Southwest Family extends our deepest sympathies to Herb's wife, Joan, and his entire family."Kelleher, along with business partner Rollin King, founded Southwest Airlines in 1967. The low-cost airline commenced service in 1971 with three Boeing 737s serving the Texas cities of Houston, Dallas, and San Antonio.Read more: <a href="https://www.businessinsider.com/america-best-and-worst-airlines-ranked-according-to-the-points-guy-2018-3" target="_blank" rel="noopener">These are the 9 best airlines in America</a>.Kelleher served as Southwest's president and CEO from 1978 to 2001. The charismatic former lawyer served as the airline's chairman until 2008.<div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5c2e99fe0df1763472474705-2346/herbonplanetail-source.jpg" border="0" alt="Southwest Herb Kelleher on_Plane_Tail source" data-mce-source="Southwest Airlines" />Southwest Airlines</div></div></div>In the years since its founding, Southwest Airlines has developed into the world's largest low-cost airline with a fleet of more than 700 Boeing 737 jets, operating 4,000 flights a day.Southwest is also renowned if its industry-leading customer service and friendly demeanor. The airline is also one of the most profitable airlines in the world with 46 consecutive years of profitability. It's one of the only major airlines in the US to have never filed for bankruptcy.Kelleher is a graduate of Wesleyan University and the New York University Law School. <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/gumball-3000-rally-josh-cartu-win-ferrari-2018-12">What it's like to win the Gumball 3000 where drivers party until 2 am every night and drive 3,000 miles in 7 days</a></h3> <div> <iframe class="bijwplayerclass" data-player="jwplayer" src="https://content.jwplatform.com/players/zs3YJTuC-CEZHWCBG.html" width="100%" height="100%" frameborder="0" scrolling="auto" style="margin:0px;" allowfullscreen=""></iframe><script>function receiveMessage(event){ console.log(event.data.fullscreen); Android.fullscreen(event.data.fullscreen); }window.addEventListener("message", receiveMessage, false);</script> </div> </div>

The legendary founder of Southwest Airlines has died

It all started with one dumb lawA plush hotel in New York's John F. Kennedy Airport seems to be haunted by the ghost of aviation's good times.The <a href="https://www.businessinsider.com/twa-hotel-jfk-airport-abandoned-terminal-new-york-photos-2019-4">TWA Hotel</a> offers guests a luxurious stay, with 500 rooms, a rooftop pool, and a bar in an old retrofitted airplane. It also contains echoes of its past life as the TWA Flight Center, a hub for the <a href="https://traveltips.usatoday.com/twa-airlines-history-21998.html" target="_blank" rel="noopener">now defunct Trans World Airlines</a>. In TWA's heyday, airlines competed on experience, luring elite passengers with lavish meals and comfortable seats. Some of those golden-age amenities are present in the TWA Hotel, such as banks of pay phones and a luxe café <a href="https://www.twahotel.com/food-drink/paris-cafe" target="_blank" rel="noopener">built in the footprint of its dining predecessor</a>.But just across the tarmac, JFK's still working terminals stand as a stark contrast. This past year has been a nightmare for air travelers, featuring <a href="https://www.businessinsider.com/southwest-shareholders-sue-airline-allege-hid-scheduling-problems-before-meltdown-2023-1">epic flight meltdowns</a>, over <a href="https://www.businessinsider.com/american-jetblue-united-delta-lost-baggage-rate-lost-luggage-2022-9">a million mishandled bags</a>, and a nationwide ground stop caused by <a href="https://www.cnn.com/2023/01/13/business/airline-meltdowns/index.html" target="_blank" rel="noopener">outdated equipment at the Federal Aviation Administration</a>. It's almost impossible to imagine a time when air travel was pleasant, much less enjoyable.Aviation experts and industry groups say the story of air travel's service decline is one of priorities. Decades' worth of shortsighted decisions that prioritized efficiency and price cuts over quality and comfort came to a head during the pandemic, leaving millions of Americans trapped in a headache-inducing, feet-numbing flying purgatory with no signs of a long-term fix.<h2>The trade-off</h2>Johnny "Jet" DiScala, who visits more than 20 countries a year and runs <a href="https://www.johnnyjet.com/about-johnny/" target="_blank" rel="noopener">a popular travel blog</a>, could rattle off a dozen tips to make your next flight suck a little less. Unfortunately, he told Insider, there's not much to be done about one of his least favorite parts of flying: cramped legroom."When I started flying, legroom was, like, 39 inches," DiScala said, who started flying as a kid in the mid-1970s. "Now it's 28. That's criminal." The Washington, DC, advocacy group <a href="https://www.washingtonpost.com/transportation/2022/10/06/airline-seat-size-faa-smaller/" target="_blank" rel="noopener">Flyers Rights has estimated</a> that seats in economy have lost roughly 8 inches of legroom since the early 2000s. And while butts still vary in size, airlines have taken away about 2 inches of seat width. When the FAA started accepting public comments in August as part of an effort to determine whether it should set a minimum seat size, it received <a href="https://www.forbes.com/sites/suzannerowankelleher/2022/11/03/miserable-unsafe-torture-faa-deluged-shrinking-airline-seats/?sh=e1412a9227f5" target="_blank" rel="noopener">more than 26,000 comments</a> in 90 days, many from travelers complaining about shrinking legroom.The shrinking seat is just one of many casualties of our modern flying experience. At the heart of these changes is a trade-off made some 50 years ago. Before the 1970s, flying was a rich person's game, and only a small set of Americans traveled by plane for leisure. But federal deregulation designed to open up competition among airlines and bring down prices to make flying more accessible changed that. A <a href="https://www.airlines.org/dataset/air-travelers-in-america-annual-survey/" target="_blank" rel="noopener">long-running survey by the industry group Airlines for America</a> found that in 1971, only 21% of Americans said they'd taken a flight in the past year and just under 50% said they'd taken a flight in their lifetime. By 2019, just before the pandemic, 45% of Americans said they'd flown in the past year and almost 90% said they'd flown at least once in their lives. DiScala says the mass access is well worth it."I think now is the golden age of travel," DiScala said. "Now, because of deregulation, there is more competition, and there's airlines like Spirit, there's low-fare carriers, which allow pretty much anyone to fly."The shift did, however, have some unintended consequences. The effort to cut back on government rules opened up the airways to new companies, but it also set off a cost-cutting race to the bottom. The travel fiascos of the past year are just the latest results of this cost-cutting. Lost baggage, overbooked flights, outdated equipment, hidden fees, and disorganized staffing have fliers at their wits' end; consumer complaints about airline service <a href="https://www.bts.gov/newsroom/air-travel-consumer-report-consumer-complaints-against-airlines-rise-more-300-percent" target="_blank" rel="noopener">have risen by 300% from pre-pandemic levels</a>. And while these snafus cost passengers, they often have little recourse. "US airline companies tend to be very, very focused on the bottom line," Janet Bednarek, a history professor at the University of Dayton who specializes in the airline industry, told Insider. "And if they compete, they want to compete on price, and that means they're not competing on service."<h2>The law that changed it all</h2>The idealized images of the "jet set" of the 1950s, '60s, and early '70s — dressed to impress, with a cigarette in one hand and a martini in the other, enjoying impeccable service from the comfort of their cushy seat — were possible because the airlines were, <a href="https://simpleflying.com/50-years-airfares/" target="_blank" rel="noopener">as the industry blog Simple Flying put it</a>, "guaranteed profits." The federal government dictated almost everything about air travel: how much airlines could charge for airfare, which routes they could fly, even their schedules. Many of these measures had been put in place to <a href="https://www.faa.gov/about/history/brief_history" target="_blank" rel="noopener">improve safety</a> following some rattling accidents in the early days of commercial air travel. But as planes got safer and airlines got the hang of moving millions of people through the air, some of the more stringent rules seemed less necessary. So in 1978, at the urging of <a href="https://news.cornell.edu/stories/2010/12/alfred-kahn-father-airline-deregulation-dies-93" target="_blank" rel="noopener">the economist and "inflation czar" Alfred Kahn</a>, President Jimmy Carter enacted the Airline Deregulation Act. The law was part of a suite of policies designed to fight decades-high inflation through deregulation. The thinking seemed simple: With fewer rules about who could operate and where, new businesses could spring up to take on sclerotic incumbents, forcing everyone to bring down prices and serve more people.Before, only certain airlines could fly certain routes. And as Clifford Winston and Steven A. Morrison of Brookings <a href="https://www.brookings.edu/articles/the-fare-skies-air-transportation-and-middle-america/" target="_blank" rel="noopener">noted</a>, the regulators overseeing those routes and airlines often did not allow potential competitors in. With deregulation, a whole world of routes was opened to airlines. And as regulation eased, new airlines <a href="https://airandspace.si.edu/stories/editorial/airline-deregulation-when-everything-changed" target="_blank" rel="noopener">popped up</a>, eager to service previously guarded routes and set competitive prices. Southwest Airlines, the villain of the latest travel season, was able to take advantage of this new lack of rules to expand from a local carrier to a <a href="https://simpleflying.com/southwest-airlines-history/" target="_blank" rel="noopener">nationwide juggernaut</a>. Herb Kelleher, a cofounder of Southwest, <a href="https://library.unt.edu/gpo/NCARC/testimony/swa-te.htm" target="_blank" rel="noopener">once testified</a> that the Airline Deregulation Act "literally made the Southwest Airlines of today and the other low fare carriers I speak for possible."Some in the industry welcomed the idea of deregulation with open arms. In 1977, Richard J. Ferris, the president of United Airlines, <a href="https://www.nytimes.com/1977/03/25/archives/deregulation-splits-united-and-twa-united-twa-split-on-cut-in-us.html" target="_blank" rel="noopener">said</a> the soon-to-be-abolished regulations were "sowing the seeds of destruction" of quality airline service.Daniel May, the president of Republic Airlines, <a href="https://books.google.com/books?id=vk4p9si4kXgC&amp;printsec=frontcover&amp;source=gbs_ge_summary_r&amp;cad=0#v=onepage&amp;q=daniel%20may&amp;f=false" target="_blank" rel="noopener">said in testimony</a> in 1983, as deregulation fully came into effect, that "because of deregulation, the domestic airlines are offering the public far more and better service than they could have expected under regulation."But some airlines — including TWA — that had coasted on certainty and guaranteed profit margins were <a href="https://www.nytimes.com/1977/03/25/archives/deregulation-splits-united-and-twa-united-twa-split-on-cut-in-us.html" target="_blank" rel="noopener">against deregulation</a>, arguing that the competition would make fliers' lives worse and throw the industry into a bottom-line-focused fight for survival. "The view of airline deregulation from the cockpit is that it is a cruel hoax on taxpayers, on vast numbers of air travelers, on the stockholders of airlines," Henry Duffy, the president of the Air Line Pilots Association, <a href="https://books.google.com/books?id=vk4p9si4kXgC&amp;printsec=frontcover&amp;source=gbs_ge_summary_r&amp;cad=0#v=onepage&amp;q=casey&amp;f=false" target="_blank" rel="noopener">said in a 1983 Senate hearing on effects of the law</a>. He said deregulation had "transformed a once profitable industry into one where bankruptcies, actual and threatened, dominate the news," adding that "quantity and quality of service have been drastically cut back."As regulations eased, consumers felt relief. From 1976 to 1993, fares fell by a third — and deregulation accounted for 60% of that price drop, according to Winston and Morrison. From 2000 to 2004, <a href="https://www.brookings.edu/wp-content/uploads/2016/06/20050928winston.pdf" target="_blank" rel="noopener">they fell by 25%</a>. The number of competitors in each market increased to 3.5 in 2005 from 2.2 in 1980, <a href="https://www.gao.gov/assets/a250423.html" target="_blank" rel="noopener">a report from the Government Accountability Office said</a>. More people were flying.As competition drove prices down, it was no longer feasible to hire live bands for in-flight entertainment or pay for other luxuries. The cost cutting didn't stop there: Squeezing seats closer together allowed companies to sell more tickets to help cover costs. Sometimes customers didn't show up for a flight, so airlines started to sell more tickets than available seats — if they overbooked, they could just pay off the unhappy customer they'd bumped and still come out ahead. Many industry insiders eventually recognized the failed promises of deregulation."America's airline system has greatly deteriorated," Robert Crandall, a former American Airlines chairman, said in a 2008 speech. "Our airlines, once world leaders, are now laggards in every category, including fleet age, service quality, and international reputation." He added that "airline service, by any standard, has become unacceptable."Ultimately, however, the next decades showed that safely flying an aluminum tube full of people 30,000 feet in the air is an expensive endeavor. And while more people were able to jump on a jet, the race to the bottom caused plenty of headaches for consumers and airlines alike. In 2001, American Airlines acquired TWA, which had filed for bankruptcy three times. Without those guaranteed profits from the pre-deregulation era, the groundwork was laid for today's woes.<h2>A race to the bottom</h2>Today, the promise of more competition has mostly fallen by the wayside. Just four companies — Delta, American, United, and Southwest — controlled <a href="https://www.statista.com/statistics/250577/domestic-market-share-of-leading-us-airlines/" target="_blank" rel="noopener">66% of the market</a> in the US in 2021. And even as more Americans have started flying, the idea of dramatically cheaper flights seems to have faded: Airline-ticket prices are about 11 times what they were in 1969, while inflation has made overall prices about eight times what they were then. Jeffrey Price, a professor and aviation-security consultant, said that with few other options beyond air travel to get across the country, airlines essentially have a monopoly over long-distance transportation."We don't really have any other alternatives," such as a national high-speed rail system, Price said. "Leisure passengers are totally at the mercy of the airlines unless they really want to go get a recreational vehicle, and most people don't have that kind of time in their vacation days anymore to do that," he said.<iframe title="Airline fares outpaced overall inflation since the 1980s, but have come down in recent years" id="datawrapper-chart-VVUOV" src="https://datawrapper.dwcdn.net/VVUOV/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="500"></iframe>At the same time, airlines are scrambling to hang on to any profits they can. Pay for pilots, airline workers, and airport employees <a href="https://www.businessinsider.com/airport-service-workers-plan-picket-rally-for-better-pay-conditions-2022-12">has been slashed</a>, contributing to a serious labor shortage. Plus, with an eye toward cost cutting, the industry has been slow to update its technology, as evidenced by the <a href="https://www.businessinsider.com/faa-flights-delays-cancellations-outage-2023-1">FAA systems outage</a> on January 11 that affected more than 9,000 flights."The system is antiquated, doesn't have adequate backups, as we all saw, and needed to be upgraded 20 years ago, not six years from now," Price said.That upgrading effort, known in the industry as Next Generation, has been in the works since 2003. Price said that while some of the delay is due to standard bureaucracy, the industry also doesn't have an incentive to pick up the pace if things are moving relatively smoothly. "Shutting down the US airspace system has not been done since 9/11. Now we saw that it can be done because somebody put the wrong file in some folder or something," he said. "The system, it's way too fragile."All this cost cutting is weighing on the customer experience. Those FAA comments from August? Well, they were predictably blunt."Well, where can I start? May I begin with an inner laugh? Take out all extra seats that the airline so greedily put in place," one commenter <a href="https://www.regulations.gov/comment/FAA-2022-1001-3561" target="_blank" rel="noopener">wrote</a>. "The airlines are reacting like food vendors; they raise the price and cut down on the amount of food in the package and the quality."Airlines have also cut down on how much food fliers get, offering measly bags of pretzels instead of the deluxe meals of 50 years ago. "Food and drink and all of that is weight, and weight equals more fuel needed to fly the plane," Bednarek, the history professor, said. "So anywhere that they can cut costs and make it less expensive for them to fly you so they can get more return off of the ticket price that you pay, that's what they're going to do."But Airlines for America and the International Air Transport Association, which represent the major US airlines, have said they want to make sure the government remains focused on safety "<a href="https://www.regulations.gov/comment/FAA-2022-1001-24831" target="_blank" rel="noopener">and not comfort or convenience</a>." So what's a squeezed passenger to do? "People could stop flying," Bednarek said. And some people are: Business travel, which provides airlines their greatest profit margin, has especially struggled to recover from the pandemic. Congress has also taken steps to try and improve the flying experience and give customers more power, like mandating an aviation consumer advocate at the Department of Transportation, but they largely rely on individual travelers to change their behavior.Perhaps it's time for travelers to reconsider whether the trade-off the government made on their behalf is working. Yes, more people are flying — but sometimes you're paying to get booted off a plane, get stuck in an airport, or scour the globe for your luggage. It might be worth it to pay a little more than to pay for nothing at all. Just take a stroll through the halls of the TWA Hotel, where there's ample legroom at the bar in a vintage plane, and you might get a little nostalgic for flights —and regulations — gone by. <hr /><a href="https://www.businessinsider.com/author/bartie-scott">Bartie Scott</a> is a senior economy editor at Insider.<a href="https://www.businessinsider.com/author/juliana-kaplan">Juliana Kaplan</a> is a senior labor and inequality reporter on Insider's economy team.

How a grand attempt to improve airline travel backfired &mdash; and ended up turning flying into a total nightmare

<div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5c2f0813bd77305964721722-1800/ocasio cortez.jpg" border="0" alt="Ocasio cortez" data-mce-source="Win McNamee/Getty Images" data-mce-caption="WASHINGTON, DC - JANUARY 03: Member elect Rep. Alexandria Ocasio-Cortez (D-NY) talks to fellow members of Congress during the first session of the 116th Congress at the U.S. Capitol January 03, 2019 in Washington, DC. Under the cloud of a partial federal government shutdown, Speaker of the House Rep. Nancy Pelosi (D-CA) reclaimed her former title as speaker and her fellow Democrats took control of the House of Representatives for the second time in eight years." />Win McNamee/Getty ImagesWASHINGTON, DC - JANUARY 03: Member elect Rep. Alexandria Ocasio-Cortez (D-NY) talks to fellow members of Congress during the first session of the 116th Congress at the U.S. Capitol January 03, 2019 in Washington, DC. Under the cloud of a partial federal government shutdown, Speaker of the House Rep. Nancy Pelosi (D-CA) reclaimed her former title as speaker and her fellow Democrats took control of the House of Representatives for the second time in eight years.</div></div></div>Hello! Here's everything you need to know on Friday, Janury 4.1. <a href="https://www.businessinsider.com/apple-revenue-trump-china-trade-war-tariff-argument-2019-1" data-analytics-position="1" data-analytics-module="hero_tout">Apple's shock quarterly warning didn't just reveal an unexpected weakness.</a>It also strengthened one of US President Donald Trump's main reasons for going to war on trade with China.2.<a href="https://www.businessinsider.com/house-democrats-pass-two-funding-bills-to-reopen-the-us-government-2019-1" data-analytics-position="2" data-analytics-module="big_picture">In a show of willingness, newly empowered Democrats in the US House of Representatives passed two funding bills to reopen the government.</a>Newly elected House speaker Nancy Pelosi described Trump's demand for money to bolster barriers on the US-Mexico border as "a wall between reality and his constituents."3.<a href="https://www.businessinsider.com/paul-whelan-espionage-russia-maria-butina-intel-veterans-react-2019-1" data-analytics-position="4" data-analytics-module="featured_post">National-security experts say a US veteran held in Russia doesn't fit the profile of a spy.</a> But he certainly fits the bill for someone who could be leveraged for a prisoner swap.<a href="https://www.businessinsider.com/trump-organization-putin-penthouse-trump-tower-moscow-2018-11"></a>4. <a href="https://www.businessinsider.com/james-stavridis-admiral-letter-trumps-generals-2019-1" data-analytics-position="10" data-analytics-module="featured_post">Now another retired US military leader has taken umbrage with Trump's idea of what it means to serve.</a> In a take-no-prisoners opinion column, retired four-star US Navy Adm. James Stavridis said Trump thinks his generals are "Rambos."5. <a href="https://www.businessinsider.com/china-warning-what-to-know-before-visiting-the-country-2019-1" data-analytics-position="12" data-analytics-module="big_picture">The US has issued warnings for Americans about new and old dangers for travelers visiting and trying to exit China.</a>Read this before you think about going. 6. <a href="https://www.businessinsider.com/southwest-airlines-founder-herb-kelleher-has-died-2019-1">The industry legend behind Southwest Airlines has flown for the final time.</a> Herb Kelleher, the larger-than-life cofounder of the low-cost airline, died on Thursday, aged 87.7. <a href="https://www.businessinsider.com/saudi-arabia-death-penalty-jamal-khashoggi-killing-2019-1" data-analytics-position="17" data-analytics-module="onecolumn-post_image">Saudi Arabia says it will seek the death penalty for five suspects allegedly involved in Jamal Khashoggi's killing</a>. Prosecutors said 11 suspects attended their first court hearing, asking for time to prepare their defense.<a href="https://www.businessinsider.com/uber-ceo-tells-employees-self-driving-car-unit-screwed-up-2018-11"></a> 8.<a href="https://www.businessinsider.com/china-and-japan-have-surprised-with-strong-economic-data-to-end-2018-2019-1" data-analytics-position="" data-analytics-module="onecolumn-post_image">China and Japan have surprised everybody with some sparky economic data to close out 2018</a>. Manufacturing data for both Asian powerhouses beat forecasts for December.<a href="https://www.businessinsider.com/at-least-2-dead-in-what-may-have-been-a-car-chase-with-border-patrol-2018-11"></a>9. <a href="https://www.businessinsider.com/the-most-diverse-congress-in-us-history-is-sworn-in-2019-1">Democrats have taken the reins in the US House of Representatives.</a> And it's the most diverse Congress in US history.10. <a href="https://www.businessinsider.com/china-tobacco-international-ipo-hong-kong-2019-1" data-analytics-position="" data-analytics-module="onecolumn-post_image">Big Chinese tobacco is planning to take itself public in Hong Kong</a>. The international division of China's cigarette monopoly hopes to raise $100 million and breathe new life into ailing global smoking markets.And finally ...<a href="https://www.businessinsider.com/alexandria-ocasio-cortez-house-vote-nancy-pelosi-speaker-2019-1" data-analytics-position="23" data-analytics-module="onecolumn-post_image">Democratic Rep. Alexandria Ocasio-Cortez of New York to GOP lawmakers who she claims booed her:</a> "Don't hate me cause you ain't me." <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/china-east-experimental-advanced-superconducting-tokamak-nuclear-fusion-reactor-100-million-degrees-2018-12">China made an artificial star that's 6 times as hot as the sun, and it could be the future of energy</a></h3> <div> <iframe class="bijwplayerclass" data-player="jwplayer" src="https://content.jwplatform.com/players/zHpyLi0q-CEZHWCBG.html" width="100%" height="100%" frameborder="0" scrolling="auto" style="margin:0px;" allowfullscreen=""></iframe><script>function receiveMessage(event){ console.log(event.data.fullscreen); Android.fullscreen(event.data.fullscreen); }window.addEventListener("message", receiveMessage, false);</script> </div> </div>

The 10 most important things in the world right now

<div class="image-container float_right" style="width:400px"><div class="image"><img src="http://static4.businessinsider.com/image/50f71d0c69bedd3f2c000011-400/herb-kelleher.jpg?maxX=400&amp;maxY=300" border="0" alt="Herb Kelleher" width="400" height="300" /></div>Southwest</div>Southwest is one of the most admired companies in the country, respected in an industry that's better known for delayed flights and <a href="http://www.businessinsider.com/15-worst-companies-for-customer-service-2013-1">bad customer service</a> than a great corporate <keyword id="24504" type="ORGANIZATION" weightage="60" keywordseo="culture">culture</keyword>.
Not to mention the fact that it's remained profitable in a sector that rarely is. 
One of the reasons for that is its founder, Herb Kelleher, who put an enormous amount of emphasis on culture and the customer experience, something that's persisted even after he stepped down as CEO. 
Naturally, throughout his time at the helm, and even now, companies have wanted to know the formula, the secret behind Southwest's culture and success. In <a href="http://management.fortune.cnn.com/2013/01/14/kelleher-southwest-airlines/">an interview with Fortune's Jennifer Reingold</a>, he reveals that there isn't one:
We held Corporate Day for many, many years, and we had a good many companies that came in. And they basically wanted to know how we hired, how we trained, and how we motivated. And so we would tell them. And many of them, I think, were looking for some formula, you know, that you could put on the blackboard. The concept is simple, but the execution takes a lot of work and a lot of attention.
... It's not formulaic. The way I describe it is this huge mosaic that you're always adding little pieces to, to make it work. And it's not a job that you do for six months and then you just say, "Well, that's behind us." It's something you do every day.
According to Kelleher, really focusing on every person at the company, not just their work but them personally, requires a huge information network. Everybody has metrics and business intelligence, but very few companies are willing to put that much effort, time, attention, or money into proving to employees that they care. It seems like an odd thing to focus on as a business, but one that's worked for Southwest. 
Kelleher was reluctant to call it a <keyword id="6363690" type="PERSON" weightage="60" keywordseo="strategy">strategy</keyword>, saying that people only like the word because "it sounds important, like the Strategic Air Command." But his core message, having a simple set of values and committing to them, is actually a way of getting things done faster.
"Having a simple set of values for a company was also a very efficient and expedient way to go," Kelleher said. "Because if somebody makes a proposal and it infringes on those values, you don't study it for two years. You just say, "No, we don't do that." And you go on quickly."
It's a simple way to do things, but certainly not an easy one. It only works if the people in a company understand and define the culture for themselves. Southwest started out doing that, and because there's no formula or quick fix, it's an incredibly difficult thing to replicate at all in a world where initiatives are often measured in months. 
Find the full interview <a href="http://management.fortune.cnn.com/2013/01/14/kelleher-southwest-airlines/">here</a>
NOW READ: <a href="http://www.businessinsider.com/career-advice-from-top-executives-2013-1">28 Top Executives Share What They Look For In Hires </a>

Southwest's Founder Explains Why There's No Secret Behind Its Great Culture

<div class="KonaFilter image-container display-table"><div><div class="image on-image"><img src="https://static-ssl.businessinsider.com/image/5cf7c55511e2050ddf5a2128-2400/scott kupor a16z.png" border="0" alt="scott kupor a16z" data-mce-source="Courtesy of Andreessen Horowitz" />Courtesy of Andreessen HorowitzScott Kupor.</div></div></div><ul class="summary-list"><li><a href="https://www.businessinsider.com/category/venture-capital">Venture capital</a> isn't as complicated as it might seem.</li><li>Business Insider spoke to Andreessen Horowitz's managing partner and first hire, Scott Kupor, about what he looks for in founders.</li><li>Kupor recently published the book "Secrets of Sand Hill Road."</li><li>He said Andreessen Horowitz has always looked for founders who are overly confident in themselves and their business idea.</li><li><a href="https://www.businessinsider.com/?hprecirc-bullet">Visit Business Insider's homepage for more stories.</a></li></ul><a href="https://a16z.com/author/scott-kupor/">Scott Kupor</a> was employee No. 1 at <a href="https://a16z.com/">Andreessen Horowitz</a>, the venture-capital turned <a href="https://www.businessinsider.com/marc-andreessen-andreessen-horowitz-financial-services-2019-4">financial-services firm</a> that's bet on tech darlings like Facebook, Airbnb, and Lyft.In a former life, Kupor was a banker at Credit Suisse, where his responsibilities included overseeing companies' IPOs. In 1999, an executive at one of those companies said he was leaving to join the software startup LoudCloud, cofounded by one Marc Andreessen. Kupor was intrigued.At a Denny's restaurant in Sunnyvale, CA, Andreessen drew on a napkin to illustrate his ambitions for LoudCloud. The pitch was compelling enough that Kupor quit his job in finance and made the seemingly irrational decision to sign up.LoudCloud, which Kupor considers a proto-Amazon Web Services, became Opsware and was bought by Hewlett Packard. With the Opsware acquisition under their belt, Andreessen and his LoudCloud cofounder Ben Horowitz set their sights on building a venture-capital firm that would do more than simply write checks. They'd also provide startup founders with long-term support and guidance.Since Andreessen Horowitz launched in 2009, Kupor and his colleagues have seen thousands of pitches from new and aspiring startup founders. They currently manage a total of $10 billion in assets.Kupor's new book, "<a href="https://www.amazon.com/Secrets-Sand-Hill-Road-Venture/dp/059308358X">Secrets of Sand Hill Road: Venture Capital and How to Get It</a>," demystifies the world of venture capital, from the legalese on a <a href="https://www.businessinsider.com/entrepreneurship-guide-venture-capital-term-sheets-startups-2019-5">term sheet</a> to the overall framework VCs use to <a href="https://www.businessinsider.com/entrepreneurship-guide-pitch-deck-startup-venture-capitalist-raise-money-2019-3">evaluate potential investments</a>. (Sand Hill Road is a street in Silicon Valley that's home to multiple VC firms, including Andreessen Horowitz, and has become a byword for the venture industry.)We sat down with Kupor and learned why Andreessen Horowitz had always looked for "egomaniacal" founders, why entrepreneurs with no relevant industry experience can be the most successful, and why some perfectly worthwhile businesses will never need an influx of capital.The following interview has been edited for length and clarity.Shana Lebowitz: I want to hear more about your decision to join what was then LoudCloud. You had a job. You were starting a family. And you weren't sure about joining. So how did you decide?Scott Kupor: There were a couple of things. From a personal perspective, the job of being a banker in the [1990s tech] bubble was that you lived on a plane for 24 hours a day. It also meant that just when you thought you had a Friday and a weekend off, somebody would call at 5 o'clock on Friday and say, "By the way, we're pitching for this business on Monday morning, so I'm sorry if you had weekend plans, but we need to see a draft of a presentation." That got old after a while.The other thing though was more positive. When you're a banker, you go on these road shows with companies. I would listen to these stories, and I just found myself fascinated with it. I was like, "Wow, it's amazing to hear the storytelling from these entrepreneurs."When I went into this interview with Marc [Andreessen], I'd never met him before. And he's both physically imposing and he talks fast. He gave me his whole conquer-the-world strategy. He's like, "Look, this is how we're going to do it, and this is what it's going to mean, and this is what the opportunity is." I'm not sure I made a rational decision at all.Read more: <a href="https://www.businessinsider.com/the-muse-ceo-kathryn-minshew-advice-start-a-business-2018-7">The 33-year-old CEO of a successful startup reveals the key to minimizing risk when you leave a steady job to become an entrepreneur</a><h2>Andreessen Horowitz used to say they invested primarily in 'egomaniacal' founders</h2>Lebowitz: You've worked for a startup; you also invest in startups now. Have you noticed that there are common themes in entrepreneurs?Kupor: It's always dangerous to overgeneralize. But I really do believe you have to be willingly able to suspend disbelief in some respects to do a startup. Because we know the odds of success are just really low. The math just tells us that. And you're probably not likely to achieve, unfortunately, the business outcome that you had hoped.When we started [Andreessen Horowitz], when we pitched our first fund, we said that we would invest in 'egomaniacal founders.' We literally had a bullet in our slide deck. The LPs looked at that and they said, "That's crazy - how could that be a positive characteristic of who you want to invest in?"Read more: <a href="https://www.businessinsider.com/entrepreneur-kathryn-minshew-tricks-to-success-2018-3">A startup founder who was rejected 148 times by VCs made these 2 small changes to her pitch, and she's since raised nearly $30 million</a>We realized, of course, the word choice probably wasn't that great. But that was the concept: We wanted people who were so confident in themselves that they were literally willing to quit their jobs and start over from scratch and walk through walls and do something that everybody has told them to their face is a waste of time or can never happen.Over time, you have to be able to soften it to the point where you can attract employees. You can work with business partners. Some people can get away with it maybe their whole careers, but I think the really successful entrepreneurs are able to willfully suspend disbelief, but then also figure out a way to not make themselves impossible to deal with.The other fairly consistent thing that we see in entrepreneurs is the ability to articulate what it is that makes the opportunity so compelling. You really can tell the difference between people who believe in what they're doing and who have the ability to convey that enthusiasm and people who may just - it's a job for them, as opposed to this is what they feel compelled to do as their life's mission.<h2>A startup's founding team matters as much to VCs as the business idea</h2>Lebowitz: Is it inherently bad if you see starting a company as just like any other job, as opposed to something you're compelled to do?Kupor: It's not normatively bad. I don't know if I can prove this mathematically, but you would imagine that, given how hard it's going to be to build a business, if you don't go into it with that organic pull, you may not actually be willing to sustain all the challenging times that exist in the organization.Read more: <a href="https://www.businessinsider.com/mark-cuban-backed-startup-founder-kim-taylor-cluster-hiring-2019-3">A founder who sold her first company for $25 million and landed Mark Cuban as an investor (twice) shares exactly what to say to pass a job interview at any startup</a>Lebowitz: Are there certain pitches you've seen that are emblematic of what you want to see in a founder or in a new business?Kupor: The first real priority question for us is, "Is the market size that they're going after big enough that it can sustain a stand-alone viable, profitable business?" And that's just a function of the fact that we're wrong, unfortunately, more often than we're right on these things. We have to at least go into the decision at the outset thinking, "Okay, what could this be? If this is successful, how big can it be and what can it look like?"Once they answer that question, the teams that do really well help us understand why this team is the best team to go [execute] that opportunity as opposed to any of the other three, four, five, groups that might come in with a similar idea.We have some [other] heuristics that we look at internally. "What was the problem that you were trying to solve? What experience brought you to that problem?" And in some ways we love to see [that] you felt so compelled to solve that problem and you almost got forced into building a company because you realize the problem was bigger than what you were doing.The third big area is, we really are interested in the entrepreneur's thinking around the product. We use this term "Idea Maze." What was the Idea Maze that they ran through in order to get to the ultimate product that they believe, at least, is the solution to the problem?<h2>Every founder Andreessen Horowitz invests in has an 'earned secret,' whether they've worked in the industry for years or just entered it</h2>Lebowitz: How often is it the case that people feel compelled to start a company as opposed to the alternative?Kupor: There is one interesting counter[example], which is that backing somebody who has no predilections about the business and no preconceived notions about what that business might be, in some cases might actually be a good idea.Herb Kelleher was the CEO of Southwest Airlines, and people asked him what his qualifications were for starting an airline business and his answer was, "Because I know absolutely nothing about the airline business."We always had this challenge when we first started [Andreessen Horowitz]. We would see a lot of LoudCloud-like pitches. And between myself and Mark and Ben, we had so much [residual anxiety] from having lived through all of the nightmares of running that business that we almost just redlined that area. The bliss of ignorance, to a certain extent, can be helpful.Lebowitz: If I were thinking about starting a company, how would I know if my experience is going to work to my benefit or detriment?Kupor: The two founders of <a href="https://www.okta.com/">Okta</a>, Freddy [Frederic Kerrest] and Todd [McKinnon], both grew up in Salesforce. So, Todd ran engineering and Freddy was part of the business development team there. In that case, they came from the industry and because they came from the industry, they had a unique insight that other people didn't, which was that the proliferation of these applications makes it very hard for the existing user authentication and security mechanisms to work.Where sometimes these things go wrong is, if you've been in the financial-services industry for 25 years and therefore your mental model has become constrained by the fact that you're used to doing things a certain way, you get a little bit calcified.Read more: <a href="https://www.businessinsider.com/business-entrepreneurship-advice-kara-goldin-hint-ceo-2019-2">A CEO who launched her company 14 years ago says too many founders have it all backward</a>Lebowitz: You say early on in the book that not every business needs to raise capital. Do you see this happening a lot, where people think raising money is trendy but don't really need to?Kupor: That either manifests in a market size maybe not as big as people thought, or it might manifest in an entrepreneur who says, "Look, I think I can build a nice business, and I'm OK if it doesn't grow 100% a year. It'll be a nice $20 or $30 million dollar business, and it might generate some cash flow."That's a perfectly fine business to build. It's just that, for a venture capitalist who knows that they're going to be wrong a lot of the time, they have to figure out what's the likelihood this company could be in that upper-right tail of returns. You just get this cognitive dissonance between the interest of the entrepreneur and the objectives that the VCs have.When we're doing an early-stage investment, what we're trying to imagine is the "what if?" question. "What if this company worked? What could it look like? How big could it be? How much revenue could it generate? Ultimately what could the equity value be?"The rest of the analysis is, "What do I think the likelihood is of that happening based upon this team and their background and all the things that I've learned about them and anything I might know about the competition in the market space?" We have to believe that it can get there even though we know the likelihood is most of them will never get here. Forty percentThe will just go to zero at some point in time. <div class="margin-top"> <h3>NOW WATCH: <a href="https://www.businessinsider.com/beyonce-jay-z-net-worth-music-first-billionaire-couple-money-billion-2019-4">Jay-Z is hip-hop's first billionaire. See how he and Beyoncé make and spend their money.</a></h3> <div> <iframe class="bijwplayerclass" data-player="jwplayer" src="https://content.jwplatform.com/players/ODxKefSZ-CEZHWCBG.html" width="100%" height="100%" frameborder="0" scrolling="auto" style="margin:0px;" allowfullscreen=""></iframe><script>function receiveMessage(event){ console.log(event.data.fullscreen); Android.fullscreen(event.data.fullscreen); }window.addEventListener("message", receiveMessage, false);</script> </div> </div>

The first employee of Andreessen Horowitz - the legendary early investor in Airbnb and Facebook - unpacks why he left banking, the first questions for every pitch, and the promise of 'egomaniacal' founders

<div class="KonaFilter image-container display-table click-to-enlarge"><div><div class="image on-image"><a title_source="Courtesy of Kip Tindell" title_caption="Kip Tindell, chairman and CEO of The Container Store." class="zoomin" href="https://static-ssl.businessinsider.com/image/543bd8dbeab8ea8074bc821e-960/kip-tindell-container-store.jpeg"><img src="https://static-ssl.businessinsider.com/image/543bd8dbeab8ea8074bc821e-1200-924/kip-tindell-container-store.jpeg" border="0" alt="Kip Tindell container store" /></a>Courtesy of Kip TindellKip Tindell, chairman and CEO of The Container Store.</div></div></div>If launching a store that sells only containers is any indication, Kip Tindell has always thought outside the box.
The 61-year-old chairman and CEO of The Container Store founded the quirky retailer in 1978 with two friends and an initial investment of $35,000. Today, it has 6,000 employees, 67 locations in the US, and annual sales of nearly $800 million.
How has a wild idea from Dallas, Texas, achieved such growth? Tindell attributes the company's success to a few simple-yet-unexpected rules, like women make the best executives, business is personal, and companies have a moral obligation to their employees.
Tindell writes about this feel-good brand of leadership in his new book, "<a href="http://www.amazon.com/Uncontainable-Commitment-Conscious-Capitalism-Business-ebook/dp/B00I829QBG/">Uncontainable: How Passion, Commitment, and Conscious Capitalism Built a Business Where Everyone Thrives</a>." He talks to us about what it looks like in practice.
This interview has been condensed and edited for clarity.
Business Insider: In your new leadership book, you use words like "love" and "yummy" to describe your culture and write that after a business meeting with you, you might get a hug. Is that just who you are?
Kip Tindell: It is who I am. Intellectual intelligence is really important, but what's more important in a leader is high <a href="http://www.businessinsider.com/mistake-people-make-with-emotional-intelligence-2014-8">emotional intelligence</a>. That's why I think women make better executives than men.
BI: That's a bold statement.
KT: I'm glad to see the feminization of American business. Emotional intelligence is the key to being really successful. People who have it keep their egos in check; they're comfortable with surrounding themselves with people better than them. They're high on Maslow's hierarchy of needs. They aren't hungry or insecure. They're calm and have self-awareness. 
BI: How many women executives do you have at The Container Store?
KT: Roughly 70% of the top leadership positions at our company are held by women.
BI: That's a reversal of the gender breakdown at most major companies. Was that an intentional choice?
KT: We were just looking for the best leaders. Obviously, we have nothing against men. It's just that the skillset - communication, empathy, emotional intelligence, understanding what we stand for (Conscious Capitalism, servant leadership), and being like our target customer - really fits the bill with women. When we did our board, though, we did seek out women because we wanted the board to reflect company management.
BI: Hiring is a big part of your strategy. Tell me about your "1 great person = 3 good people" rule.
KT: We're talking about business productivity. Of course, no one person is better than another person as a person. But if you can, why not hire great people? And you can pay them twice as much and still save, since you get three times the productivity at two times the cost. They win, you save money, the customers win, and all the employees win because they get to work with someone great. These people are the best in the industry, and I can't wait to get up in the morning and work with them.
BI: Do you think that's why the company's turnover rate is just 10% compared to the <keyword id="6354851" type="ORGANIZATION" weightage="60" keywordseo="Retail">retail</keyword> industry average of about 100%?
KT: I think that's the biggest reason. People join this company and never leave. They make $48,000 a year on average. That's a lot of money for a retail sales clerk.
If you're lucky enough to be an employer, you have a moral obligation to create a great work environment. If people work for a company that treats them with respect, they go home and treat their families better.
BI: In your book, you detail the seven principles that the company is built on, and you also write that they all boil down to the Golden Rule: Treat others as you'd like to be treated. Why is that your guiding principle?
KT: Life isn't a zero-sum game, and business isn't a zero-sum game. People who think it is don't do well in business. It's much easier to succeed when people love you and want you to do well.
<div class="KonaFilter image-container float_right" style="width:400px"><div class="image"><img src="https://static-ssl.businessinsider.com/image/543bd93becad04ce42a743f8-800-1196/tindelluncontainable%20resized.jpg" border="0" alt="Tindell UNCONTAINABLE book" width="400">Courtesy of Kip Tindell</img></div></div>
BI: You managed to get out of the recession without doing any layoffs. Why was that important to you?
KT: We've never laid anybody off in the history of the company. We do fire people. We are a meritocracy and want excellence. But laying people off is a very distinct thing. When times are tough you do have to adjust your expenses to your sales. Laying people off is an easy way to do it, but it's not the best way to do it.
At the height of the recession I was at a big bank's conference and many top leaders were there; I was the least important person in the room. I didn't like what I saw. It was a testosterone-fueled competition for who was laying the most people off. It was very upsetting.
BI: How were you able to avoid it?
It was like holding hands at the dinner table as a family and talking about how we were going to spend less money. Salaries were frozen, and 401(k) matches were suspended for awhile. Employees were happy about it because they were saving their colleagues.
Sales over the two-year period from 2008 to 2009 were down about 13% to 14%. But we bounced back quicker after the recession because of the loyalty factor. [Southwest Airlines cofounder and former CEO] <a href="http://www.businessinsider.com/southwests-founder-discusses-its-culture-2013-1">Herb Kelleher</a> is one of my heroes, and he said: You can build a much better organization on love than you can on fear.
BI: Some of your philosophies sound similar to those held by John Mackey, the cofounder and CEO of Whole Foods Market. I see that you're on the board there and even went to college with Mackey. How has he influenced your thoughts on business?
KT: We were college roommates! I thought he was the most interesting kid at the University of Texas [at Austin]. He and I were both really interested in philosophy. He majored in philosophy, and I majored in English. We wound up roommates and each went on to start a retail business, which is bizarre. We didn't talk about retail in college. We talked about girls.
Today, we don't agree on anything in politics, but we agree on everything in business. We both believe in <a href="http://www.businessinsider.com/companies-that-practice-conscious-capitalism-perform-10x-better-2013-4">Conscious Capitalism</a>, that a win-win is what's most profitable, and that no one has to lose. Business schools have discovered it, studied it, and found that companies that practice it are more successful.
BI: What else has inspired you? What are some of your favorite business books?
Mackey and Raj Sisodia wrote a book called "<a href="http://www.amazon.com/Conscious-Capitalism-New-Preface-Authors-ebook/dp/B00GQDL7MA/">Conscious Capitalism</a>," which is a great primer, and before that Raj wrote "<a href="http://www.amazon.com/Firms-Endearment-World-Class-Companies-Passion/dp/0131873725/">Firms of Endearment</a>." Danny Meyer's book "<a href="http://www.amazon.com/Setting-Table-Danny-Meyer-ebook/dp/B000OI0FCQ/">Setting the Table</a>" is one of the best books ever written and influenced our customer service. Roy Spence has a funny book called "<a href="http://www.amazon.com/10-Essential-Hugs-Life/dp/1626340269/">The 10 Essential Hugs of Life</a>." I also like "<a href="http://www.amazon.com/Discovering-Soul-Service-Sustainable-Business-ebook/dp/B000FC0NIC/">Discovering the Soul of Service</a>" by Leonard Berry, and "<a href="http://www.amazon.com/Peak-Companies-Maslow-non-Franchise-Leadership-ebook/dp/B0067KS0VS/">Peak</a>" by Chip Conley explores Maslow's hierarchy of needs in business.
BI: This week, The Container Store opens its 68th location in the US. What's next? Are you focused on expansion?
KT: We like to expand, but I've always been the anchor. The way you know you're expanding too fast is when your store managers suck, because you can't keep up with HR needs. We have such interest in Europe and Japan, but I don't think you can go open a store in London before you have all the cities in the US first.
We do think we can have 300 locations in the US without changing our format or footprint. We're growing at a little over 12% square footage a year. Everybody's worried about brick and mortar, but we're doing better than ever.

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