BIG DATA TO BIG PROFITS

United Airline’s recent fiasco continues to spiral out of control. The dragging of a fare-paying doctor from the flight was recorded by many other passengers. The reaction of United Airlines and the impact of social media on this crisis show that United and its CEO, Oscar Munoz, failed to recognize the dangers of the situation and the appropriate steps needed for recovery. These are core leadership requirements.

 

1. Vulnerable Classes Deserve Special Protection: In all societies, there is a reverence for the elderly, children, women who are pregnant, the handicapped, and others in need of assistance. Mr. Munoz failed to recognize that once injured, bloodied, and screaming, the passenger was identified as a vulnerable class. In Mr. Munoz’s first public reaction to the incident, he did not even show concern for the man’s well-being or recovery. That is a failure. Showing sympathy and empathy for a vulnerable person, especially one (possibly) but clearly impacted by your organization’s actions is a requirement of a leader. Oscar should have showed concern for the passenger’s health and well-being.

Leadership Lesson: Always show concern for those that society deems in need of protection. The value of leadership is that that is offers protection for those that follow. It works in all organizations.

2. Words Matter: It took Oscar three tries to apologize. First, it was a statement about concern for “re-accommodating customers,” then a statement that the passenger was “belligerent.” All of these statements were self-inflicted gaffes. People expect to hear, “I’m sorry,” “It is unacceptable,” and “We will change,” when it needs to be said.

Leadership Lesson: Express your concern, grief, apology, and outrage when something goes wrong. Customers and employees want confirmation that you care. If you don’t care now, will you care in the future? Don’t let the attorneys scare you from apologizing. It is easier to say, “I am sorry” than to explain why you hurt a customer and appeared insensitive.

3. Customers Matter: In many business programs, we hear, “treat the employee right and the customer will be well served.” In general, I accept that. However, it does not mean that a firm must accept the errors of its employees. In Oscar’s first communication about this case, he clearly was trying to show support of his employees. Nice try. However, there are many more customers than employees, and the video shows a damaging outcome. A mistake was made. Call it out. Coaches support players and point out mistakes all the time.

Leadership Lesson: Customers are why we earn, work, prosper, and serve. No leader is without a customer. Those who support and trust your business matter the most.

4. Employees Matter, Too: Indeed, Oscar had to address this with his employees. He should have been clear. The outcome was unacceptable. If it was because of bad decisions, bad rules, or bad luck, it should be clear that excellence in customer care is a priority to United Airlines. Employees are trusted to provided excellent service, care, and advice to customers. It did not happen at United.

Leadership Lesson: Employees require support but also direction. Negatively impacting customers, the firm’s brand, and making bad decisions cannot be tolerated in the name of solidarity with employees. Leaders keep their team focused on the goal. For a firm, it is to succeed with the customer.

5. The Means Does Not Justify the End: In philosophy, life, government, and business, we are often faced with legal, moral, and ethical dilemmas about how versus the goal. Can I justify an unsavory means to achieve a better end? However, how you do things is as important as what you accomplish. Leaders are responsible for that. Getting a passenger off the plane was United’s goal. It was done poorly. The means does not justify the end, not in business and not in life.

Leadership Lesson: Leaders chart paths. The path is as important as the destination. How we get there is as important as where we are going. Beware of the leader that does not value the means to an end. Ethics matter – a lot.

6. Numbers Matter: United reports 143 million paying customers in 2016. That is about 40% of the US. The video of the Chicago Aviation Police removing the passenger has been seen 190 million times (as of April 12). That is about 50 million more times than the people who flew United all of last year. Over 100 million video viewings are reported in China, alone. United lost over $1 billion in market capitalization in two days.

Leadership Lesson: Measure your impact! 190 million disgusted customers and potential customers is great for your competitor. Losing the confidence of customers and shareholders is always bad.

What United has done, it did to itself. It is, as we say in sports, an unforced error. It is self-inflicted. No competitor or government (okay maybe the brutes of the Chicago Blue) did that. Leaders prevent unforced errors.

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By Russell Walker, Ph.D.  -      
Russell Walker helps companies develop strategies to manage risk and harness value through analytics and big data. He has done novel research in data monetization and digital disruption and advises leading firms on these topics. As Director of Experiential Learning in Analytics and Associate Teaching Professor of Marketing and International Business at the Foster School of Business, at the University of Washington, Dr. Walker is an academic thought-leader on analytics. Russell Walker has developed and taught leading executive programs on Big Data and Analytics, Strategic Data-Driven Marketing, Enterprise Risk, Operational Risk, and Global Leadership. Previous to moving to Seattle and the Foster School, Dr. Walker was Clinical Professor at the Kellogg School of Management of Northwestern University, where he founded and taught many popular courses in analytics and risk management. His is the author of the book From Big Data to Big Profits: Success with Data and Analytics (Oxford University Press, 2015) which examines data monetization strategies and the development of data-centric business models in the new digital economy. He is also the author of the award-winning text Winning with Risk Management (World Scientific Publishing, 2013), which examines the principles and practice of risk management as a competitive advantage. Dr. Walker consults with firms on the topics of Big Data and Analytics, Data Monetization, Risk Management, and Business Strategy. Russell Walker can be reached at: russell@walkerbernardo.com @RussWalker1776 russellwalkerphd.com

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