United Airlines has taken a big hit in the media the last few weeks based on an incident that was likely isolated, but significant. The public cried foul across millions of social media impressions, United Airlines was forced into crisis mode and the airline has yet to fully recover. Amidst the chaos, United Airlines’ embattled CEO said something that most companies should pay attention to and emulate.
During a media briefing, CEO Oscar Munoz talked about the evolution of the company and what the organization must do for long-term success.
"Customers have always been first, but I think that (in) the evolution of our company we needed to regain the trust of our employees first before they can do that," Munoz said during a Q&A with media today discussing the company's first-quarter earnings. "Customer service at the end of the day is not about a policy or procedure or tool—it's about values, human values, that we cannot lose. If I lost that with tens of thousands of employees, we'd be in a much more difficult situation. As far as I look at it, it's about values, not protocol."
In our opinion, this is where Munoz almost got it right. Munoz should not just “think” that employees come first, he must KNOW that employees come first. I have spent much of my career striving to convince organizations that employees must come first, not customers. Repeatedly, research shows us that when employers focus on employee satisfaction (employee engagement) what follows is higher levels of customer satisfaction and customer loyalty that lead to revenue growth and probability.
The Service-Profit Chain is a business model developed by a group of researchers (James L. Heskett, Thomas Jones, Gary Loveman, W. Earl Sasser, and Leonard Schlesinger) from Harvard University in the nineties. In their subsequent book, The Service Profit Chain – How Leading Companies Link Profit and Growth To Loyalty, Satisfaction and Value, they prove there is a direct link between superior service experiences, customer loyalty and financial performance of an organization¹.
I continue to be surprised at the number of companies that still profess the “customer comes first.” We believe, as evidenced by research, that the Service Profit Chain must be the strategic charter for every organization. By linking employee satisfaction (or if you prefer, engagement) to profitability, organizations employ a strategic imperative to impact the financial results of an organization.
The most recent incident with United Airlines, like most situations that escalate to its magnitude, can be second guessed to infinity. But, I don’t want to make the incident the focus of this message. I do want to take the opportunity to refocus our attention where is should be - on employees. When is the last time you a heard of a negative incident of this magnitude taking place at Southwest Airlines? I cannot think of one. Herb Kelleher, founder of Southwest Airlines was once quoted saying “We tell our people, 'Don't worry about profit. Think about customer service.' Profit is a by-product of customer service. It's not an end in and of itself.”
The question still to be answered by United Airlines is whether they will continue to “think” employees come first or will the make the simple decision that employees MUST come first. We know that employees must come first.
1. Heskett, James L., Sasser, W. Earl Jr., and Schlesinger, Leonard A. The Service Profit Chain: How Leading Companies Link Profit and Growth to Loyalty, Satisfaction, and Value. The Free Press, New York, 1997.