True test of leadership in murder and mayhem

1240 reads

We have all read about the publicity nightmare United Airlines went through in April 2017. What can we learn from it on decision-making in a crisis?

United in crisis
On April 9, at the request of United’s manager, security officials forcibly removed a passenger from an overbooked flight in Chicago airport. Videos of the bleeding passenger being dragged out went viral leading to widespread condemnation of the Airline. In the following weeks United lost a billion dollars in market capitalisation, and cost Oscar Munoz the CEO, the future position of Chairman, among other fallouts.

The ghastly incident on United Express 3411 was aggravated by insensitive manner in which Munoz dealt with the episode. His letter to employees defending their action - it went public – did not even acknowledge the indignity and injury his Company inflicted on the fare paying passenger. In “re-accommodating” (a new word for being dragged out bleeding!) the victim, his employees and he adhered to rules and procedure rather than values. He admitted as much in a belated apology and out-of-court settlement with the victim.

Rules for crises?
Crises may emanate from an error of judgement, not fixing a fault soon enough, unforeseeable external events, or a bewildering variety of causes. That is why they are unpredictable. One can never write rules for every failure or critical incident. That is why it is necessary to provide employees and leaders principles they must uphold when all else is inadequate.  

Ostrich syndrome can be costly
Burying one’s head in sand may be a comfortable but costly option. Firestone delayed accepting responsibility for tires that caused SUV roll-over accidents in 2000. Johnson & Johnson paid $158 million to the state of Texas for complaints of wrong marketing of Risperadol, an antipsychotic drug. In 1994 Intel took unduly long to fix calculation errors in the Pentium chip.

How can senior managers and leaders make better decisions in crises? It is necessary to first recognise that crises present opportunities even though it is hard to see them that way at the time.

J&J and the Tylenol murders
In 1982, Johnson and Johnson experienced a crisis no one could have imagined or prepared for. Seven people died of cynide poisoning in Chicago after consuming Tylenol. One of J&J’s flagship products, Tylenol commanded 35% share of of the analgesic market when it happened. Share dropped to 7% following the deaths. How James Burke, then CEO, handled the situation is a valuable lesson for CEOs and business leaders.

Leadership in a cisis
Burke persuaded the J&J Board to allow him to spend $100 million to withdraw 31 million bottles when even the FBI and FDA felt it was not necessary. In a subsequent interview to Wharton School Publishing, he said how he simply followed Company values: responsibility to customers, to employees, the society, and shareholders, in that order.

The crisis was the hottest topic on every news channel for weeks. Unlike Nestle in India during the Maggi crisis, Burke proactively kept each news channel informed. J&J quickly relaunched Tylenol in tamper-proof packaging. By mid-1983 the brand had recovered to its pre-crisis share and leadership.

Opportunity?
No organisation performs flawlessly every time. How it treats customers, deals with them in product or service failures determines if they will become fans or critics. Customers do not become advocates from everyday satisfactory experiences. Magic happens when you surprise them with your generosity, care, and respect. It does not have to be a crisis; it can be a failure to live up to the brand promise – product quality, an underdone dish, or website malfunction. But yes, it is absolutely critical in a crisis.

A sign of great leadership is when values are held dear and practised because they reflect who you are and what you stand for. In a crisis.

 

Trending

824
Harvey Mackay's picture

Develop high performance habits

Are you performing up to your potential?  Are you afraid to jump to the next level?  Are your habits pushing you forward or holding you back?The most important book on self-motivation and achieving more than you imagined hit the bookstores
792
Harvey Mackay's picture

Your business depends on your personal touch

Mamie Adams always enjoyed going to a branch post office in her town because the postal employees there were friendly.  She went there to buy stamps just before the holidays one year and the lines were particularly long.  Someone pointed
712
vnbhattacharya's picture

What will you do in this difficult situation?

Instead of writing about my views on business strategy as I do every month, I would like to present an exciting and tricky problem today.It is an issue of decision making similar to what many senior and top managers have to deal with from time to
699
johnsullivan's picture

The New New Thing: Blockchains and Recruiting

If reading about AI is making you feel like Alice in Wonderland, then take heart, there’s something new on the horizon — Blockchains. The technology has been around since 2008 but is now getting more mainstream in business applications, though...
699
hindustantimes's picture

Year of Culture: India’s diversity rocks London audience

 Sufi music, opera singing and Indian folk dances merged seamlessly with British hip-hop and tap dance as more 150 artistes put on a vibrant performance at one of the last events of the UK-India Year of Culture 2017.Billed as the Independence
650
davecrenshaw's picture

How To Get Work Done Without Stretching Yourself Thin – Pick Dave’s Brain

Could you pass the insanity test? This week’s question comes from David in Salem, West Virginia. He asks: I’m following your time management training program, yet often I find I’m putting appointments on my calendar and then not completing them—
637
anandmahindra's picture

youtube.com/watch?v=7SNwhZ…

From: twitter.com Via: twitter.com This could constitute a serious threat to Mahindra Odyssea, our boat building company. https://t.co/AwzTQVLp1lYou
636
jackcanfield's picture

5 Leadership Traits of Great Leaders

Whether you’re climbing the corporate ladder, building a network marketing downline, working for social change, or even coaching a Little League team or organizing a civic event, knowing leadership traits of effective leaders will make you more
626
johnsullivan's picture

AI or IA? Intelligence Augmentation for Recruiting

IBM’s Watson is synonymous with AI. Perhaps IBM should have named it Sherlock. Anyone familiar with the Sherlock Holmes stories knows that Watson wasn’t very bright. But he did have his uses. He was good at collecting and summarizing information,...

Pages