Reputation Management and the Messages that Should Never Be Sent

In today’s world where every customer is a potential journalist with a video camera, organizations need to rethink how they respond to threats to their reputation.

Every organization faced with a crisis is going to be slow to respond.  According to one study, it takes 21 hours for the typical organization to respond to a crisis situation.  That’s many hours too long, especially when a citizen video can go viral in minutes.

United Airlines was reminded of this lesson the hard way when it faced a crisis resulting when the passenger on a flight from Chicago was “re-accommodated” by being dragged from his assigned and paid for seat, bloodied by security officers and booted off the airplane so that a United employee could be accommodated.

“Communicator of the Year”

The first communiqué about this episode, appears to be the email message, sent by CEO Oscar Munoz, who had been named Communicator of the Year by a public relations association, that blamed the passenger while lauding the conduct of the employees at the boarding gate and on the aircraft. The message was widely condemned as ham-handed, CYA and vintage blame the victim.  It predictably boomeranged, presumably inspiring Munoz to get more involved, which he did by unequivocally apologizing to everyone and calling for a top-down review of procedures that led to the fiasco.

It’s not clear whether Munoz actually saw the message sent out under his name prior to its dissemination to United employees.  Did Munoz coin the word “re-accommodate” in this context?  Given his past history, I would like to give him the benefit of the doubt. If he did read it, he should have anticipated the leak and reaction, and then not sent it, instead calling his management team together to think through a comprehensive and sensitive response to the growing crisis.

It’s likely that United has a significant communications capability, but there was little evidence that it was working in a coordinated way—from the way spokespersons were initially interacting with news organizations to the way the company responded on social media.

If management was feeling pressure to communicate with its employees, but had not yet arrived at a way to talk about the incident to the public, Munoz could have said: “This incident was very disturbing, does not reflect our values as a company, and we are investigating what happened.  As soon as more details are known, I will be back in touch with more information and the actions we will take.”

I’m sure Munoz wishes he could have recalled the email he sent.  It provided too much information on the sequence of events without examining the overbooking policy that caused the ruckus and how it was applied in this case.  It went overboard in assuaging the feelings of employees, while blaming the conduct of the passenger.  It backfired.  It was a message originating without benefit of how to thoughtfully and sensitively react when stuff hits the turbofan, and this from a company that made over a billion dollars last year.

Questions for the CEO

Where the communications function resides in an organization and how its communications experts are used by senior management can determine how effectively the organization protects its reputation—both within and outside.  In the United case, were the human resources and communications departments on the same page?  This is especially important if internal communications are handled by HR, which is typical in large organizations.  Did the external communications executive have direct access to the CEO so that even if the CEO nixes the counsel, at least there’s a good chance of avoiding a debacle?  Was there a process for drafting and approving  and coordinating internal and external communications? 

Was there a crisis management and communications plan in place to deal with this type of event? A crisis communication plan is designed to ensure an accurate flow of appropriate information during turbulent times.  This plan provides a process upon which a crisis management team can use its abilities to effectively deal with a potentially volatile situation.  It outlines the necessary steps that need to be followed so that the crisis team can manage the issues, communications, and media.

Needless to say, the best crisis management is crisis avoidance.  Crises need not be of the magnitude of a major disaster to cause serious financial, business or image problems for an organization.

As billionaire investor Warren Buffett said: “We can afford to lose money – even a lot of money. But we can’t afford to lose reputation – even a shred of reputation.”

Doug Barry

Conover & Gould Strategy Group

 

 

 

 

 

Good Customer Service Starts with Being Honest with Your Customers

Much has been written, photographed and shared about the passenger who was forcibly removed from an overbooked United Airlines flight.  There are many lessons from that ugly incident, among them the importance of businesses telling their customers the truth.

Airlines have overbooked for years, and many of us, myself included, have stood at airport gates in giddy anticipation of receiving a travel voucher.  Now we know that you can be removed from a flight at the discretion of the carrier.  It’s written thus on the contract of carriage printed in tiny characters on paper tickets that most of us no longer receive.  It’s almost if the company doesn’t want you to read or understand what they want you to agree to.

Overbooking is not the result of an airline being so popular because of their great food or customer service that more people want to fly with them than they have seats available.  It’s because they make more money when every seat is occupied.  So they deliberately accept payment for more seats than are available on each flight.  They do this because they want to make a profit in an industry that has for many years not been profitable.  Why haven’t they made more money than they spend?

An airplane-sharing economy?

A big reason has been the price of jet fuel, though that has not been a factor for the last year and more as the price of oil is now less than half of what it was a couple of years ago.  A bigger reason is that airlines are a capital intensive industry.  Airplanes can cost hundreds of millions of dollars each—very different than, say, the car-sharing business where there are few if any capital costs that aren’t paid by self-employed drivers.  We are not likely to ever see pilots who own their 777’s, nor would we want to.

So what we have is a very expensive, high overhead business model that collides with the traveling public’s desire to enjoy low airfares.  If there was no deliberate overbooking as part of the business model, airlines would have to charge more for those tickets, blankets and bags.

The airlines have not been upfront about this aspect of the “bargain” they’ve struck with passengers. Instead, they’ve whittled away at the incentives offered to passengers with a seat to give theirs up to someone whom they collected the fare from, knowing they didn’t—and might not—have a seat for them.  The airlines knew, or believed, they held all the cards and could continue to put downward pressure on the cost to them of the voucher.  What they didn’t see coming is that the incredible shrinking voucher ceased to be an incentive, as it was on the ill-fated United flight.  In an effort (a laudable one as it turned out) to put things right, United upped and widely published its new maximum voucher value to an eye-watering $10,000.  The thrill has just returned to the overbooking sweepstakes.

Interestingly, I’ve never been surveyed by United or any other airline on the overbooking processes and procedures.  Yet I’ve answered questions on airplane boarding, flight attendant demeanor, baggage, and onboard snacking.  How could it be that such a potential flashpoint for customer dissatisfaction turned out to be a massive Achilles heel that prompted a full-page mea culpa in national newspapers, letters to passengers from United’s CEO; and don’t forget threatened boycotts from current and prospective passengers in China, calls to reregulate the industry, sinking stock value (since recovered) and many other embarrassing repercussions?

You might argue that even if the airlines were completely candid about overbooking, the result would have been the same because of rigid rules, poor training, lax customer service standards due in part to a decade of employee benefit cuts and mergers, an absence of individual employee discretion at the point of potential conflict, etc. 

This is a persuasive argument. But if candor and transparency had been overarching company values, both with the flying public and among its employees, chances are excellent that United would have anticipated what eventually happened, gamed the different scenarios, set policies accordingly and avoided this expensive fiasco.

Want to find and fix your organization's Achilles heels?  Contact us, today.

Doug Barry

Conover + Gould Strategy Group