United Airlines – The Shocking Back Story
This past year, United Airlines was perhaps this years biggest demonstration in how a disengaged employee culture can impact consumers. Almost all of us witnessed security guards dragging a semi-conscious passenger off of his flight. While the guards were not employees of the airline, the UA employees took a minor service problem and escalated it by simply not thinking through the implications of their actions – a classic example of disengagement. The incident made world news, destroyed shareholder value, and affirmed the bad experiences so many of us have had with this carrier.
United Airlines is a case study of all that can go wrong when an employee culture is one of disengagement. One UA pilot told me of watching a disabled passenger without legs drag himself through the snow to make his next flight at O’Hare Airport. The pilot immediatley called dispatch. No one listened to the severity of the problem. UA isn’t alone, the trance of employee disengagement impacts all of us every single day.
Current airline industry practice allows customers to get “bumped” to accommodate employee needs. While this could be a good time to question the profit benefits of this behavior, here is how an engaged team would have handled the situation: The gate agent would have known of the staffing need in advance. The four most recently booked passengers would have never made it onto the plane. That agent would have been given the responsibility to do anything to make those four customers as OK as possible. However, when we alienate employees, make them feel expendable, demonstrate a lack of empathy, how could we possibly have alert, engaged and enthused employees?
In my new book The Workplace Engagement Solution (Career Press), United Airlines is featured as an organizational culture destroyed by one of the most disengaged CEOs to ever get the reigns to a major company.
In 2015, a sizeable group of past and current United Airlines employees signed a petition filed by change.org demanding the resignation of United Airlines CEO Jeff Smisek. It called Smisek out for cutting costs at the expense of services and taking steps that damage retirees – all actions the group claims to be contrary to Smisek’s sworn testimony before Congress when he said the 2010 merger between Continental and United would have no “significant” effect on employment on frontline jobs.
At a previous United Airlines Investor Day Conference, Smisek made a rather jaw-dropping statement:
“I think you’ll like the changes you see, as we aim to not fall in the last place.”
At the time, United’s customer service satisfaction ratings were in the mid-twenty percentile. He posted a new target in the employee cafeterias that he wanted everyone to aspire to hit 31%. Many asked if he was actually suggesting this was the new customer service rating target to which he responded the number represented a “complex metric.”
When Mr. Smisek took over merged United and Continental airlines, he slashed pensions, incentives, expenses and dismembered one of the better cultures in the industry. He cut costs to such a degree that planes have had to make unscheduled stops to pick up toilet paper. Staff members coined a phrase, “this airline is all Jeff’d up.”
In a little more than three years, Smisek’s disregard for employees directly led to the lowest customer satisfaction in the industry. The company is a case study of what happens when the tough gets going and the organization develops a disregard for workers and a fixation on the numbers.
If you are an airline traveler, here are a few examples you might not be aware of:
- Unhappy flight attendants routinely ask the pilots to turn up the heat in the cabin. Why? If passengers are knocked out they have less work passing out peanuts and drinks. The next time you think you are coming down with the flu, ask them to turn down the heat.
- Pilots have lost virtually every financial incentive to do their best. Now, many purposely slow down flights to get bumped into overtime. If they make a plane a half-hour late that equals about $70.00. If 200 passengers are on board and their average income is $30/hour the collective loss is $3,000. The most cynical pilots have figured out how to time a flight so that it arrives as late as possible without getting cited.
The treatment of employees at United Airlines is an especially sad example of how a single-minded fixation on shareholder value damages the overall brand of an organization. As Gallup has indicated, only 13% of the world’s workers are engaged. United’s example makes a good case that business leaders are not immune to the great disengagement.
Employee engagement hits all of us virtually every day.
We can only hope the future of United’s customer experience will improve. Last year, Jeff Smisek abruptly resigned after becoming embroiled in an antitrust scandal involving the Port Authority of New Jersey. It appears that Jeff had arranged a low load money-losing flight between Newark and Columbia, South Carolina near the PA Chairman’s weekend home.
Time and time again, we find that CEOs make dreadful decisions that since they run a commodity it is a good idea to treat their own people as a commodity. But the results are terrible for customers and shareholders alike. We will forgive them for taking away our peanuts and charging for drinks but when employees start to treat customers badly, it is all over.
The costs of these shortcuts are always bigger in the long run. In the last few years, Time Warner Cable and Charter Communications routinely made “America’s Most Hated Companys Lists.” For some, just the mention of their name inspires curses. The ill-will became so strong they have merged and now represent themselves as Spectrum, “America’s fastest growing Cable and Internet provider.” Yes, they are the fastest growing because they merged and made a business decision to hide their old names.
In the years ahead, companies that compete with narrow profit margins have one asset they must rely upon and elevate to full partnership in their success:
The employer brand is now more important than the consumer brand. The quality of talent we attract and retain determines the quality of the consumer experience. Time and time again, the top performing organizations in any category have one thing in common. Attract, retaining, training and inspired talent is central to the brand. United Airlines would do well to reinvent their entire strategy towards talent and build a workforce that cares, that loves the customer, that grows, and that has empathy because they have been given empathy.
Brought to you by David Harder, President – Inspired Work Services, Inc.
(C) Copyright, 2017, Inspired Work, Inc. – (All Rights Reserved)
If you would like to discuss your workplace or your career with David Harder, schedule fifteen-minutes Here.