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United Airlines Acted Badly-Make Sure You Don't

  • Broadcast in Management
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United Airlines scolded a 12 and 9 year old this week after texting their mother to tell her the plane had engine trouble and they were all alone with no one to pick them up. As if that wasn't bad enought, the cusomter service people didn't know a thing about the troubled engine when the boys mother called to find out what was going on! Listen to today's episode and find out if your company is guilty of the same horrible management, and what you can do about it if you are.


0:14 Steve Blue

Good morning America's CEOs and welcome to America's Super CEO Show. I'm your host Steve Blue and I am America's Super CEO. Today, we are going to talk about one of my favorite subjects, boneheads in general, and in specific bonehead airlines. Okay, I know it's probably an oxymoron. Airline and bonehead are sort of -- they sort of go together, but how about that United flight this last week and was going to Boston, I think from Houston to Boston. These guys take off and they got engine trouble so the pilot gets on the intercom and says "Well, we're going to turn around because we got engine trouble." So then they turn around and they land and they got two kids on the plane that I don't know -- hold on a minute I'll tell you here. I think they were like 9 and 10 years old. Oh excuse me, it was a 12 and a 9-year-old. So this plane lands and the 12 and the 9-year-old were on the plane all by themselves. Their parents were not able to be with them, they're kind of scared. So they text their mother to tell her that, you know, the plane had engine trouble but it was okay, in case you know they saw it in the news and so what should we do now? Who is going to pick us up, because no one expected us to return to Houston? Everyone expect us to end up in Dallas. So anyway, mom got the text and called the airline and tried to find out what's going on. The airline said pretty much "Well, there is nothing going on." Yeah, so customer service told the mother "There is nothing wrong, the plane is on its route to Boston." When as a matter of fact, it had already returned and landed in Houston due to engine problems. Now, how lame is that? What kind of customer service is that? Let me ask you this, is your company -- does your company have that kind of customer service where you have no earth way idea what's going on? Now, okay.

1:56 Steve Blue

We all know, you know the airlines when they are late, the gate agent and the information at the gate will post that they're on time and we know that they are horrible of that, but come on. This was the plane that had an engine malfunction and had to return and the customer service people still think the darn thing is in the air. I mean somebody have to get fired for that. Well, it gets worse. Now first of all, you have to remember that the parents paid extra for unattended minors, so they are supposed to be watching after these kids and taking care of them. Well what happened was the kids got scolded by the airline after they got off the plane for texting their parents, scolded for texting their parents that the airline had an engine malfunction and they were stranded and all alone a 12 and 9 years old in a city without any help. And they were scolded for that by the airline, now that is as bonehead as anything I have ever seen. But you know, it's just unfortunate that you expect that out of the airlines. I mean you expect bad service out of the airlines, you expect poor treatment out of the airlines, you expect poor to non-existing customer service out of the airlines and that's just -- it's a shame but that's what you expect. So nobody is surprised when that happens. But let's take a look at this. Let's examine this more closely, this United flight and see how it may relate to your business. Now first of all, you got to figure that the operations knew that plane was coming back to the gate. A plane just doesn't turn around on its own. It's in a controlled space on the field. They have to get tower permission and ground control permission and all that. So United operations knew that the plane was coming back, they'd have to ready a gate for them, get a gate agent and so forth, so that was all known. But the person that the mother talked to, the United customer service person that the mother talked to didn't know a darn thing about it, because well, she wasn't told. I mean, you have to ask the question why wasn't she told.

3:57 Steve Blue

I will tell you why, because this is -- first of all, airlines are very badly managed and that's just the backdrop that you have to start with, they are badly managed. One part of the organization doesn't talk to another. I mean, how many times have you been at a gate that you are like 10 minutes before flight time and the gate agent is still telling you that the flight is going to get off on time and the computer system and you know the things behind them with the little sign says it's going to get off on time. You know darn well it's not less classic case of systems now talking to each other and one part of the organization not talking to another part. So obviously, United operations feel absolutely no need to tell customer service anything that's going on, otherwise that would be a real-time thing or maybe the legal beagle said "No, don't say a word for god's sake in case somebody has a heart attack because they are scared that the engine went out or some darn thing and we'll get sued." Who knows? All kinds of stupid reasons would exist to explain why one part of the United Organization wasn't talking to another. Well, if you take this lesson back to your own business, let's hope you are not running your business as bad as an airline does because you won't stay in business for long if you are. Airlines can get away with it because they have very little competition and lots of government support and because of that, the airlines fundamentally don't look at their customers as customers, they look at them as cattle. And cattle don't need to be told what's going on, cattle don't need any customer service, cattle don't need any kind of attention, cattle don't need anything. Get the cattle on the plane and get the cattle off the plane, that's basically how they view it. Now of course they don't talk like that. They talk a good game about how -- you know, improving our seats so that they are more comfortable and you know give you the best care in the air and our food is going to get better, and we got celebrity chefs and all that stuff. But they don't mean any of it.

5:57 Steve Blue

All they want to do is get the cattle on the plane, get the cattle off the plane with a minimal amount of time and disruption and expense and that's just the way that it is. But if we take this back to your business, let's see what kind of lessons we can learn assuming that you are not in the airline business. If you are in the airline business, I hope you are listening to this and you do something about the horrible way you guys run your businesses and treat your customers. But assuming you are not in the airline business, let's take a look at how this lesson can apply to you. Now, first of all, you have systems that don't talk to each other. Let me ask you this, is it possible that you have one part of your system that says an order has shipped and yet the other part of the system doesn't tell the customer service people that the order was shipped. But assuming you've got an order that did not ship and you don't have an automated way to tell your customers that it's not going to. You should but let's assume that you don't for the moment. Your operations or your manufacturing people might feel no need to tell your customer service people that there is an issue there because they just don't feel any need to tell them. A lot of times, manufacturing people don't really give a hoot about the customer and so they don't warn an alert to the customer service people that there is going to be a manufacturing issue. They either just don't think of it because it's not on their radar screen and it's not part of the world they live in or they don't really care, either one of the two. And that's kind of what happens with the United, I think the operations people really don't care what the customer service people's problem is. They don't care what customer issues are. They care about getting the equipments from A to B and they probably are incentivized for that. They're probably rewarded and recognized for that. That's where they go wrong. Your manufacturing people, as an example, need to me incentivized and need to be recognized and rewarded for caring about the customer, not caring about getting the widget out, but caring about the customer and if you care about the customer, of course they're going to care about getting the widget out.

8:02 Steve Blue

But often times, and in fact I have to say most times in most organizations, different departments are recognized and rewarded -- rewarded, managed and controlled based on different criteria and they all can put with each other the quality, guys compensate it and recognize and reward, make sure that nothing that does not have the perfect quality gets out the backdoor. The manufacturing guy could really give a hoot in many organizations about the quality. He will get by with the minimum amount of quality, but what he gets incentivized by, what he gets recognized and rewarded and managed by is to get that widget out the door before the end of the month. And it is amazing as you probably know how quality drops on the 29th and the 30th of the month compared to the 2nd of the month. The criteria all changes. So the manufacturing guy's job is get the widget out at the end of the month and minimum quality, the quality guy's job is to have -- he could care less about when it goes out or how many of it goes out. He just wants to make sure that it is perfect when it does go out. The customer service people of course are on the front line and they're incentivized and cared about, taking care of the customer but they're probably unconcerned in the sense about what quality is as long as the customer is happy. Now, when you look at the engineering people of course you know, I don't know what they care about, but these parts of the organization care about different things and that's where most organizations go wrong. That's the lesson that you can learn from this United flight. Besides, of course, the lesson of how exactly not to treat people in a people business and in a service business, but the different parts of the organization if they're compensated, recognized and reward differently. You're going to care about different things and you know that's not their fault, that's your fault. If you're the CEO and you've allowed a system to be developed that compensates people for different goals and objectives, then it's your fault that the organization is the way that it is because organizations behave the way they do based on two things.

10:06 Steve Blue

One, the culture and two the compensation system, that's it. There is no special secret sauce, magic, I wonder what that's all about mystery to why an organization behaves the way it does, it does go to the culture and compensation. As a CEO, you control both of those. So if you don't like the way your company is behaving, your organization is behaving, that's the place that you start. We're not going to get into a lot of debt and math today because we just don't have time. But that is first place you want to look for clues if you're not happy with the way your company is performing and of course, at the end of the day, this turns up as profit or lack thereof because when you have parts of the organization that don't talk to each other, when you have organization parts that have different goals, at the end of the day, you bet that hurts the customer and that hurts your sales, that hurts your performance in the business, it just does. Now, you may not see that everyday because you're not in the front line everyday, but it is happening everyday and everyday when you have different goals and different parts to your organization, then they're not a finely tuned well-oiled machine all moving in the same direction, all flying in the same formation, you're losing customers every single day. You just don't know it, because -- you know, don't ever forget that your customers generally feel no need to tell you if they're going to make a switch and they feel no need to tell you if they're sort of, you know, on the fringe or brink of dissatisfaction and are considering trying a competitor. They're probably not going to tell you about that and unless it's a really big customer, okay that's a really big customer like 30% of your business and they stopped buying from you. You're going to pick that up right away, but that's generally not what kills businesses. What kills businesses is the ones you choose either smaller customers and sort of a leakage overtime.

12:00 Steve Blue

Let's assume that you lose a percent and a half of your customers every year. Now, how long is it going to take you before you're out of business? Well, I don't know, 10 or 15 years I don't know it depends on, you know, how big the business is and what the percent, the amounts and so forth but that my point is when you start leaking and losing customers because of this organization anomalies and inefficiencies that you have, you will never even know you have a serious problem until you have a serious problem that can't be fixed. Now, if you're about to lose one customer and you can save that one customer that's absolutely terrific, but if you lose one today and had another one tomorrow, another one a week from today, another one two weeks from today and they just sort of go onesie-twosie, you don't notice you're bleeding to debt slowly and you will never know up until it becomes a life-threatening business condition that jeopardizes and trends your entire business. Then it's probably too late to do anything about it so you need to really take a look at your organization right now, scrub it up. Find out if you're as guilty as United Airlines is in having parts of the organization that don't talk to each other because they have different goals. And by the way speaking of the United Airlines, I mean they're an incredibly inefficient badly run business. The week before this incident with the 12 and the 9-year-old, they lost the girl. You know how they have this program where you can pay them to make sure that your minor gets from one fight to the next and sort of watch over them and make sure everything is okay. Well the parents paid a lot of money and they lost this girl, she missed the connection and they -- she was like missing for an hour. Nobody knew where she was. United didn't know where she was. Her parents didn't know where she was. Nobody knew where she was and, so well, finally United found her well, good for them and -- but when she did get to her connecting flight and did get to her final destination, they lost her luggage.

14:00 Steve Blue

Now isn't that so much like an airline? Now, if you try to bring that back to your businesses like you know do you lose shipments? Do you lose processes, the other periods and your process from the beginning of your product or service to the delivery of your product that are serviced to your customer -- that you don't know where it is or it's not where it's supposed to be. It could be. I bet sometimes that does happen to you. Like what I was saying earlier, you know that's okay if that happens once in a while but if that happens more than once, your customer is going to go "Hmm, I'm just kind of wondering if I should maybe try the competition" because here's the dirty little secret you don't -- there are companies out there that are as good as yours and there are companies out there that are better than yours, but here's the secret, don't let your customers find out. Don't ever give them a reason to just sit back one day and go "Hmm". Now everybody knows if you'll really, really make your customer mad by really screwing something up really badly. Everyone knows you're going to lose them and that's pretty apparent and you can see it, but it's when they're just sort of thinking, I'm just a little dissatisfied, I'm not mad, I'm not angry, I'm not ready to make a switch but I am kind of thinking about maybe doing something different. That's the beginning and the end for you, so don't ever let your customer get to that position. It's kind of like the show, Are You Smarter Than a 5th grader. Let me ask you this, are you smarter than United Airlines? I'll bet you are. Well, that's all for today and thanks for tuning in and we'll see you next week. It's Saturday morning at 9 o'clock on the America's Super CEO show and don't forget you are a super CEO.