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4 Essential Management Classes From Southwest Airways’ Vacation Meltdown

Issues went south for Southwest over the December holidays, because the airline canceled greater than 15,000 flights, stranding 1000’s of vacationers throughout the nation.

Whereas the flight cancellations have been initially triggered by a serious winter storm, they grew exponentially because the weather-related disruptions overwhelmed the Southwest’s antiquated crew scheduling system.

It was a horrible episode for an organization that has lengthy been held up as a mannequin for others, due to its distinctive company tradition and its relentless deal with the shopper expertise. However there are a number of necessary classes that each enterprise ought to be taught from Southwest’s vacation debacle:

1. Nice recoveries can eclipse ugly failures.

Even one of the best, most well-managed firms are usually not proof against failures within the buyer expertise. However what makes these firms completely different is that they acknowledge that they needn’t resign themselves to making a dissatisfied buyer (or, worse, a vocal model detractor) when failures happen.

Slightly, they perceive that in the event that they overcorrect on the restoration, they’ve a possibility to create a extra loyal buyer despues de the restoration than that they had earlier than the failure. It is a phenomenon that is been studied so extensively, there’s really a time period coined for it – the service paradox. It is a consequence of how our brains are wired, as a result of the recollections we supply away from an expertise are largely formed by the peaks and valleys within the encounter, together with the very last thing that occurs to us within the interplay.

Distinctive recoveries create a powerful peak on the finish of an expertise — that is the right mixture of substances for memory-making, and it is why a really nice restoration can wholly overshadow the negativity of the unique failure. (To see the phenomenon in motion, try this video the place I describe my private expertise with The Finest Service Restoration… Ever!)

The jury’s nonetheless out on whether or not Southwest’s restoration might be ok to capitalize on the service paradox. The airline has mentioned it’ll refund the tickets of passengers impacted by the cancellations, in addition to reimburse them for added bills they incurred (meals, lodge lodging, and floor transportation). As well as, Southwest is providing affected clients 25,000 frequent flier miles (price about $300 towards future journey), with no expiration or blackout dates.

At the very least one business analyst who was booked on a canceled flight (The Factors Man’s Zach Griff) has been impressed with Southwest’s restoration to date, posting this tweet commending the corporate’s response. That is exactly the form of response the airline must elicit from many extra of its impacted passengers.

The important thing takeaway, nonetheless, for any enterprise is solely this: View expertise failures as a possibility to engineer exceptional recoveries, as a result of that is the way you flip upset clients into delighted ones.

2. Do not equate glamor with significance.

Ultimately, Southwest’s Achilles heel was growing older crew scheduling software program that buckled beneath the pressure of so many flight cancellations.

As Captain Michael Santoro, Vice President of the Southwest Airways Pilots Affiliation, instructed CBS Information: “The storm was the catalyst that began this entire occasion, however the greatest drawback is that our scheduling IT infrastructure is outdated and might’t deal with the large cancellations that needed to occur that day when the climate occasion occurred. You get this snowball impact the place it may possibly’t hold observe of the place pilots are, flight attendants are and airplanes are.”

Southwest’s pilot and flight attendant unions each assert that these methods points have been no shock to anybody within the firm. They declare that, regardless of repeated pleas from the unions, the airline elected to not make important remedial investments in its IT infrastructure.

Southwest CEO Robert Jordan now appears to acknowledge that as a mistake. In a Christmas Day message to staff, he acknowledged the necessity to make investments extra in modernization of the airline’s crew scheduling system.

This problem is not distinctive to Southwest. Loads of firms are saddled with growing older legacy methods which are starved for funding, held along with the IT equal of duct tape. Reluctance to spend money on such areas displays a bigger administration bias, one which directs consideration (and cash) to extra “glamorous” elements of a enterprise – the elements which are perceived to be extra seen, extra thrilling, extra stimulating.

Certainly, it’s most of these company “shiny objects” that extra simply draw funding: retail retailer makeovers, branding initiatives, bleeding edge expertise initiatives, distribution expansions, mergers and acquisitions. Left within the mud is funding for seemingly much less “horny” endeavors, be it in success operations, common logistics, or inner methods and IT infrastructure.

It is not that the glamorous, buzzworthy initiatives aren’t priceless, however they have to be balanced alongside investments in additional “boring” (however no much less necessary) endeavors. Usually instances – as Southwest found with its crew scheduling software program – it is within the least glamorous elements of a enterprise the place the strongest operational foundations have to be solid.

If the important gears of your corporation equipment are usually not well-oiled, then you might be planting the seeds for future underperformance, if not outright failure. Steer your funding {dollars} accordingly.

3. Listening to staff is as necessary as listening to clients.

In line with the Washington Publish, Southwest’s unions had warned the airline for years that its outdated methods have been a vital level of vulnerability. These warnings, nonetheless, apparently went unheeded, as executives declined to make the IT investments required to resolve that vulnerability. Latest occasions have pressured their hand, however not with out first inducing an excessive amount of buyer ache.

It is immaterial whether or not Southwest executives both by no means heard these worker issues or selected to disregard them. The lesson is identical, regardless: Leaders should hearken to their frontline staff and consider that constituency as a key supply of intelligence for shaping future enterprise choices and funding allocations.

A enterprise’ frontline employees is arguably most educated in regards to the obstacles that stand in the best way of delivering a constantly nice buyer expertise. (Within the case of Southwest, it got here within the type of pilots and flight attendants sounding the alarm over the antiquated crew scheduling methods.) However too typically, the concepts and issues volunteered by rank-and-file staff falls on deaf ears.

Voice-of-the-Buyer applications are all the craze in organizations which are making an attempt to foster customer-centricity, however they signify an incomplete answer. The Voice-of-the-Worker is simply as necessary to seize – and act on.

In some organizations, staff will not be shy about voicing their options. In others, cultural norms would possibly dissuade employees from talking up (for worry of retribution), and so in these environments, it is necessary that leaders proactively and visibly open the worker suggestions spigot.

Whereas staff may not get the ultimate say, what’s necessary is that their enter is actively solicited, thoughtfully thought of, mixed with different intelligence sources, and finally used to drive government determination making.

4. Model fairness may also help include the harm from expertise failures.

A lot has been written about Southwest’s vacation troubles, with fairly just a few buyer expertise consultants and administration gurus declaring how tough will probably be for Southwest to regain its former glory. The go-to platitude is all the time some variation on “it takes a lifetime to construct a repute and a second to destroy it.”

However the actuality is extra nuanced than that.

Sure, Southwest had a horrible, horrible, no good, very unhealthy week. And, no query, it is going to price them from each a monetary and reputational perspective. Nonetheless, to grasp simply how scarring the debacle is likely to be to the Southwest model, it requires some context.

Let’s do not forget that that is an airline which has earned both the #1 or #2 spot in JD Energy’s North America Airline Satisfaction Research for eleven years in a row. (In 2022, Southwest was the top-ranked airline within the Financial system/Fundamental Financial system phase, primarily based on JD Energy’s passenger surveys.)

What which means is Southwest has constructed up fairly a reservoir of buyer goodwill – or, to place it in advertising parlance, they have some spectacular model fairness. Lots of people have favorable impressions of Southwest, and the airline has greater than its share of vocal, passionate model advocates.

That context is necessary, given the psychology of how model perceptions are shaped and maintained – partially by means of our (unconscious) reliance on the “affirmation bias.” That cognitive bias leads us to interpret the world round us in a method that confirms our pre-existing beliefs. We pay extra consideration to information factors that align with these beliefs, whereas conveniently overlooking those who contradict them.

Within the enterprise enviornment, this implies comfortable, lifelong clients will lower you some slack when issues come up. They will be extra forgiving, extra keen to see an issue as an remoted failing. (Notably, the bias cuts each methods – it additionally makes it tougher for firms with poor reputations to shortly reverse detrimental buyer sentiment.)

It is because of this that Southwest has a considerably clearer path ahead in comparison with lower-rated and less-loved airways, similar to Spirit, which have additionally skilled important service disruptions within the current previous. When an organization like Spirit disappoints, individuals assume, “Oh, there they go once more!” Our affirmation bias frames a Spirit failure as yet one more reaffirming information level for the airline’s poor repute. Nonetheless, when the a lot higher-rated Southwest has an identical misstep, it is extra prone to be seen by shoppers as an anomaly fairly than a brand-defining second.

To be clear, beloved companies aren’t proof against the model tarnish that may be triggered by high-profile buyer expertise failures. (If Southwest has repeated episodes of mass cancellations, akin to what occurred in late December, it will transfer the needle on shopper perceptions.) However robust model fairness – solid not by means of intelligent advertising, however by means of constantly nice buyer experiences – does present useful armor for weathering such storms.

Fastidiously studied for many years by lecturers and enterprise leaders alike, Southwest has taught us a lot through the years about how you can create distinctive experiences that flip clients and staff into lifelong followers. Whereas it may not be the platform the airline would have hoped for, its current struggles supply yet one more priceless set of classes for any enterprise that aspires to greatness.


Jon Picoult is the creator of FROM IMPRESSED TO OBSESSED: 12 Rules for Turning Prospects and Workers into Lifelong Followers. Join his month-to-month Buyer Expertise & Management eNewsletter right here.

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