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2017 CEO Retreat

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2017 CEO Retreat 2017 CEO Retreat June 7-9, 2017 Crisis Communications Oscar Munoz (CEO, United Airlines) Crisis – United Airlines: On a United Airlines flight from Chicago to Louisville the evening of April 9, 2017, United’s gate agents were approached by crewmembers that were told they needed to board the flight. After volunteers were sought and offered up to $1,000 in compensation, one passenger, Dr. David Dao, was informed that he was being denied boarding. The passenger raised his voice and refused to comply with crew instructions. After being approached a few more times and refusing to de-board the plane, United Airlines agents felt they had no other choice but to call Chicago Aviation Security Officers to assist in removing Dr. Dao from the flight. Chicago Aviation Security Officers were unable to gain his cooperation and therefore forcibly dragged him from the aircraft. The entire incident was videotaped and instantly put on social media. United initially called the incident an "upsetting event." That evolved into a "truly horrific event" that prompted a full review of United's customer service training and refunds for everyone on the flight. The United CEO’s early statements on the incident were widely criticized. The slides to follow present a timeline of the CEO’s response to the incident and the subsequent public relations fallout. (Source: NBC Chicago. “United CEO Emails Employees After Controversial Video Prompts Outcry”. 10 April 2017.) © 2017 Center for High Performance. All Rights Reserved. 1 Crisis Communications Oscar Munoz (CEO, United Airlines) Monday, April 10, 2017 CEO Public Statement on Incident “This is an upsetting event to all of us here at United. I apologize for having to re-accommodate these customers. Our team is moving with a sense of urgency to work with the authorities and conduct our own detailed review of what happened. We are also reaching out to this passenger to talk directly to him and further address and resolve this situation.” – Oscar Munoz, CEO, United Airlines (Source: United Airlines News Releases—http://newsroom.united.com/news-releases?item=124753) © 2017 Center for High Performance. All Rights Reserved. 2 Crisis Communications Oscar Munoz (CEO, United Airlines) Monday, April 10, 2017 CEO Email to United Airlines Employees about Incident “Dear Team, Like you, I was upset to see and hear about what happened last night aboard United Express Flight 3411 headed from Chicago to Louisville. While the facts and circumstances are still evolving, especially with respect to why this customer defied Chicago Aviation Security Officers the way he did, to give you a clearer picture of what transpired, I’ve included below a recap from the preliminary reports filed by our employees. As you will read, this situation was unfortunately compounded when one of the passengers we politely asked to deplane refused and it became necessary to contact Chicago Aviation Security Officers to help. Our employees followed established procedures for dealing with situations like this. While I deeply regret this situation arose, I also emphatically stand behind all of you, and I want to commend you for continuing to go above and beyond to ensure we fly right. I do, however, believe there are lessons we can learn from this experience, and we are taking a close look at the circumstances surrounding this incident. Treating our customers and each other with respect and dignity is at the core of who we are, and we must always remember this no matter how challenging the situation.” (Source: The Associated Press. “Text of letter from United CEO defending employees”. The Washington Post. 10 April 2017.) © 2017 Center for High Performance. All Rights Reserved. 3 Crisis Communications Oscar Munoz (CEO, United Airlines) Tuesday, April 11, 2017 CEO Second Public Statement “The truly horrific event that occurred on this flight has elicited many responses from all of us: outrage, anger, disappointment. I share all of those sentiments, and one above all: my deepest apologies for what happened. Like you, I continue to be disturbed by what happened on this flight and I deeply apologize to the customer forcibly removed and to all the customers aboard. No one should ever be mistreated this way. I want you to know that we take full responsibility and we will work to make it right. It’s never too late to do the right thing. I have committed to our customers and our employees that we are going to fix what’s broken so this never happens again. This will include a thorough review of crew movement, our policies for incentivizing volunteers in these situations, how we handle oversold situations and an examination of how we partner with airport authorities and local law enforcement. We’ll communicate the results of our review by April 30th. I promise you we will do better. Sincerely, Oscar” (Source: United Airlines News Releases—http://newsroom.united.com/news-releases?item=124755) © 2017 Center for High Performance. All Rights Reserved. 4 Crisis Communications Oscar Munoz (CEO, United Airlines) Wednesday, April 12, 2017 Good Morning America Interview with Oscar Munoz Highlights: • “…I felt shame [when asked about his initial reaction to incident]” • “The first thing I think is important to say is to apologize to Dr. Dao, his family, the passengers on that flight, our customers, our employees…” • “…that is not who United is and you saw us at a bad moment.” • “this will never happen again on a United Airlines flight.” • “My initial words fell short of truly expressing what we were feeling.” • “It was a system failure…[when asked what went wrong on Flight 3411].” • “We will never use law enforcement to remove a booked and paid passenger ever again.” • “…no one should be treated that way. Period.” • “…it is never too late to do the right thing.” (Source: https://www.youtube.com/watch?v=90jSUe_vdhM) © 2017 Center for High Performance. All Rights Reserved. 5 Crisis Communications Oscar Munoz (CEO, United Airlines) Thursday, April 13, 2017 United Airlines Statement in Response to the Press Conference of David Dao’s Lawyer “We continue to express our sincerest apology to Dr. Dao. We cannot stress enough that we remain steadfast in our commitment to make this right. This horrible situation has provided a harsh learning experience from which we will take immediate, concrete action. We have committed to our customers and our employees that we are going to fix what’s broken so this never happens again. First, we are committing that United will not ask law enforcement officers to remove passengers from our flights unless it is a matter of safety and security. Second, we’ve started a thorough review of policies that govern crew movement, incentivizing volunteers in these situations, how we handle oversold situations and an examination of how we partner with airport authorities and local law enforcement. Third, we will fully review and improve our training programs to ensure our employees are prepared and empowered to put our customers first. Our values – not just systems – will guide everything we do. We’ll communicate the results of our review and the actions we will take by April 30. United CEO Oscar Munoz and the company called Dr. Dao on numerous occasions to express our heartfelt and deepest apologies.” (Source: United Airlines News Releases—http://newsroom.united.com/news-releases?item=124756) © 2017 Center for High Performance. All Rights Reserved. 6 Crisis Communications Oscar Munoz (CEO, United Airlines) Additional Fallout • Week of April 10: Twitter hashtag, #boycottunited, begins trending. • April 11: United Airlines shares down 4.4% erasing approximately $990M in market value. • April 12: United customers cut up their loyalty cards and post to Twitter. • April 21: Oscar Munoz loses anticipated promotion as United’s Chairman of the Board in 2018. • April 24: City of Cambridge, MA bans all City employees from using City funds on services provided by United Airlines when alternatives exist (~3,000 employees, 3rd largest employer in Cambridge, MA). • April 11—April 26: Zero communication from United on their Facebook and Twitter pages. • April 27: • Dr. David Dao reaches a settlement with United Airlines for an undisclosed amount. • United announces changes to improve customer experience including paying up to $10,000 for voluntarily bumped passengers. • United breaks social media silence to share it will not ask passengers to give up their seat except in matters of safety or security; states this is one of many steps they are taking “because actions speak louder than words”. • May 2: Leaders of multiple airlines, including United, asked to testify before Congress about customer service issues. • May 15: City of Chicago to release statement on findings of the incident regarding their Aviation officer’s involvement. © 2017 Center for High Performance. All Rights Reserved. 7 Crisis Communications Oscar Munoz (CEO, United Airlines) CEO Response: Oscar Munoz went from “Communicator of the Year1” to a public relations disaster. The initial apology from Munoz hurt his credibility for subsequent more sincere apologies. This caused the public to lose trust in the authenticity of further public statements, no matter how genuine they seemed. Where was the disconnect here? Observation: Significant PR damage was inflicted by United’s chief executive and his arguably thoughtless communication strategy. His initial apology was only for “re-accommodating a passenger.” An apology for the treatment of the passenger followed two days later. United’s Facebook and Twitter accounts were updated just twice in the several weeks after the incident leaving some questioning United’s true stance on the incident. When United did post to social media, they were bombarded by comments from the indignant public. CEO Oscar Munoz was heavily criticized for seemingly putting his employees before customers, not taking immediate responsibility for what happened, and not acknowledging the human side of the incident.
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