Picture this: It's 9 a.m. on March 23, 1992. The stands of a decaying Dallas sports arena are packed with pom pom-shaking middle managers and cheering sales reps. Over the theme song to Rocky, a gravelly voiced emcee wearing a Don King-inspired toupee calls two men to the center ring: Kurt "Killer" Herwald, then-CEO of Stevens Aviation, and "Smokin'" Herb Kelleher, cofounder and then-CEO of Southwest Airlines.

Welcome to the Malice in Dallas event, an epic arm-wrestling match to determine the rightful owner of a marketing slogan used by both companies, but which Stevens had trademarked: "plane smart."

Although Herwald won the match, both companies came out ahead: The publicity stunt was covered by most national news organizations and elicited a congratulatory letter from then-President George H.W. Bush. Southwest reportedly earned $6 million in publicity benefits. Stevens enjoyed at least four years of 25 percent annual growth, thanks to wildly improved name recognition, Herwald tells The Build Network. He ultimately let Southwest continue to use the slogan.

In a recent post on LinkedIn, Wharton School professor Adam Grant used Malice in Dallas to illustrate a winning negotiation strategy. "By gaining a clear understanding of his counterpart's interests, [Herwald] was able to convert this gift [use of the slogan] into a win for Stevens as well as Southwest."

Herwald likes that idea. There's just one problem: It isn't true. "I didn't negotiate anything with anyone," asserts Herwald, now president of Commercial Foodservice Repair. "This is not a lesson in negotiation."

Malice in Dallas was, however, a crossroads in Herwald's career that forever changed his leadership style and his valuation of corporate culture. Two decades later, here are the Malice in Dallas lessons that he says stuck with him:

Lesson 1: Lighten up, buddy.
On event day, Herwald balked at the idea of wearing a red satin cape and learning some center-ring choreography. At 37 years old, he thought it would make him look unprofessional. The pro wrestler hired to prep Herwald was unsympathetic.

"He said, 'Look, you're in a ridiculous situation; the only way you win is if you show the world you're comfortable being in a ridiculous situation,'" Herwald recalls. "And he was right. As a young CEO, you worry a lot about impressions and image. But, really, people just want you to be yourself and show your vulnerability."

Lesson 2: The company that plays together . . . 
Stevens Aviation was a little-known aviation sales and maintenance company one day and a business-cult sensation the next. Stevens employees were thrust into the Southwest Airlines PR machine, and they came out smiling.

"They were so proud of the company and so excited for the visibility that Malice in Dallas gave to their work," Herwald says. For months and years after the event, the change to company culture was palpable. Employees felt more connected to one another and to their work.

"After that, we started having fundraisers with pie-eating contests and dunking booths with senior guys in business suits. They were charity events, but they were really designed to keep the employees feeling connected to the company."

Lesson 3: You can pick your friends.
Before inviting him to participate in Malice in Dallas, Herwald saw Kelleher as a role model. He was a big personality who "demanded that his employees perform at the highest levels, but do so while having fun and treating each other with respect."

So when Herwald discovered that the much larger Southwest had starting using a slogan almost identical to his own company's, legal action was not on his mind. Striking up a friendship was.

"You make a lot more money off your friends than you do off your enemies," Herwald says. "We made a friend in Southwest Airlines and, in doing so, we benefited from the very positive way they were perceived in the market."

Published on: Jul 22, 2013