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Sorry United. Your apologies just won't fly

The response from UA attracted $255 million loss in market cap. All this for the price of a solitary airline ticket

Sorry United. Your apologies just won't fly
Arun Krishnan

United Airlines (UA) has hogged most of recent the headlines for physically assaulting a customer. Beacause UA, as is the norm for most airlines in the US, had overbooked their flight, they had tried to offer inducements for four passengers to stay back and take a flight the next day. When one of them refused, they tried to remove him from the aircraft. A video showed security persons removing him physically, bloodying his nose in the process.

This called for crisis management responses to kick in where the organisation quickly deescalates the situation by offering an unconditional apology and then taking steps to mitigate the impact of the situation. A classic case taught in all B-schools is that of how Johnson and Johnson (J&J) reacted to a much more serious crisis. In 1982, Tylenol, the leading pain-killer medication faced a public onslaught when it was reported that seven people in Chicago were reported to have died after taking the medication. Investigations revealed that some unknown persons had tampered with the Tylenol packets after they had reached the stores by injecting cyanide into them, thereby leading to the deaths.

J&J's response was an absolute case study in how to respond to such situations. They immediately pulled all Tylenol packages from the shelves leading to a loss of nearly $100 million dollars. Furthermore, they halted all advertisement for the product. While J&J knew that they were not responsible for what happened, they assumed responsibility for the product, thereby gaining the trust of their customers, so much so that, within a short span of time, Tylenol was able to return to its numero uno position as the favored pain-killer medicine.

Contrast this to what United's top brass did.CEO Oscar Munoz issued a statement regretting that UA had to “re-accommodate” its passengers, without making any mention of the passenger who was injured when being dragged off the flight. He aggravated this error by penning a letter to his staff, pretty much exonerating them for what happened and blaming the passenger for the situation becoming “compounded when one of the passengers we politely asked to deplane refused and it became necessary to contact Chicago Aviation Security Officers to help”. The response from UA was universally panned, with the sharemarket responding negatively leading to a loss in market cap of nearly $255 million. All this for the price of a solitary airline ticket.

So what can organisations learn from this? When you are faced with a crisis that can severely impact your reputation, defuse the situation by taking responsibility even if the fault is not yours. Customers love organisations who do that. Do not, under any circumstances, brazen it out. Furthermore, apologies need to be seen as being heartfelt. Those like the one offered by UA couched in guarded “corporate-ese” simply won't fly.

The writer is founder and CEO of HR analytics start-up, nFactorial Analytical Sciences

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