He’s called the heartless bean counter, the tone-deaf numbers man who fails the basic empathy test. But I’d caution all of us to stop attacking incoming United CEO Scott Kirby before he even starts.
News of Kirby’s promotion was met by a chorus of groans from United frequent flyers, who fear an acceleration of customer-unfriendly cuts that will further disincentivize loyalty at United.
I don’t dismiss those concerns. In fact, I share them. During his tenure at United, we have seen cutbacks in domestic and international premium cabin catering, a disastrous “prosperity gospel” restructure of the employee bonus program, and despite some improvements, a devaluation of the United MileagePlus program.
Don’t think those are not at the front of my mind as he assumes this position. Furthermore, even if Kirby was the “brains” behinds United’s stellar performance over the last few years, he has not been the heart. Sometimes the best CEO is the one who can simply connect with workers, shareholders, and the public.
For all his blunders, Munoz has succeeded brilliantly in that regard. A great leader delegates and Munoz assembled a superb team, including Kirby, to transform United into a profitable powerhouse. In that sense, I see great wisdom in a head of state separate from the prime minister….a sort of good cop/bad cop approach that is certainly present in my own business and necessary in many venues.
As Munoz assumes the role of Executive Chairman, I hope he will continue to be the face of United, right down to cameos in the safety video.
Kirby Has Accomplished Much
But let’s talk about Kirby.
Give the man some credit for what he has accomplished over the last three years at United. In terms of building up United as an operationally-reliable airline with a growing domestic and international route map, he has performed very well.
I do not find comparisons between disgraced former United CEO Jeff Smisek and Kirby very persuasive, as Smisek pursued cutbacks and retreat from competition during his tenure. It was Smisek who abandoned JFK and many of the head-to-head routes with competition that are simply necessary for a network carrier to grow. Kirby’s approach has been the opposite: he has courted competition, challenging Southwest and American instead of ceding routes to them.
Furthermore, Kirby has invested in the premium hard product in a big way. Polaris retrofits are progressing ahead of schedule and new premium-heavy 767s demonstrate a willingness to cater to the premium market. He’s thinking outside the box and his strategy appears to be paying off.
Finally, though, I hope that Kirby has learned the importance of customer service. I’ve addressed this in two stories this year:
- United President Scott Kirby Addresses Customer Service To Employees
- United President Scott Kirby Reflects On Customer Service
He said:
So a lot of this is about empowering you to take care of customers and do the right thing for customers, but getting all of us to start to recognize that we’ve got to change how people feel and so that they feel like we care.
…
We’ve got to take some of that profit and reinvest in the product that we give to our customers to get people–as Oscar likes to say–not just choosing to fly United, but loving to fly on United Airlines.
Time will tell if that is just lip service, but I am going to give Kirby a chance before tearing into him. He’s going to be the CEO whether you like him or not.
CONCLUSION
Over the years, I’ve interacted with Scott Kirby in various settings. He’s always been cordial, though not very gregarious. That’s not a character flaw, but it is a concern as he enters a more public-facing role. But I will give him the benefit of the doubt, not because I trust him, but because of his overall record and recent language on service.
But I’ll concede this. I was wrong (totally wrong) about Jeff Smisek. Over nine years ago I wrote a story entitled, “Why I’m Optimistic about Jeff Smisek Leading United Airlines“. I was just a kid then, but I could not have been more wrong. Let’s hope I am not equally blind in this case…
Why don’t you describe some success criteria which you would use to say”this was a good CEO” and then revisit them in two years and see whether or not he meets those criteria you set back then?
That’s a very good idea Michael. I’ll do that in a future post.
I think he learned after seeing some of the spreadsheet only decisions from Smisek that there are things that don’t reflect directly on the balance sheet. While he is still a numbers guy, he has started learning that numbers aren’t the whole story. They can tell a lot, but you sometimes have to look for the connections that are not visible(JFK).
@Michael- well said
In the eyes of flyers: Kirby is the worst nightmare one can ever imagine. Let’s name a few changes he made to ensure “more for customers”: Dynamic reward ticket, e.g. reward ticket can require the ridiculous number of MileagePlus miles. Upgrade from 1GSU to 60 PlusPoints (1.5GSU, and trust me I can give you example).. everything is “more” for customers
In the eyes of investors: he is the GUY. But be careful Kirby, you changed so much and flyers talk and notice that. If flyers are unhappy, they will give business to other carriers. Route cut, layoff, No revenue for United… but you’d be okay with a retire package they have for you
All they have to be is better, or even the same, as their main competitors. All of their frequent fliers are frequent for a reason; they’re not all of a sudden going to start taking the train.
“….a sort of good cop/bad cop approach that is certainly present in my own business…”
Are you the good cop? 🙂
For sure.
Matthew, I agree with you 100%. While I also cringe at what could be coming, I think it is wise to be optimistic … if only because it’s a better way to live one’s life, I think. Because of the experiences he’s had, this isn’t the same Scott Kirby who first joined the airline. Maybe he’s learned a few things … and it’s not like his support system is totally going away. The situation could certainly could be (and has been!) worse.
I also like the idea of coming up with a few metrics by which to judge Kirby’s tenure as CEO.
The impact of a single CEO is overrated – much in the way a single president is
What goes on in Congress and the timing of economic and geopolitical fortunes drives more of it
Smisek got dealt the toughest hand dealing with those UA unions
Now Kirby will hope he doesn’t get dealt a hard corp travel downturn
I agree that the impact may be overrated, but Smisek is greatly to blame for the sorry state he left United in. Leaders do matter. Character does matter. Vision does matter.
Not to mention what Tilton did before the sale. CEO’s can have a huge impact.
It’s a bit disingenuous to say that he has earned your respect when in fact you’re simply wiping the slate clean and not relying on your previous convictions. It takes a lot for someone to earn my respect.
He’s earned my respect for his tremendous performance in bucking analyst recommendations and pursuing growth, quite successfully while improving operations at the same time. There’s no respect for eliminating a FA position, slashing bonuses, or cutting the onboard premium product.
“Furthermore, Kirby has invested in the premium hard product in a big way.”
Sure, but at the same time, he (or Munoz?) has been cutting back on the premium soft product in a big way, too. What’s left of all the Polaris onboard improvements that were introduced? Half of the premium bedding? Didn’t he also cut down on cabin crew? That’s part of his track record, right? Hardly seems promising…
@Matthew, oops, I see you already mentioned that in your reply to @Jeff and I must’ve missed the link early in your post.
No problem. It is indeed a concern.
I agree Kirby isn’t a good thing for frequent flyers looking to use those miles responsibly. Just look for any International b-class award seat availability on United metal, even close departures. Plenty of open seats, but very few if any available for saver award fares.
Premium heavy cabins might be fine but on the last century 767? Come on.
At the same time United are defering their A350s with the truly premium cabin aboard.
For me all the US carriers except perhaps Delta and Jet Blue remain third world until they get up to date.