Smart Business: Kudos to Southwest Airlines
The incident was later traced to a bad riveting job, although it raised fears of metal fatigue stemming from numerous short flights imbedded in SWA’s business model. A similar but worse tear on a 1988 Aloha Airlines flight resulted in scores of injuries and the death of a flight attendant who was sucked out of the airplane while aloft. Aloha specialized in short hops between the Hawaiian Islands and that accident revealed the until then unknown peril of metal fatigue resulting from frequent cabin pressurization. Both accidents occurred with relatively old Boeing 737 planes.
Lessons to be LearnedAn important business lesson can be learned from the way SWA responded to this crisis. Without being ordered to, SWA immediately grounded all 79 planes it operated of the same class as the afflicted jet. That was about 15 percent of its fleet and resulted in the cancellation of hundreds of flights and thousands of delays. The economic hit to SWA and future bookings is unknown at this point but likely to be substantial. Since SWA flies nothing except Boeing 737 aircraft, questions arise about the long-term consequences for our nation’s heretofore most successful airline company. Nonetheless, the company emphasized passenger safety above all else and deserves hearty applause for that.
SWA’s plight calls to mind the infamous 1982 episode when seven people in the Chicago area died after taking extra-strength Tylenol capsules that had been filled with cyanide by a still unconvicted killer. All of us live with the legacy of that crime, which led to a federal law mandating tamper-proof containers for all ingestible products.
The Tylenol tampering clearly was done after the products hit the shelves, so even the sleaziest ambulance chaser would’ve had trouble squeezing money out of the drug’s maker, Johnson & Johnson. Yet instead of dithering and pointing fingers, Johnson & Johnson conducted an immediate product recall spanning the entire country-even though no case of poisoning showed up anywhere except the Chicago area. The recall totaled 31 million bottles and cost the company more than $100 million dollars. They spent millions more running sensitive TV commercials featuring Johnson & Johnson’s somber CEO explaining their action and expressing sorrow for the victims, even though the company had done absolutely nothing wrong. It remains a textbook example of crisis management taught in business schools throughout the country.
Responsibility to CustomersHow do you react when one of your jobs goes wrong?
Whether or not it’s your fault is almost beside the point. In most cases it takes days, weeks or months of forensic investigation to figure out the ultimate cause of a mechanical or management failure. In the here and now, you are held responsible in the eyes of your customer. How a contractor reacts even before knowing all the facts reveals a lot about that contractor’s personal character. It also has a lot to do with the long-term health of the business.
Dithering and finger pointing is the default position for most business owners when something gets botched. Nobody likes to admit to mistakes and, as noted, it’s not always clear who’s to blame, especially at first. Yet it’s never good to be perceived as shirking responsibility.
My column of August 2010, “Prepare For Disaster Now,” covered advice from a crisis management expert of what to do in case of a PR emergency. It was geared to dealing with the news media, but most of the recommendations fit equally well in reacting to customers and other interested parties. Here’s a repeat of some of that advice.
The first step is to organize an emergency management team to deal with any potential crisis. In big companies typically this would include people such as a project superintendent, safety manager, project manager, HR manager, legal counsel and, of course, a high-ranking executive, preferably the CEO. Select one of these to be the team leader charged with responsibility for quick reaction and damage control. The team leader will be the targeted recipient of all information leading to the emergency and responsible for disseminating that information to all other emergency team members.
Talk to the media. Saying something, no matter how little, is better than saying nothing. Explaining why you can’t talk more (don’t know all the facts yet, advice of counsel, etc.) is better than stonewalling. “If you want your side of the story told, you must tell it,” said crisis management author Janine Reid. “If you don’t, reporters will get a version elsewhere, such as from the disgruntled employee who was laid off, or the worker who just witnessed his best friend getting killed or injured.”
Avoid “no comment.” Anyone using this statement looks guilty as sin. If you don’t know the answer, tell the reporter that you don’t know but will try to find out. Avoid excuses and explain how you are planning to make things right.
Designate one person as the sole spokesperson. In many cases the spokesperson would be the company owner/CEO, though in some situations it might be good to insulate the CEO from media attention. Some CEOs may be too gruff, inexperienced or for any other reason not the best person to be the public face of the company, or may be too engaged behind the scenes to devote time to this important function.
Make sure everyone knows who the spokesperson is. The designated spokesperson should be the only one authorized to disseminate information to the outside world and every other member of the crisis management team should clam up and refer all media inquiries to the spokesperson. No information should be released without being approved by upper management.
Don’t cover up. If you find out bad news, bring it up quickly before someone else does and makes it sound worse than it is. However, first make sure your information is accurate.
Tell the truth. This does not mean you have to provide every little detail or admit to wrongdoing, but lying always comes back to haunt you.
Don’t say anything “off the record.” Assume that anything you say will be made public.
Emphasize the positive. Point out all the remedial measures taken and what your team is doing to make things right. Talk up any awards or positive recognitions your company has received for professionalism, community work, charitable contributions, etc.
Here’s hoping your problems are magnitudes smaller than the ones that afflicted SWA and Johnson & Johnson.