Launch of @United Falls Short

In March 2011, United and Continental Airlines began planning their merger into United Continental Airlines.  The official merger launched on May 18, complete with new signage and a “Customer Day One” campaign at Chicago O’Hare to bring excitement to the day.  As with most “change” and “transition”, there were bound to be bumps in the road along the way.  As blogger "Flying With Fish" reported here: http://bit.ly/ki6Viu there is a major social media oversight in their planning.

Historically, United Airlines and Continental have successfully used their @UnitedAirlines and @Continental accounts to quickly respond to customer tweets, promote giveaways and new flight information, and promote their public relations pieces such as their earth day giveaway.  The impressive and shocking information is that @UnitedAirlines had 195,972 followers and @Continental had 145,884 followers.  Now what was the blunder?  Neither @UnitedAirlines or @Continental are being used post-merger.  Rather than renaming one of the two accounts previously held by the two airlines (as easy as adjusting a setting in Twitter), on May 18, a new account @United was launched.  That’s right, 341,856 followers left on the table. Twitter would not allow the accounts to be merged, thus, a decision would have had to be made.   Rather than making that difficult decision of selecting which account to update with a new name, United Continental chose to avoid the conflict altogether. 

Maybe it isn’t fair to say “341,856” followers were left on the table, maybe a more accurate number would be “195,972” or “145,884”.  Additionally, since the launch of @United, neither of the previous accounts have been deactivated or heavily utilized to transition customers to follow @United.  Because this is a “fresh” situation, it’s difficult to say exactly what organizational error caused this, but here are a couple speculations:

1.    Lack of Consistency.  I don’t want to undermine that mergers are hard, but the twitter failure does not align with the plan.  United Continental has released plans to merge the two airlines down to the new on-board beer selection and coffee lines, but failed to integrate a comprehensive plan for their Twitter presence.  Align your social media presence with your corporate image, if you are going for a seamless transition, plan for it. 

2.    Someone didn’t speak up.  Between the two marketing, public relations, or customer relations departments-someone (maybe lots of people) did not speak up to point out the time, money, & effort it took to reach 140,000+ followers for each airline.  How could this have been avoided?  Beyond the use of common sense, it is important that especially during times of great change, open communication and constant feedback are being sought within the organization.  Maybe the “someone” that foresaw this blunder was an intern, not sure if his opinion would matter…make sure that intern feels empowered to speak up @United. 

Marketing-wise, there are two things that could have or could still be done:

1.    Pick one!  Pretty self-explanatory, but pick one to change the name and launch a campaign to the second one with an apology for the inconvenience & find a way to promote-now that choice isn’t really an option-do #2.

2.    Soft Transition.  Once the decision to launch @United was made, it is wrong to assume 341,856 followers will move in one tweet.  You need to launch a campaign to move your followers over time.  This isn’t going to happen overnight and will take some work-but not nearly as much as finding 340,000 brand new followers. 

Although Social Media is a relatively new concern during mergers, it is no less important in establishing a new company culture and online image.  United Continental can still save something of the situation, but they need a plan and action to start soon.  Would you have made the same decision as United Continental?  Or, would you make the same decision with a different plan of action? 

-Kelsey Umbarger

Decision-Making Systems Give Benefits to Managers

In late 1970s, a new idea emerged from academics who worked with applications of information technology. Fortunately, decision-support systems involving the use of complex computer algorithms to support and enhance human decision making helps managers report, analyze, and interpret data rather than execute business decisions. The concepts of numerous kinds of decision support capability basically is that a computer program would churn through data and with human interpretation would reveal previously hidden trends and patterns that would allow an executive to make smarter and faster programmed decisions.

However, initially, there were some issues resisted the development of this new approach. Such as the notion of computer-augmented decisions never really exploded like some other categories of computer software since it often was difficult to extract decision rules or algorithms from human experts. Also, these systems are very complex, and typically only a few people in an organization can understand and work with them. So, the shortage of managerial time and analytical expertise caused the rise of automated decision making. These new systems came about not only because technologies have matured, but also in response to business needs.

Perhaps, although many executives may somewhat doubt the type of the computational decision making ability but rather prefer to rely on gut feelings or other traditional approaches to make decision, the automated decision-making systems and processes can still involve some human review along with adopting the rational decision-making model. A physician, for example, either initiates an order following the system checks or is able to override the recommendation of an automated protocol. Patients are safer when an automated system need to combine with physician knowledge and rational professions. As a result, while adopting computer systems to make important decisions, both implementing the decision making systems as well as human involvement checking can expectedly reduce as many mistakes as possible. Ultimately, the company will benefit not only by extracting the rules into a common rule base but also by integrating automated decision-making capabilities into workflow and transactional applications while maintaining a separate rules base.

Yin-Chin Huang

Publish Post

Referent Article Source: Harris, J. G. and Davenport, T. H. (July 1^st, 2005) Automated Decision Making Comes of Age. MIT Sloan Management Review.

“What went wrong with Cathie Black”

http://blogs.forbes.com/frederickallen/2011/04/08/what-went-wrong-with-cathie-black/

A recent article of April 8, 2011 named “What went wrong with Cathie Black” talks about the newly appointed New York schools chancellor Black, who was dismissed by Mayor Michael Bloomberg of New York after her three months holding the position. The explanations of what went wrong has broadly fallen into tow camps: inexperience and personality.

To start with, I should mention that Black proved herself as being a top notch leader. Her record of success as a President of USA Today, The Newspaper Association of America and then Hearst magazines as well as her contributions on the boards of the Coca-Cola Company and IBM attest to that.

Despite of the fact that Cathie Black was quite a successful leader in business realm and was motivated to succeed in her new job, she could not fit the realm of public sector. One of the main differences in the leading government and private sectors is that leadership in government requires diplomatic skills, which leaders can often get by without in business. It is obvious from the mentioned article, that she had a lack of the required skills. Let us look inside the issue more deeply.

First of all, in her previous positions she was used to actively participate, make decisions, control the organization as a whole in a different way than she was required to do while working in public sector. Secondly, she was used to communicate differently with others, differently solving conflicts, rewarding her staff for good performance, and she was required to change her ability, skills, attitude toward the routine on a daily basis facing the problems of the NYC schools. Thirdly, probably she failed while trying to understand the culture of the local community of how people see each school's goal. Those views, the whole environment might have been different from what Black was used to. As a result, after just three months of working she was dismissed by the Mayor who appointed her to the current position and hoped she would would have been a great fit to the organization.

Tamar Khechoian.

"Bay Of Pigs" Invasion and Cultural Diversity

"We can try to avoid making choices by doing nothing, but even that is a decision.”

I just love this quote because it talks about decisions that we make every second in our lives. We will face decisions be it at personal level or professional level. There have been numerous examples in organizations that one would not never want to emulate.

Lets talk about history. Scared? Don't be. My focus here is on something called Group think that drowned many people and how USA suffered a defeat in hands of Group think in the past .The question is: Are two heads better than one? Its not just Leaders who make the bad choice but one whole team can also make a bad decision and the organization will have to suffer the consequence of it.Our textbook talks about various symptoms of groupthink like illusion of invulnerability,collective rationalization etc. One of the case that I read about is the popular historical event 'Bay of Pigs' invasion which was a unsuccessful action by CIA trained force to invade southern Cuba. Launched in 1961, it was a failed operation as reported and it was unsuccessful because the team did not realize early that the chances of success are really bleak. As Dr. Sheep rightly said in the class that if you does not question anything and everyone agrees on it then there is something wrong with it. No one felt and realized that the decision is wrong and they had inadequate aircraft, lack of ammunition. CIA Report says that there was an insufficient involvement of leaders. Which is surprising to me, because a leader is an essential part of the team which guides and takes responsibility of the team and there was no involvement of leaders. May be they felt it was a wrong decision or may they were too lazy to participate or they might have thought (Hm mm its just Cuba, why need leaders when my team is more than enough) that is called overconfidence bias.

Another thing that went wrong was poor internal management of communications and staff. Open Communication is really important while taking such crucial decisions and if there is a gap then the result is as you see USA lost to Cuba. Cultural Diversity played a vital role here as there were no spanish speakers in the team i.e. team was not diversified enough to provide opinion on what might get wrong and hence they were not able to understand/interpret what was going on in Cuba.

Assessing risk in an organization is very vital.To take or not to take risk is the task that makes the team and leader think deep into the situation. In this case, there wasless leader involvement and according to CIA report they failed to assess risks and didnot communicate information effectively. There have been numerous examples in the history on the same track like Vietnam War, Hostage rescue in Iran (Operation Eagle Claw) etc. There can be a cure to such kind of failed groupthink. Firstly, the leader should assign various roles to the members of the team, outside experts should be brought in who can challenge the thoughts and opinion of team members, atleast one member should become the devils advocate so that he can question assumptions and plans. One of the techniques which is very interesting is 'Nominal Group Technique' in which it is made sure that all members participate fully.It is important when members are struggling with problem solving or idea generation.

I talked a little bit about cultural diversity in the 'Bay of Pigs' Invasion.Let me shift my focus from history to whats the latest. As I am an international student, Cross culture Business is a very interesting topic for me as a whole. There have been many blunders related to cross cultural business or awareness. It is amazing how cultural ignorance can lead to negative consequences on a large scale. One of the examples of this blunder is what American Motors tried to do with the name of its new car, the Matador. However in Puerto Rico it means killer due to which it became highly unpopular in certain area. Now though a small example but this can be a huge blow towards an organizations reputation. Probably they should have researched more into the market.If they would have had a diverse team working on the project, it might have struck to them at that stage then later when the product has been launched. Numerous examples are there on the same line like Pepsi introduced their slogan into Chinese market "Come alive with the Pepsi Generation" translated into Chinese it read "Pepsi brings your ancestors back from the grave". Honda, McDonald's, KFC, Mitsubishi Pajero did the same mistake and suffered losses.

Fed Ex faced a huge blow when it wisely chose to expand overseas. They failed to consider cultural differences. In Spain the workers preferred late office hours and in Russia workers took truck cleaning soap due to consumer shortages. FedEx was finally shut down over 100 European operations and lost $1.2 billion. Isn't it amazing how lack of diversification can affect an organization at such a huge scale? If they would have done proper analysis before entering a particular market they would not have failed badly.

Sheena Bedi

Welcome to Business Blunders!

Welcome to the Business Blunder Blog!  This first post is simply an introduction to bring readers into the “loop”.  Everyday businesses large and small make decisions, implement new strategies, or continue past strategies.  Some of these decisions and strategies are successful, many are not.  Our focus is to highlight the failures of businesses in current news, analyze the situation, and ideally make suggestions to avoid making the same mistakes.  Rather than focus on the failures, our focus is to help readers stay away from these “business blunders”.   Thank you for joining us-please visit again soon, our first posts are coming within the week.

Authors:  Sheena Bedi, Yin-Chin Huang, Tamar Khechoian, and Kelsey Umbarger