By Kyle Erickson | April 13, 2017
Pepsi: “Wow, we’re the most hated company in the world right now.”
United Airlines: “Hold my Pepsi, I’ll be right back.”
It sure has been a fun couple of weeks in corporate crisis communications!
By fun, I mean it’s been an absolute train wreck. Pepsi’s utterly distasteful and misplaced advertisement featuring Kendall Jenner was just the appetizer. It’s hard to comprehend that, given the hypersensitivity of the internet and our culture’s collective (and growing) affinity for taking offense, any publically traded entity would even consider communicating on any issue without the expressed blessing of crisis-communications experts and a rock-solid plan. Yet, the response from United Airlines’ (United) CEO Oscar Munoz to the viral video of an Asian passenger being viciously dragged off an overbooked flight has left such a sour taste in the mouth of the public that the company’s shares already have fallen nearly four percent (representing roughly a $1B loss in market value) and many people in China are calling for a complete boycott.
The fallout undoubtedly has been swift and continues to grow. So, what exactly went wrong? The incident had all the right ingredients for a PR disaster – a generally disliked industry, an elderly victim, a perceived abuse of power, alleged racism—all caught on video for the world to see. However, public outrage, which inevitably finds a target, zeroed in on the company’s leadership after a poorly calculated and inadvisable initial response.
Mr. Munoz’s first public statement was tepid at best, calling the incident “upsetting” and offering an unconvincing apology for having to “re-accommodate customers.” This statement made no reference to the forcible removal of a 69-year-old doctor, who was heard in the video saying that he needed to return home to see patients in the morning. Making matters worse, the internal statement issued by the CEO (which subsequently was obtained by CNBC) took an entirely different and more defensive tone, describing the passenger as “disruptive and belligerent” and claiming that he had “raised his voice and refused to comply” with officials. Mr. Munoz even went as far as to say, “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.”
Regardless of the factual details, the overly legalistic, unsympathetic response issued by the company and the disparity in tone between its first internal and external communications created the proverbial snowball. United sent that snowball flying down the hill by opting to blame the victim (read: paying customer) fist and forgoing any acknowledgement that perhaps a mistake was made by either the company or its employees. This crucial error is, in the mind of the public, unforgivable. The company’s latest statement and obvious efforts to roll back the damage has fallen on deaf ears, and not surprisingly so.
Had United Airlines simply shown compassion, understanding or even an intent to make things right, it may have emerged from this crisis looking like an airline that cares about its customers. Instead, its response just made the situation worse. The CEO, who actually received a “communicator of the year” award from PRWeek for his work over the past year to “better engage with employees and customers,” clearly was not prepared to deal with a communications issue of this magnitude. Therein lies the crux of United’s growing problem.
This is not the first significant public relations crisis the company has faced in recent memory, either. Just a few weeks ago, United barred two young women from boarding a flight after a gate agent decided the leggings they were wearing were inappropriate. The incident was shared by a bystander, set off a social media firestorm and resulted in immediate public backlash. In 2008, United purportedly mishandled and broke Canadian musician Dave Carroll’s prized Taylor guitar. After nearly a year of fruitless, dead-end negotiations with the airline (which refused to replace it), Carroll became so frustrated that he and his band released a protest song, “United Breaks Guitars.” The video (a perfect example of how quickly damaging information can spread online) quickly amassed millions of views and, within four weeks, cost United’s stockholders roughly $180 million in lost market value.
While it’s impossible to plan for every potential issue, it absolutely is critical to prepare. Having a plan in place that can be tailored to an event in a moment’s notice ensures a company has the capacity to respond to an incident swiftly and in one voice, stay on message and control the situation to the best of its ability. By failing to prepare properly and by responding so poorly, United quickly lost control of this issue and will spend the foreseeable future dealing with the fallout – the magnitude of which is not yet fully evident.