What Companies Can Learn from the Southwest Airlines Crisis
Most travelers anticipate holiday air travel to be fraught with minor annoyances, winter weather and a greater volume of fliers—all likely to lead to a few hours’ delay or even some cancellations.
For Southwest Airlines and its passengers, minor annoyances snowballed into a major meltdown this December. A winter storm coupled with Southwest’s outdated crew-scheduling software and its point-to-point operations model led to more than 15,000 canceled flights over eight days, devastating many holiday plans and leaving millions of passengers stranded and/or inconvenienced.
Normal operations have since resumed. Now Southwest faces the uphill task of repairing its reputation and restoring the collective faith fliers have in the company.
Should your business face a crisis one day, the Southwest situation offers several lessons that can help you anticipate issues and navigate them successfully with a crisis management plan.
Conduct a vulnerability assessment
Scenario planning. Risk assessments. Polling employees and clients for potential issues. These activities can help identify potential pain points in your organization that could evolve into a crisis so you can create a crisis management plan for them. A SWOT analysis is another helpful way to start as you outline your company’s strengths, weaknesses, opportunities and threats.
Southwest’s weaknesses were its antiquated software that couldn’t handle the extreme weather event, and its point-to-point operations model. The airline’s planes fly consecutive routes directly between smaller markets, and pick up crews at these locations. Most other airlines employ a hub-and-spoke model. It means that passengers flying from small cities must change planes in hub locations, rather than flying directly between the smaller markets.
While Southwest’s model is typically more efficient than the hub-and-spoke model (less connecting flights, shorter flight times, savings that are passed along to consumers with more discounted fares), it’s also less resilient. Flights flying out of hub cities had multiple options to reroute passengers and pick up crews, whereas Southwest’s cancellations in one area became a ripple effect impacting more cities.
The Black Swan theory and tradeoffs between efficiency and resiliency
The Southwest situation can be classified as a Black Swan event. While the occurrence is fairly unlikely to happen, it can spell disaster for an organization if it does take place.
An American Institute for Economic Research (AIER) article details other Black Swan examples: A “highly profitable hospital network may suffer a similar meltdown in operations under a bizarre mass casualty event” because they haven’t made any accommodations for extra space and staff and thus lose efficiency. A “domestic car company that does all its business with just one foreign steel company” in the name of better prices is more vulnerable to a political coup than a car company that works with domestic steel companies or multiple companies at slightly higher prices.
Protecting against these possible Black Swan events can be a hard sell to leadership, because there’s no guarantee they’ll happen and devoting resources to it takes away from current profits. According to the AIER article, Southwest Airlines “pursued an excess of transportation efficiency, which has measurable present benefits.” But it neglected to pursue long-term resiliency by investing in, for example, a systems upgrade, which is expensive and only provides “unmeasurable future benefits.”
This is why it’s critical to envision everything that could possibly go awry at your organization, and how you would meet each challenge. That way you can perform a cost-benefit analysis of a decision and determine how that choice might lead to possible business disruptions. Ask yourself this: If you’re cutting corners to save money now, what is the potential cost you might face in the future?
Prepare a crisis communications plan
When disaster strikes and emotions run sky high, it pays to have a blueprint already in place. The crisis communications plan should outline:
- who will serve as the company spokesperson
- members of the crisis team and their contact information
- an activation strategy (i.e. who notifies each crisis team member)
- and contact information for external audiences (media, regulatory agencies, etc.).
The plan should also include drafts of key messages. You’ll need to tailor them to the specific situation, but they’re a helpful starting point when time is of the essence. Regularly review and update the crisis management plan, and also conduct tabletop exercises to run through the process. This will help you identify and correct any activation issues prior to the actual crisis.
Consider what you say… and when you say it
While Gigi Marino, chief storyteller at Inbound MarketingRx, pointed out the few successes of CEO Bob Jordan’s apology, Moshe Cohen, who teaches at Boston University’s Questrom School of Business, told Forbes that more is warranted.
“The message needs to be ‘we messed up, here’s what we’re doing to fix it, and this is what you can expect over the next few days,’” Cohen explained.
“Don’t let other parties get ahead of your story,” Shane Allen, a creative consultant and futurist, told Forbes. “The Southwest flight attendants’ and pilots’ unions got in front of journalists days before Southwest did, allowing someone else to control the narrative in the media by planting words like ‘meltdown’ early on. It’s okay if you don’t have all the information, as long as you’re transparent in saying that. But don’t wait.”
Photo by Peter R Foster IDMA/Shutterstock
Jill McDonnell is a Chicago-based content writer and communications professional. She has a bachelor's degree in magazine journalism from the University of Missouri-Columbia and a master's degree in public relations and advertising from DePaul University. She is currently at work on a psychological thriller novel.
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