In a world that is going through economic and political turmoil fuelled by inconsistent decisions coming from US President Donald Trump, we in the business world have no option but to hone our skill in mastering the art of Crisis Management so that we will not fall into the trap that ensnared United Airlines and similarly, in the Sri Lanka context, occurred in Meethotamulla.
Let’s accept it, as long as humans manage organisations and run governments there will be mistakes and hence the skill of Crisis Management will be a key competency that will be in demand. The organisations that master this will be better placed to manage the image of the organisations and those who take this task for granted will face the consequences like what we saw in the last two weeks globally and in Sri Lanka.
United Airlines lost $ 1.4 billion with just two days of neglect while Sri Lanka was featured in every key news telecast, denting the brand imagery which is currently estimated to be worth $ 81 billion as per the Nation Brand Index. The Meethotamulla issue hit all global media and showed the power of social media.
United Airlines - trap of procedure
The reality is that if one buys an airline ticket, as per the US transportation policy, the airline has the right to ask a passenger to give up his seat. This is termed ‘Involuntary Bumping’. Technically speaking it does not require any justification and it has not been challenged until Dr. David Dao did so in UA flight 3411.
It is strange that a US consumer has never made it an issue given that the country practises fundamental rights to the extreme, which includes challenging a presidential order on the travel ban on the UN charter principle - the right to travel. Where United Airlines failed on ‘leadership’ was that they fell into the trap of ‘following procedures’ when there was a clear violation by the staff which needed to be corrected.
It is strange that when the world was creating an uproar over how Dr. Dao was dragged out of his assigned seat by the ground staff, leaving him bleeding from his nose and upper lip and traumatising the passengers who became instant journalists to the world, the response from the management of United Airlines was “we stand by the staff and followed procedure”, especially since the airline is based in a country where the ethos ‘customer is king’ is actually practised and not just paid lip service. Due to this inaction, today the company is being sued by Dr. Dao and could potentially be sued by all the passengers, leaving aside the $ 1.4 billion which was wiped out of the $ 21 billion market cap of the company.
The ethos of today’s world is bringing credibility to the ‘Employer brand’. Research reveals that the fundamentals to earning this credibility in a company is how the external customer places confidence and how the leadership team gives politics direction to one’s staff, which will add to the onion ring of the employer brand.
Dr. Dao will be mentioned at the best business universities globally as an example of how a single customer was able to garner community support only through the power of social media, which moved not only the leadership of United Airlines but also the entire industry as it hit all mainline news channels from CNN and BBC to NDTV, crossing geographical boundaries within a period of just 30 minutes. It is a case study for the world.
UA 3411 revealed to the world that that age-old habit of handling a crisis needs refinement given the beast of social media lifting its ugly head challenging the very essence of the employer brand.
Let’s accept it, the leadership team failed to address the issue in a timely manner and the company was weak on how to manage the reputation, legal issues and internal staff procedures.
By the way, this can happen to any company and each can take a cue from the case in point. It can be how we handle neighbourhood agitation when building an apartment project to handling a simple disciplinary case internally. If not properly managed, the dent on the employer brand can be severe.
UA - What went wrong?
While the incident went viral, the company followed the accepted procedures of PR management of standing by the employees who handled the issue and releasing the customary press release which aggravated the issue at hand rather than actually addressing the problem.
The result was that it moved different sections of the public within the ecosystem that resulted in the company being humiliated by competitor Airlines lite ‘QATAR’, which tweeted, “We don’t drag and drop. We unite you with the destination.”
The market moved down $ 1.4 billion within just 24 hours. The Department of Aviation, after having been privy to videos of the passenger holding on to the curtain while been dragged out of the seat, bleeding from his nose, summoned United Airlines staff and security personnel to commence formal investigations. Dr. Dao’s attorneys staged a media briefing announcing that evidence will be retained at the airport and the airline for future action, which indicates that the legal route will be followed to sue the airline on stipulated procedure. Against this backdrop, the CEO of United Airlines held the position that due process was being followed.
Advice from Aamazon CEO
The only advice that was issued by corporate America was from Jeff Bezos, who owns a $ 430 billion empire. He said: “We as leaders must continuously challenge the status quo rather than succumbing to accept complacency in our organisations.”
He went on to say that if this was not done an organisation will face excruciating pain and finally social fallout that will finally lead to the death of the company. Bezos emphasised: “Process becomes proxy for the result you want. Following process blindly when leaders can see that there is an issue is lunacy.”
This is a very interesting analogy for organisations that we run to. United Airlines fell into this trap and now they are searching for answers that will hurt the bottom line severely, which could have been avoided.
One of the key insights on successful PR management is being timely. By the time UA CEO Oscar Munoz announced the way forward, the media had taken the shine off the brand. He finally announced: “I was ashamed when I saw the video of how the passenger was treated just to give space to one of our own staff who wanted to fly on the same flight.”
It was only after the public outcry that Munoz apologised to the Kentucky physician and unconfirmed reports reveal that backdoor discussions have begun to arrive at a win-win situation with Dr. Dao which will sure cost the company a sizable sum. I guess time will reveal the reality that the world is watching eagerly.
SL: Meethotamulla issue
While Sri Lanka celebrated its New Year, the people of Meethotamulla were in shock with almost 32 people dead and many missing while the displaced have been housed in schools around the area.
Once again, similar to the United Airlines incident, during the first few days the response from the authorities was mixed in nature whilst there was no one taking responsibility with many levelling accusations on who should take the blame.
Separately, the Government’s actions to address the issue were not getting communicated to the people who suffered the calamity while there were many spokespersons giving their own personal views rather than Government policy. Once again the ugly head of social media was at its best whilst the traditional media competed with each other to increase the share of viewership for their TV channel. The Opposition used the issue to highlight weaknesses in leadership, which did not augur well for the country.
Almost all global media stations shared the story worldwide and messages of condolences came into the country from different governments but the dent on brand Sri Lanka, which is worth almost $ 81 billion, is yet to be seen. This was once again a classic case in point of PR going wrong. In other words it was bad management of crisis issues.
Sri Lanka is an exception on this front as we keep moving in and out of crises on a continuous basis. The next issue for brand Sri Lanka to manage will be the petroleum strike and globally may be the flu outbreak which includes H1N1, influenza A and B, not forgetting the epidemic proposition through dengue.
If we go back to the basics of effective Crisis Management the best practice included the following;
1) Identify the sections of the public affected by the issue
2) Gather the facts in the crisis and map out the impact for each of these public segments
3) Take responsibility and apologise to the people affected
4) Appoint a spokesperson for all communication
5) Understand that traditional media does not work today. Get a social media specialist on board.
6) Communicate the solution internally so that you build a community which believes in the solution.
7) Use opinion leaders to influence the public. An opinion needs to be formed
8) Deliver on the promised plan
9) Evaluate the perceptions of people on an ongoing basis
10) Document and train the staff for future ‹best practices›
(The author is a practising brand marketer and has over 20 years’ experience in the private and public sector, including within the international public sector at the United Nations).