United’s Crisis Mismanagement and Corporate Culture

Lukewarm Apology Highlights Cultural Concerns

United Airlines made headlines last week for an incident involving the forcible removal of a paying passenger from one of its planes. In the 10 days or so since, United has been navigating a PR nightmare. The company’s CEO, Oscar Munoz, was quick to respond, but his apology rang hollow, and it may suggest a major disconnect in United’s culture.

This article was republished with permission from Michael Volkov’s blog, Corruption, Crime & Compliance.

We were all aghast at the spectacle on the United Airlines flight last week when a customer was dragged off a plane, refusing to give up his seat because of an overbooking. No one can underestimate the power of real-time video of controversial incidents.

United’s response as reflected in CEO Oscar Munoz’s three separate statements provides a textbook example of how not to handle a crisis and how not to apologize. His inability to offer a credible apology not only reflects a failure of leadership, but also raises some equally important questions as to the state of United’s corporate culture.

Munoz’s initial “apology” on April 10, immediately following the incident, reflected a questionable approach.

This is an upsetting event to all of us here at United. I apologize having to re-accommodate these customers. Our team is moving with a sense of urgency to work with 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.

Munoz’s non-apology apology disturbingly referred to an apology “to re-accommodate these customers.” Munoz failed to address the most significant part of the incident: the violent removal of the passenger from the plane.

United also suggested initially that law enforcement alone failed to act reasonably when removing the passenger. Even if this were true, United was in a position to protect its passenger through the supervision of what was occurring and by speaking up to temper the law enforcement officers’ conduct. To suggest otherwise is a weak attempt to shirk responsibility.

Munoz eventually expressed contrition on behalf of United and repeated these apologies in subsequent television appearances.   Munoz also acknowledged eventually that his attempts to apologize fell short and did not convey his responsibility for the fear created by the incident.

Munoz and others at United ignored the most significant impact that incident had on its customers: fear. Airlines have power and authority over their passengers. This relationship has become more skewed in recent years as regulatory protections for passengers have declined. In the extreme, United’s conduct was the inevitable result of a corporate culture that has lost sight of the importance of its passengers. Of course, the legitimate protection of passengers from terrorism and other criminal conduct has to be preserved. However, this incident is qualitatively distinguishable from such an incident.

One wonders: had the incident not swept through social media as it did, would United have felt inclined to strengthen its message of apology and responsibility? The question lingers whether United’s response was a corrective measure to avoid public shaming, falling stock prices and an exodus of loyal clients or whether it was a response to ethical standards that guide its corporate culture. In this regard, Munoz’s lukewarm apology was revealing.

Munoz’s failure to offer a credible and sincere apology suggests a major disconnect in United’s culture. If a CEO cannot acknowledge such an egregious handling of an issue, you can rest assured that this same deficiency will permeate the entire corporate culture. Mid-level managers and employees may share the same perspective when carrying out their jobs.

A true apology requires giving up any possible excuses, giving up saving face and any attempt to “win” the public dialogue. A true apology requires a focus on what led to the incident and an immediate willingness to address its cause and consequences.

Tone at the top has a profound impact on corporate operations. When a CEO does not set an example for employees, the impact on corporate behavior and morale is significant. The CEO’s failure to act responsibly breaks the possibility of trust between company leaders and employees.

United’s violent removal of the passenger on the overbooked plane may reflect its culture of excuses and its inability to take responsibility for its treatment of its customers. Munoz’s inability to apologize reflected the lack of his own – and probably the company’s – ability to assume responsibility for its conduct.