Unfriendly Skies: why your company could be the next United Airlines
Business has a design problem called regulation
At this moment, more people in America admire Kim Jong Un’s haircut then are willing to defend United Airlines.
Wells Fargo. Then Uber. Now United Airlines flight 3411. Let’s fire the CEO, right?
As everyone with access to a cell phone now knows, the United Airlines fiasco should never have happened. So why did it? Were they so dumb?
I don’t think so, at least not that dumb.
In our haste to pin blame on the CEO, we fail to recognize mistakes are multi-factor and ignore the insidious influences baked into our culture. These include the role of a powerful government regulator and labor union bureaucracy that limit people’s ability to make sensible choices just at the time the airline urgently needed flexibility.
That’s why the typical pattern for American business is: do stupid stuff, rinse and repeat.
When people make mistakes as bizarre as the violent removal on UA flight 3411, you can be sure there is a backstory. It happened during the financial crisis, it happens with cyber hackings, with auto airbag failures, and it happens on board airplanes. But because the media has a perverse incentive to share the frenzy rather than analyze it, there is a rush to post the sensational and move onto the next bummer while leaving out that the important parts.
If you work in a regulated industry, you run a ‘government first’ culture, not a ‘customer first’ culture. This is fine as long as things are going right.
Some regulate businesses will claim, “not true, we love our customers. They drive our bottom line.” But the government and labor unions can put you out of business or out of a job faster than you can say AFL CIO. As Samuel Johnson would note, it concentrates the mind wonderfully.
If you make your living in construction, banking, healthcare, energy, defense, gambling, law enforcement or air transportation, in other words, anyone but techies and journalists, then you understand how government regulation, and just as ominously, labor regulation, can affect the culture and the day to day behavior of employees. This is done indirectly by labor unions exerting a disproportionate influence on legislation through campaign donations or more directly, through the Department of Labor, which often does their bidding.
I was a Union member
Most of my career has been spent blissfully unaware of regulation…as a publisher of Forbes Magazine, a venture capitalist, an internet CEO, and now a professor.
But my father was captain of an international airline flying across the Atlantic, and I worked for the airlines through college and was a member of the International Association of Machinists (job requirement). I did get some first-hand knowledge of government and labor regulations.
Every aspect of a flight and cabin crew’s life is measured, monitored, rated, reported, as well as stiffly penalized, for the smallest technical infractions, including the time it takes to join a flight in progress waiting for a fresh crew.
Where did you put my iPad?
Have you ever argued with a flight attendant about the iPad in your seat pocket? With a disdainful glance, they scoop it up and place it four rows back in the overhead bin? That’s because the government loves the overhead bin. According to the government, there has never been a case of loss of life due to a flying iPad, but why take a chance?
If you read or saw the story of Chesley Sullenberger, the intrepid pilot of US Airways flight 1549, after he landed in the Hudson River just of Manhattan and saved 155 lives, you know the FAA investigated him for taking undue risks (he was fortunately exonerated) by landing the engineless plane in the river.
In the airline business, a cabin crew (refers to flight attendants as contrasted to flight crew) may have been stuck on the ground for a variety of reasons including equipment or a crew member called in sick or was delayed by traffic on the way to the airport. By that time, certain members of the crew exceeded their union maximum flight hours (downtime is counted against them) and they must be replaced immediately before the flight is allowed to take off.
There are a hundred reasons why a change of crew happens. But there is only one measure of success, and that is the plane must continue its journey as scheduled. To fail at this one measure is to risk FAA penalties, ratings downgraded, and loss of business due to rebookings on other airlines. Jobs are threatened in those circumstances and employees naturally react with fear. When that occurs, they can do some really dumb things.
On-time or go home
By the way, the fact that matters is “on-time.” The regulations are silent on what happens if a crew member gets into an accident because of speeding to the airport to make the flight. Unlike a Domino’s Pizza driver, the government accepts no liability for the effects of regulation.
That is the substance of my comment. Everyone now knows including the CEO, the United Airlines fiasco should never have happened. But what is missing from the picture is that the absurd behavior of airline and law enforcement personnel would not have taken place without the insidious influence of regulations.
There did have alternatives.
As everyone is saying now, Oscar Munoz’ people could have offered a higher reward for passengers to leave the flight. They could have delayed the flight. This is looking backwards. The flexibility to make those decisions wasn’t in the picture at the time of crisis.
Companies have to exert some control over expenses. If $800 didn’t do it, maybe $1200 wouldn’t either and the problem would be the same. The ground crew doesn’t have the authority from the FAA to force flight delays within the ten minutes or so before takeoff for non-safety reasons, without severe penalties and probably a career ending move as well.
So what to smart and well meaning and customer caring staff do? They call law enforcement, principally because they are worried for themselves and they are scared of making a decision.
The 100-year storm in a regulated industry can happen every day.
The lesson isn’t just a stop and think situation. It is a stop and think about whether you are the captive of regulation and what you can do about it because even when the government is the boss, the customer is always right.
