UNITED DEBACLE A LESSON FOR GOVERNMENT CONTRACTORS
While it’s tempting to add to the litany of United jokes coming from all sides this week, there are, in fact, real take-aways for government contractors. One lesson is that companies that cut too many corners can find that the long-term expense is far, far greater than if they’d committed the right resources the first time. In United’s case that means using better trained and better compensated personnel, and ensuring that management assets appropriate to situation are always on hand. Consider that United’s stock price only closed with a net loss to the company of $250 million the day after the incident broke. Add to that PR costs, lost credit card revenue, lawsuits, refunds to the passengers on that specific flight, and the huge distraction requiring the attention of senior executives who should properly be running the airline, and the total economic impact is easily double that. That money buys a ton of better-trained and properly managed workers.
Another lesson is to never allow your people to get too caught up in a specific moment. United flies thousands of flights every day, yet this one incident on one flight became the proverbial tail wagging the corporate dog. Contractors want their employees to be dedicated to the missions of both the client and the company. Too narrow a view of what that means, however, can have an outsized negative impact. Not only can that hurt existing business, but opportunities for future business, a lesson United is now having to learn the hard way. Like United, contractors, too, can find themselves dragged before Congress to explain what went wrong.
Perhaps the best bottom line from this incident is that if you haven’t trained all of your people on ethics, standards of behavior, working on client sites, etc., it is time to do that now. Training can take time, cost money and put a temporary dent in productivity. Better that, however, than to be tagged with a line like “You have to fly United? What a drag!”