Throughout the last week the story of how the United Airlines mal-handled the passenger who refused to surrender his seat to accommodate the Airline’s own crew exploded in the media with an endless parade of the video clips showing how that poor passenger was dragged out of his seat, hauled out fighting with a bloodied face, and its aftermath that showed United Airlines egregious disregard for the passenger(s). The CEO further compounded this ignominy by tweeting his “apology” on how the airline –“re-accommodated” his passenger and why it was not their fault. This episode was lampooned on almost every late night show and even on Saturday Night Live (SNL) last weekend.

That week the airline stock lost nearly a billion dollars in its cap, with a bottomless pit of various lawsuits that are now showing up on all fronts. Four people were fired and many suffered career setbacks for merely being there on the scene. With its huge presence in China many there have openly rebelled against United Airlines, causing it to lose its brand, ongoing business, and endless hurt.

Now that sufficient time as passed since that incident, all the back story about that ugly episode has surfaced and it puts the airline in even worse light than it did as the drama was unfolding, both in the mainstream media and on the social media. Here are some of the more juicy details that got left out in the media’s rush to jump on the story:

1. The flight was not overbooked, but after everyone was boarded the airline decided that it needed to transport four of its own crew to where this flight was headed to staff some other flight there.
2. The Gate Agent should have known these staffing needs in advance, allowing them to stop the four most recently booked passengers from ever boarding that flight. This would have allowed the four to fly to where they would be needed.
3. The ground crew should have been empowered to make those four bumped passengers, still on the ground, to make as comfortable as possible by giving them equitable compensation.
4. Relentless cost cutting under the current CEO started when the previously fired CEO Jeff Smisek was replaced by the current CEO, who is even more disengaged than his predecessor.
5. When the CEO’s focus devolved to relentless and indiscriminate cost cutting employees lost their faith in the airline and they became increasingly more indifferent to customer service and how the airline functioned.

When management imposed arbitrary and relentless cost cutting without listening to those on the front lines no one that comes in contact with the customer cares anymore and the airline continues to suffer the wrath of its customers and indifference of its employees. Some examples:

• Unhappy flight attendants routinely turn up the heat in the cabin. Why? If passengers are knocked out they have less work passing out peanuts and drinks. The next time you think you are coming down with something, ask the crew to turn down the heat.
• Pilots have lost virtually every financial incentive to do their best. Now, many purposely slow down flights to get bumped into overtime. If they make a plane a half-hour late that equals about $70.00 each.  The most cynical pilots figure out how to time a flight so that it arrives as late as possible without getting cited.
• The ramp crew slows down the loading of baggage to delay the flight and support the flight crew and their overtime. They find endless ways to delay flights causing untold grief to flying passengers.

So, this is how the management’s myopic approach to saving money backfires on the company. In this case of United Airlines the price of this fiasco alone (not the spread effects cited above of the crews’ reaction to cost cutting, as that cost is incalculable.)

United may even go out of business as a result of this single episode.

So, what are some of the lessons from this most recent example of mismanaged customer situation? Here is my take:

1. The company must decide what it important to its brand: Customer Experience, cost, or something else. Once it decides on the priority it must communicate that clearly to all its employees with specific authorities given to its employees to empower them to deal with each situation with impunity. In this case if the airline had empowered its crew to compensate bumped passengers with a much higher limit (currently it is $1,350), someone would have volunteered. Delta Airlines last week authorized its senior crew to offer up to $10,000 to bump a passenger if the situation required it.
2. Employees must feel safe to error on the side of customer needs than they do on the side that benefits the airline (or the company). If they make a wrong judgment call they should not be punished unless they exhibit a pattern on abuse.
3. If cost cutting is paramount consult those on the front lines on how best to do it. I once talked to a bunch of flight attendants when I was consulting for a major airline and showed them what the management had in plans to cut costs. They simply laughed and told me that those measures would cost them even more because the management had not taken into account the intended consequences of those cuts (similar to the items in those three bullets above). Instead, they thoughtfully suggested to me the measures that would cut costs without ill side effects. After some research I found ALL their suggestions to be on spot and the airline changed its course after my presentation to its management.
4. When something goes wrong take immediate responsibility and disclose all the facts as soon as you can get them. On this front alone, United Airlines gets in “F.”
5. Keep an open line of communication with the front lines to stay in touch with the Customer Experience. Do not assume what experience you are creating. Ask those who see it first hand!

None of these suggestions require an MBA to appreciate and to implement. But despite that the United’s management gets an “F” from me and hope that other companies, not just other airlines take this learning to heart!