“I won’t allow it!” Kurt Herwald, a 38-year old former weightlifter CEO of Stevens Aviation said emphatically.

“That is our slogan; you can’t just take it. Either call off your campaign or give us proper compensation. Otherwise, we’ll see you in court!” 

In 1992, Southwest Airlines ran into dispute with a small aviation service operation out of South Carolina over the use of a marketing tagline – Just Plane Smart. The Texan company has been ranked amongst the world’s Most Admired Company, owning to its exhilarating work culture and unmatched profits over its peers. While the above quotes of Herwald could have been true in a let’s-sue-everybody culture of Corporate America at the time, the CEO actually said he “didn’t believe in litigation. And besides, what’s the fun in that?”

So, when Stevens Aviation provided undisputable proofs that it had been using the slogan for years, instead of fleeing or fighting, Herb Kelleher – the colorful Chairman and CEO of Southwest— side stepped this landmark lawsuit with problem-solving skill of a first grader. “Let’s settle this like a man, shall we? I challenge you to an arm-wrestling match; winner takes the slogan” It was a litigation-free solution that the 61-year old leader accepted with spirit of a warrior.

The two companies then jointly hosted the ‘Malice in Dallas’ event at a famous pro-wrestling ring. Word got out and soon every employee on both sides knew about the big bet. They, along with faithful customers, were given a day off work to come and cheer for their respective CEO. It was a 4,500 crowd of ‘Company-Stopping Match’ on par with a Mayweather vs. Pacquiao bout.

Before the big day, Kelleher released footage of his secret training to demoralize the opponent. He did bicep curls with 2-liter Wild Turkey whiskey bottles, squatted with support from beautiful ladies, and performed sit-ups with cigarette in his mouth. Even Southwest employees shook their head and went to place their bet on Stevens’ Herwald, seeking to earn easy money.

This arm-wrestling match is one case study I often bring up when in session with executives. It is a prime example that shows how a culture is built. What Southwest wanted to have was a ‘Warrior Spirit’ – a place of work where people get things done and have fun doing it. There are no right or wrong solutions, and all ideas are welcome. Be intuitive. And what better way to demonstrate that culture than by having the CEOs solving a gigantic business dispute in an arm-wrestling dare?

Leadership Insights:

1. Use the mirror neurons. The brain is built to imitate. Mirror neurons are a set of cells that fire when we see someone else performing an action. Dr. Giacomo Rizzolatti, an Italian Neurophysiologist and professor at the University of Parma in Italy, and his team discovered this unique property of the brain while doing studies with macaque monkeys. When the monkeys saw researchers picked up a banana, their neuronal network associated with the same action – picking up a banana – also fired. So, a brain-friendly way to get your people to do what you expect of them is simply to do those actions yourself.
2. Do it genuinely. An interesting observation of mirror neurons is that they only respond to genuine acts. We only yawn when the person in front of us genuinely yawn, but we do not imitate if it is a ‘fake’ yawn. Researchers tested this by having participants observed a same action with different intents. 1) A person lifting the mug and drinking tea or 2) A person lifting the mug an ‘pretends’ to drink tea. Mirror neurons are only activated in the former case. So, a lesson for leaders is to be true to who you are. Do not manipulate people – the brain, and its years of evolution, can see right through it!
3. Character counts. Walking the talk only works if you do it often and do it genuinely. This means to create the desired culture you must hire the right people. In fact, a study published in hbr.org in 2015 showed that companies of leaders rated high on character generated 5x the growth of companies with leaders rated low on character. So, pay less attention to what’s on your people’s resume and more on what’s in their heart. Change your interviewing question from “What can you do?” to “What makes you happy, sad, or angry?”. The former tests their competencies while the latter tests their character and values.

One highly sought after job prospect of Southwest recounted his interview experience with Herb Kelleher. “I came into his room and Herb was sitting at his desk. He had removed his shoes and his feet were propped up on the table. I saw these big holes in his socks and I decided this was where I wanted to work”. It was through the CEO being true to who he was that helped build the warrior culture that became an insurmountable competitive advantage for Southwest.

As for the result of their arm-wrestling competition, Kurt Herwald, being some 30 years younger, soundly beat ‘Smoking Herb’ the CEO of Southwest Airlines. The beaten executive had to donate a total of 15,000 USD to charity while the winner was to have gained the rights of the slogan. But amidst the excitement and firing mirror neurons of the crowd, something else happened.

“Listen up everyone!” Declared Herwald, smiling ear to ear. “I have much respect for Mr. Kelleher for honoring our small airline with this event. I think we are both winners today. As such, we’ve decided to let Southwest continue the use of our slogan. Let’s grow together!” The announcement brought endless rounds of cheers from employees of both companies, and raised the already electrifying atmosphere to another level.

For those who want to experience this landmark day on 20 March 1992, you may find a YouTube link of the event reported by NBC https://www.youtube.com/watch?v=ewVUKp2r4aw.

Needless to say that this was a graceful end to a dispute. It saved massive costs for both companies on litigation fees and the time they would have spent in court. But perhaps the most invaluable gain was the hearts of employees captivated at the event. They now realized what it meant to be living a true culture of Southwest Airlines’ ‘Warrior Spirit’.

Just Plane Smart, indeed.