Don’t Blame The United Airlines CEO for Outdated Business Practices: Airline Corporate Culture To Blame

United Airlines, (UAL) CEO, Oscar Munoz has taken a beating on social media lately. On Sunday, April 9, 2017, a passenger was forcibly removed from an overbooked plane leaving Chicago’s Ohare International Airport.

The footage was posted on social media and the video went viral. As a result, United Airlines stock dropped 4%, wiping out a 500 million dollar market cap.

Initially, Munoz and his team, defended the United Airlines team, stating that his company was investigating the incident and that his employees went “above and beyond.” Munoz said he was “upset” to hear about the news, but that the “facts and circumstances are still evolving, especially with respect to why this customer defied Chicago Aviation Security Officers the way he did,” according to AP.

Audra Bridges, a Louisville inhabitant, posted the video on Sunday night to Facebook and gave her record of the flight Sunday night. Travelers were told at the entryway that the flight was overbooked and United offered $400 and a lodging stay. According to Bridges, not enough volunteers stepped forward and the offer was expanded to $800. Still there were not enough takers. At that point, Bridges stated, an administrator got on the plane and said a computer would choose four individuals to be removed from the flight. One couple was chosen first and left the plane, she stated, before the man in the video was approached by authorities.

I don’t personally know Munoz. We both share the same MBA program at Pepperdine, but beyond that, we don’t have much in common.

But, I think there is more to blame than to simply toss the CEO aside. We live in a free marketplace. United’s agreement of carriage gives them the capacity to continue expanding its offer cost until it got enough volunteers.

If United had increased their offer, eventually, there would have been a point within the market where several passengers would rush to surrender their seats. Whatever that price is anyone’s guess: It could have been $1,000, $2,000 or even $5,000. But what we do know from basic economics is that there would be a price point that would get the results.

The U.S. Department of Transportation said it is reviewing the incident. “While it is legal for airlines to [involuntarily] bump passengers from an oversold flight when there are not enough volunteers, it is the airline’s responsibility to determine its own fair boarding priorities,” the DOT said in a statement.

I agree that the CEO should be held accountable, but I also believe the short – sighted, outdated business practice of ejecting passengers with some airlines needs to be re-examined.

It is a business practice embedded into the airline industry’s culture.  JetBlue Airways promotes that it doesn’t overbook flights, yet the carrier still saves the privilege in its agreement.

Delta Air Lines considers check-in requests and loyalty status, and which traveler is selected to sit in. The airline  transporter says it makes special cases for individuals with disabilities, unaccompanied minors and individuals from the military.

American Airlines says it denies boarding based on order of check-in, but will also consider “severe hardships,” ticket cost and status within the carrier’s loyalty program.

Social media is not going anywhere. Airlines and corporate culture need a basic review of economics.

Pay the price now to ejected passengers or risk of having PR fiascos, and falling stock prices.

Shark Tank’s Johnny Georges Inspires A Shark To Invest In His Tree T-Pee Business

“When good people come together for a noble cause , great things happen.” –Johnny Georges, Tree T-Pee Founder

Who says business is cold and cruel? In fact, I would argue that great businesses are not cruel at all. The great businesses Serve. And they Serve Well.

In the world of free markets, some have said that money or profits is merely a by-product of the work that is produced. In other words, the more people that are served, the greater the profits.

Shark Tank is a TV show produced by Mark Burnett, the producer British born Hollywood producer of Survivor, The Apprentice, The Voice, The Sing Off, Shark Tank [Wikipedia]

The premise of Shark Tank is that business owners and entrepeneurs pitch their idea or business to a panel of sharks. The sharks invest their own money in exchange for a piece of the business.

The “sharks” often find weaknesses and faults in an entrepreneur’s concept, product, or business model.  Some of the shark investors such ass Kevin O’Leary,  can be brutal and show no patience even for tales of hardship.

In this episode watch Johnny Georges pitch his business to the Sharks. It shows that doing business for a just cause can be profitable.The Tree T Pee is a water containment system that saves water, protects trees from frost and grows stronger trees.

The Shark that partnered with Johnny is John Paul DeJoria, who just came to Shark Tank as a guest Shark.

Khan Academy

Khan Academy is a non-profit educational organization created in 2006 by educator Salman Khan to provide “a free, world-class education for anyone, anywhere.”

The organization produces micro lectures in the form of YouTube videos.  In addition to micro lectures, the organization’s website features practice problems and tools for educators. All resources are available for free to anyone around the world.

Watch The 1% Challenge Occupy Wall Street Protestors–How Peter Schiff educates misguided people at occupy wall street.

 

Peter Schiff is host of The Peter Schiff Show, an audio show broadcast on terrestrial and internet radio and was formerly host of an internet podcast called Wall Street Unspun now archived as podcasts.

Schiff acquired significant internet fame for correctly predicting in 2005-2007 the collapse in U.S. housing prices that would occur in 2008 and the global financial crisis that would ensue. In 2010, Schiff ran in the Republican primary for the United States Senate seat in Connecticut, but lost to Linda McMahon.

Schiff is known for his bearish views on the US economy and US dollar, and his bullish views on commodities, foreign stocks and foreign currencies. Schiff also voices strong support for the Austrian School of economic thought, first introduced to him by his father Irwin.[1] [1] Wikipedia, Peter Schiff, http://en.wikipedia.org/wiki/Peter_Schiff

The 7 Layered Cake of Marketing

“Business has only two functions – marketing and innovation.”
Milan Kundera

If you own a business, manage a business, or want to start a business, you need to know marketing.

Good marketers study their products or service and understand marketing.

Great marketers study their clients, adapt and refine their product or service so it fits well with the client.

The great marketers also utilize all 7 marketing mediums.

If you can use all 7 mediums, I promise you will see an increase in traffic, conversions and sales.

Let’s start briefly discussing the various mediums and how you can begin to use one to feed off another.

The 7 different marketing mediums are as follows:

1. Internet

2. Television

3. Radio

4. Trade Shows or Seminars

5. Direct Mail

6. Sales People or (telemarketing)

7. Print /and or Brochures and Promo Pieces

So, the key is to use all 7 to feed off one another.

For example, a targeted, tracked and tested online advertising may have a “call to action” for the client to call inbound to a call center where #1 would leverage #6.

Another example which is common is to have the client go to a website following a radio or television commercial.

These strategies work. And the more you can use the strategies the better off you’ll be.

Here is a quick example of using 5 marketing weapons.

The Call to action is for the client to call inbound to a call center after they’ve heard a radio commercial.

Once the operator answers (inbound calls are so much easier than outbound calls) the operator can ask the client if they would like a free brochure and quickly tell them the benefit of this brochure and instant coupon.

Now, the company has the client’s name and address, the company can include #7 and have a printed call to action for the client to logon to the company website to learn even more information.

After a few days, the company can thank the company and start with a direct mail campaign and invite the client to a free trade show or seminar.

Its very powerful.

The problem is most companies focus on one or maybe two of these strategies and become complacent (me included)  Get creative, track and test your efforts.