TUESDAY 2 MAY 2017 11:37 AM

STANDING UP FOR UNITED

In the midst of a PR maelstrom, CEO of United Airlines Oscar Munoz has stood by his employees. Brittany Golob investigates the airline’s employer brand and strategy of changing from the inside out.

Mergers are notoriously challenging to get right when it comes to the internal audience. Some mergers or acquisitions collapse under the sheer weight of ineptitude around the coagulation of two organisations’ workforces. United Continental Holdings, the corporate entity representing United Airlines and the now-absorbed Continental Airlines, has been facing this very challenge since 2010. That’s a long time for enmities to form and divisions to deepen.

CEO for only 18 months, Oscar Munoz has plans to change all of that. After a heart transplant just weeks into his tenure with United, Munoz began work in earnest just three months after that. Since March 2016, his achievements have been palpable, both within the organisation and in terms of its performance. But, in the midst of any change, a business is vulnerable. And within that vulnerability lies the possibility for crisis to strike.

Strike it did on 9 April when United Flight 3411 was overbooked. In a story and set of images now known widely, a passenger was forcibly dragged from the plane, injuring him and making global headlines in the process.

But Munoz still has a plan for his company.

He has worked to erase the divisions wrought along the old United and Continental lines. He has streamlined the airline’s hierarchy. He has contracts in place with all the airline’s unions for the first time post-merger. He has, in effect, made himself the point person for internal change.

At the annual shareholder meeting in June 2016, he told delegates, “It is important that we win back the trust of employees first, then customers,” according to the Chicago Tribune.

For his efforts, he was named PR Week’s ‘Communicator of the Year’ in the US and has overseen a bump in stock price to the tune of about $20 a share during his tenure. He has stood by his promises to employees and his plan for organisational change through his own recovery from a heart transplant and through United’s turbulent travels.

And, there has been no shortage of customer complaints about the airline. It was the second-most complained about domestic US airline, next to American Airlines, in January this year. The recent incident involving David Dao on United Flight 3411 is not the first of the traveller horror stories involving the airline – though it may be the most violent.

For United, though, it’s getting better. The airline’s on-time statistics have steadily increased under Munoz’s tutelage – a datum that generally corresponds to customer satisfaction – and employees are happier. When Munoz took the helm, one airport’s staff had an impromptu party. Numerous reports document the time he has spent talking to and working alongside frontline staff at airports across the country. His labour agreements have been generous in an industry not known for high pay. These are usually the signs of change within an organisation, meaning the crisis may be one of the symptoms of change.

Often, employer brand change is inspired by a corporate leader, but Munoz’s personal involvement has made him, somewhat unusually, the force behind the new employer brand. “A leader can set the pace, provide an environment that allows employees to deliver the promise that they make as an organisation, for every single customer, irrespective of who they’re talking to or where they are in the customer journey. If any part of that process is broken, 99% of the time you’ll end up with a crisis,” managing partner at communications consultancy Instinctif Partners Victoria Lewis-Stephens says. “You deliver brands from the inside out. If the culture, the processes, the environment aren’t right internally, you’ll never deliver the right experience externally.”

Despite the PR impact of the crisis, what has been indicative of Munoz’s commitment to change is his response to the Flight 3411 issue. Munoz’s second statement – following the initial ‘we’re looking into it’ comment so common in crises – was one that spoke to his support for his employees. He apologised, as is advised in a crisis, and he said, “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.”

He then called on his employees to improve their behaviour toward customers and called the crisis a learning experience.

CEO Oscar Munoz's leadership of United Airlines has already resulted in positive changes to the company's workforce and its overall performance. Since the crisis hit, he has responded quickly to support his employees and he has made swift changes to customer service policies to avoid a similar problem in future. 

In another email to employees, Munoz wrote, “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 en examination of how we partner with airport authorities and local law enforcement.”Then, in after a press conference on 13 April, a statement from United read, “We have committed to our customers and our employees that we are going to fix what’s broken so this never happens again.” And, Munoz has pledged to share the results of this research with employees by 30 April.

What the LA Times calls a ‘toxic culture,’ may indeed simply be an organisation experiencing a bumpy period of transition. What is required, says executive director at brand and communications firm Emperor, Simon Harper, is a reexamination of United’s values. “The employer brand needs to drive a culture whereby employees are encouraged to make decisions outside of pre-defined procedures. If the United employer brand had been embedded properly and was a meaningful part of day-to-day life for employees, it is unlikely the ground team would ever have escalated the matter so crudely. An employer brand that lives in a pdf or on an intranet is a waste of time,” he says.

Lewis-Stephens agrees and adds that culture change is not a matter of a single initiative or campaign, it should be an ongoing commitment. But now that a crisis has hit, United has some work ahead of it.

First is to apologise and work to rebuild trust with customers. Second, says Lewis-Stephens, is recognising that there is a problem. Munoz and his team need to “be quite transparent about how are they going to change their processes, how are they going to change their procedures so something like this can’t happen again. That requires an amount of listening and that will require an amount of collaboration with employees and with customers to work out how do they stop something like this from happening again.”

It may even be the catalyst for change that United needs to kickstart its new employer brand. By improving the culture, employees will feel more empowered to follow the heed of the organisation’s values, rather than its set procedures, to do what is best in the moment.

Outside of the internal audience, this crisis exemplifies a wider challenge within the airline industry. Customer service is, like legroom, at a premium when flying the friendly skies. “Airlines have long been one of the lowest-scoring industries in the American Customer Satisfaction Index,” reads the eponymous 2016 report. However, the report documents a boost in satisfaction over the last four years, largely due to improvements in American and United airlines’ increased numbers.

But the satisfaction problem is compounded by third party contracts with ground security staff and other employees not working directly for the airlines. This is a challenge Lewis-Stephens and Harper both point to in terms of the flight 3411 crisis. They assert that a stronger employer brand would extend to indirect employees like the Chicago Aviation Security staff who dragged Dao from the plane. But it also means that the recent crisis may have been the result of an escalation outside of the complete control of United Airlines. The point at which United could have avoided the inevitable was in not allowing passengers to board the aircraft before the removal process began.

Charlie Hampton, a partner at Engage by Bell Pottinger who leads a number of travel and aerospace accounts, says, “Airlines, like all multi- faceted organisations, face a range of challenges when communicating internally – not least the need to do so quickly and consistently to an employee group many of whom are working across multiple locations and often time zones. Working with third parties adds complexity as they don’t report directly within the organisation but are its brand ambassadors, so it’s crucial to set both high standards and effective service recovery procedures for third parties that are completely aligned with the organisation’s own ones.”

These challenges are all ones for the long haul. In the short term, United has to recover from what a sub-par PR response to the crisis as Munoz’s passionate support for his employees may have cost him some points with customers and the public. Philip Pank, a partner at Engage by Bell Pottinger and former transport correspondent for the Times says Munoz’s belated apology was poor PR practice because it lacked the authenticity to connect with the press or the passengers. He adds, “The short-term crisis management is about trying to reassure passengers that they won’t be hauled off an aeroplane like Dr Dao. The airline will need to lead a concerted charm offensive to make sure that passengers feel comfortable booking tickets, while staff feel proud to wear the United uniform.”

Funnily enough, one of Munoz’s initiatives was to redesign staff uniforms after criticisms of their shoddy quality after the 2010 merger. They’ll be wearing their new uniforms, but it will be on Munoz’s shoulders to lead the company and build a future where all of his employees are, indeed, united.

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