United’s CEO Sets a Bold Direction Leading With Culture

Gustavo Grodnitzky Organizational Culture

I live in Denver, a United Airlines hub. As a result, I have flown over 1 million miles with United since I moved to Colorado in 2012. While I have not flown since March 12, 2020, I am very familiar with United and how it operates in Denver.

Every once in a while, a company gets on my radar and I begin to follow it. If I’m not working with the company directly, I look for any changes that are public domain and can be tracked through observation and public reports. The company that just popped onto my radar? United Airlines.

On March 20, 2020, Scott Kirby, after being president at United for three years, was elevated to CEO. Kirby recently sent a video to all employees that was covered by “Live and Let’s Fly,” an airline industry website.

One quote from Kirby’s video jumped out at me:

“[T]his culture change about customers is going to be the key to our success. Because we need customers to choose us, not just because we have the best schedule, not just because we have the frequent flyer program, but even when everything is equal, even when the schedule, even when the price are equal.”

I couldn’t agree more!

Competing With Experience

Kirby understands three critical points about culture:

  1. Yes, profits matter. Yes, metrics matter. Yes, KPIs matter. But most metrics that companies consider are lagging indicators of culture. Culture is the vehicle that improves those indicators.
  2. Leaders can’t be everywhere or see everything. Culture is how leadership scales its beliefs and the associated behaviors throughout the organization.
  3. Customers often decide what to buy emotionally, not objectively. When all things are equal (or close), customers will often choose their “favorite” rather than the “best.” You become the favorite of your customers by building a culture that includes and directly affects them. This is true of any industry, particularly those that are seen as commodities.

As much as airlines don’t like to consider it, many view their services as a commodity. They are in the business of moving people and freight from Point A to Point B, and price is sometimes the deciding factor.

But even in that environment, people will pay a reasonable premium for a better experience you can offer because of your culture. Moreover, if you try to compete on price alone, you are commoditizing yourself and your service. There will always be someone willing to do it for less and cut corners you’re not willing to cut. They will provide inferior service you’re not willing to provide.

Coffee is second only to oil as the world’s largest consumer commodity. Yet people pay a premium for Starbucks – because of the experience. Computer hardware (the Intel chip) is a commodity. Yet people pay a premium for Apple computers – because of the experience. My business is squarely in the speaking industry. It is a commoditized industry. Most people don’t care what I say or how I say it. They just care about how much my presentations cost. But my team and I strive to build a culture that provides our clients and audiences with an experience that will make us their favorite keynote speaker.

This same concept is also working for United Airlines. The pandemic has decimated the airline industry. At the lowest point, only 10% of passengers were flying when compared with the prior year. In addition, winter weather recently caused United’s worst-ever interruption in service. With these historic challenges, United’s Net Promoter Score (which assesses the likelihood that a customer would recommend your product or service to a friend) actually went up!

Keep your focus on culture, Scott Kirby. You will achieve what other leaders can’t imagine.

What are you doing to become your customer’s favorite?

I’d love to hear your questions and comments. If you would like to discuss this topic further, just drop me a note.

Let’s keep cultivating our culture, together!