April 12, 2017
Good morning.
My co-author Geoff sent me an email early yesterday suggesting I lead with with “the United Airlines incident” in that day’s newsletter. I declined, thinking furor over United’s action would soon pass.
Wrong about that.
United’s rough dragging of a passenger off a flight to Louisville has now joined
Cecil the Lion and
Justine Sacco as case studies in social media outrage. It didn’t help that the passenger was Asian, making the video top trending topic on Chinese social media site Weibo. Nor did it help that United CEO Oscar Munoz made such a ham-handed attempt at apology – saying he apologized “for having to re-accommodate” the passenger, then later sending a note to employees blaming the passenger for being “disruptive and belligerent.” Not until yesterday afternoon, after the company’s stock swoon threatened to wipe out over a billion dollars of market cap,
did Munoz issue a proper apology, saying “it’s never too late to do the right thing.” I disagree; it was too late.
I have some sympathy for Munoz. After suffering from a heart attack and receiving a transplant shortly after getting the top job in 2015, he’s made real progress turning around the troubled airline. Last year, he earned a spot (No. 20) on
Fortune’s Businessperson of the Year list (read Shawn Tully’s
profile here.) And responding to social media outrage is not something they teach at business school. Well, not yet, anyway.
Nevertheless, it has become an inescapable reality of business leadership today. As Dov Seidman told the CEOs who attended the
Fortune Global Forum in Rome last December, moral judgment declines with distance – we’re most passionate about things closest to us – but distance has disappeared in today’s world. As a result, an event like Monday’s rough “re-accomodation” is instantly at hand to everyone, everywhere. That puts a big burden on CEOs like Munoz; they have to take moral responsibility for countless acts over which they have little control.
Can Munoz recover? It will take more than a single statement to convince people he’s sincere. The company says it is reviewing its policies, and change would help – overbooked flights are the bane of all frequent travelers. For others who want to learn from his example, the lesson is one Seidman delivered in Rome: in today’s connected world, leaders need empathy as much as they need expertise.
“We need a new leadership playbook,” Seidman said. “In many ways, I think we have gone from the industrial age, when we hired brawn – hands – to a knowledge economy where we hired heads, and now I think we are entering the human economy where we hire hearts.” (You can watch Seidman’s
full comments here.)
Meanwhile, United’s competition is having fun at its expense on social media. “We beat the competition. Not you,” said a Southwest post.
Delta stayed mum, however, still recovering from a storm-triggered meltdown that left many thousands of fliers, myself included, stranded last weekend.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
