Did you notice something about the pair of recent United bad publicity stories? Not a word from United President Scott Kirby.
I believe that was strategic. CEO Oscar Munoz emerges from these events (the leggings incident and UA3411 incident) tarnished. Even if it was Kirby himself who encouraged Munoz to initially blame the Dr. Dao, Munoz took all the blame. Although the Board of Directors expressed confidence in Munoz’s continuing ability to run United, a seed of distrust has been planted. Munoz’s credibility and discernment nosedived in the court of public opinion. The new corporate culture he has worked hard to build at United has been called into question. He also has a bad ticker.
Now news has emerged that Munoz will not automatically become United’s chairman next year. His contract promised him that, but Munoz allegedly “initiated” the change, removing the guarantee. He was set to become chairman this year but that was pushed back due to his heart transplant.
In a public filing, United stresses the separation of powers motivating the change.
The Board believes that separating the roles of Chief Executive Officer and Chairman of the Board is the most appropriate structure at this time…Having an independent Chairman of the Board is a means to ensure that Mr. Munoz is able to more exclusively focus on his role as Chief Executive Officer.
That makes perfect sense to me. It also makes sense that the Board would be cautious in light of Munoz’s health scare. But I also see the move as an act of corporate discipline. Even if Munoz voluntarily relinquished the future role, it reflects a change in opinion over his status that renders him less powerful.
Kirby Waits in the Wings
Meanwhile, we have not heard a peep from Kirby. He did surface in a closed-door meeting with employees expressing regret the company abandoned JFK but no interviews or public statements concerning the controversies. I’m thinking out loud, but it would not surprise me if the usually opinionated Kirby was instructed to remain mum. No matter what he would say, speaking out would anger one side. By remaining silent, he offends no one. It also positions him to be a unifying voice should he be tapped for CEO duties sooner than expected.
CONCLUSION
While it does appear that Munoz will weather this storm, Kirby is waiting in the wings. His reason for leaving AA was tied to a waitlist for the CEO title too long to clear. While he might not become United’s leader overnight, Kirby is positioning himself through these horrific customer service mishaps to be that next leader. Remaining insulated from the wrath of public scrutiny gives him a great basis for asserting why he should lead United.
Hopefully Kirby’s GPU to CEO has a better clear rate than all of mine.
Good analysis. I find it a bit distasteful that Kirby would be lurking in the background like some conniving buzzard, but then again I sadly find many actions of domestic airlines distasteful, so it could just be viewed as par for the course. Also, as you stated, Kirby didn’t just jump ship for the fun of it. I just hope he has to wait an awful long time to gain the top position, since whatever problems Munoz may have had, he’s at least trying to move the airline in a positive direction. With Kirby, that would be much less certain.
UA completely abandoning JFK was dumb. Munoz doesn’t seem all that bright to me with the handling of these incidents. The ONE thing as CEO you need to do is make things right when they go wrong. He has no idea how to do that. Once one of your employees messes up, you do whatever it takes to make it right. You don’t blame the customer, then wait two days to say you will make it right. You try to fix it immediately. Munoz will be out eventually and Kirby will step in.