I consider Oscar Munoz one of the transformational CEOs I have worked with in my career. He understood early in his tenure at United Airlines that he had to take the relationship between management and staff to a completely different level. He worked to build trust with the work force instead of squeezing every possible concession from contract negotiations. He walked around and listened to his people, he observed the workplace and made the changes necessary to transform the business. He aspired greatly, and made United a top player in the category.
Edelman was the PR firm serving United for the five years that Oscar was CEO. He became CEO in 2015 when his predecessor was caught up in bribery allegations. He inherited a broken business, underperforming financially, failing in its employee relations, and losing its customers with a poor on-time record and surly service. It was five years since United merged with Continental, yet the Continental staff continued to wear their old uniforms and wrist bands, longing for the good old days. Oscar literally called our switchboard in Chicago, was patched through to Kevin Cook, then head of the corporate group, and we agreed to meet him the following Monday with a 90-day action plan to change the game.
In the first weeks of his tenure, he made a bold promise in a full-page ad in national newspapers. It stated clearly, “To our passengers, our fellow employees, and the communities where we live and work. Simply put, we haven’t lived up to your expectations. That is going to change. My singular mission is to engage our passengers and employees every step of the way. I want to hear and implement your good ideas. I promise to show that we’re listening and report on our progress. Proof, not promise.” He then went on a listening tour to Newark, to Houston, to Chicago, seeing mechanics, baggage handlers and flight attendants. Some of the interactions were grim, even aggressive. But the people of United heard a different CEO, one who came from a blue-collar background, was a self-made Latino determined to change the trajectory of the company.
Just over a month into the role at United, after a run along Lake Michigan, Oscar suffered a near-fatal heart attack. He passed control of the business to Brett Hart, general counsel, for two months of recovery, then came back to work, knowing that he would need a heart transplant, which happened in mid-January. Two months later, he walked into the annual leadership meeting surprising the 2,000 attendees. His lines are worth repeating. “The morning of my heart transplant, the executive team and I agreed that the North Star must be you, all of us, the people of United Airlines. We must earn the trust of every employee and that trust must cascade through the organization and to our customers. There is so much to do to better serve our passengers, but we can only do those things together, United.” A few weeks later, at a welcome back lunch with Oscar, we invented a catch phrase, the New Spirit of United, which went on the planes and service items.
Then came the ultimate test, United 3411, a flight from Chicago to Louisville on a Sunday evening. United needed to get two Chicago based pilots to Louisville for an outbound flight early the next day but the plane was fully booked. Gate agents tried to persuade ticketed passengers to accept a later flight through financial incentives to no avail. Then a computer algorithm was used to select the passenger to rebook; one of them was Dr. David Dao, who refused all offers to go later, and was ultimately dragged off the plane by law enforcement officials, bleeding. Video taken by passengers began to circulate on the web. United reacted officially on Monday morning, describing Dr. Dao as having been “reaccommodated,” saying that the airline would reach out to the passenger to resolve the situation.
Oscar took control of the situation on Tuesday morning. He communicated first with the employees. “The truly horrific event that occurred on this flight has elicited many responses from all of us: outrage, anger, disappointment. I share all these sentiments and one above all: my deepest apologies for what happened.” Then he went on ABC, where the correspondent asked him what he felt watching the video. “It’s not so much what I thought it is what I felt. The word shame comes to mind. I want to apologize to Dr. Dao, to his family and all the passengers on the flight…That can never happen on again on a United Airlines flight. That’s my premise and my promise.” His message to all stakeholders was simple, “We let policies and procedures get ahead of doing what’s right.” Process changes followed, including an increase for voluntary rebooking from $1,000 to $10,000 and an improved lost bag policy.
The real genius of Oscar Munoz is his early recognition of the necessity of a rebalancing of the labor management relationship from struggle to mutual understanding. He recognized the cost implications of higher wages for his unions but believed that he could earn the money back in more business class passengers and leisure travelers choosing United over other carriers as best in class. Walking through an airport with Oscar was like being with Mick Jagger (not that I ever had that experience), with United employees stopping him for selfies or to give him a hug. He was the head of the family, the cabeza in Spanish, not the boss or the “jefe,” bringing back the friendly skies to all of us.
Richard Edelman is CEO.