Emergency Plan…Pizza and Beer
Many of us watched recently as Delta Airlines cancelled hundreds of flights day after day. Thousands of Delta’s passengers were the victims of these cancellations, waiting stranded, some for days. Delta initially said they grounded flights due to a utility electrical failure. I felt sorry for the passengers and at first I also felt sorry for Delta for experiencing a major problem seemingly beyond their control.
My sympathy for the company disappeared when I read two articles which covered the story in the August 10 Wall Street Journal. They showed that Delta misled us about the reason for the failure and stranded passengers due to their own misguided confidence in the reliability of their operations.
Georgia Power, the utility providing power to Delta’s Atlanta headquarters where the problem occurred, announced that there was no power failure. Delta’s throwing them under the bus understandably made them push back with the facts.
It seems that a module failed in Delta’s system leading to a power surge and cascading system failures. Their emergency back-up systems failed to kick in and the problems intensified.
Ed Bastian, Delta’s CEO, finally admitted that in spite of “investing hundreds of millions in technology infrastructure upgrades and systems…the network essentially crashed.”
I understand that incredibly complex systems sometimes break down but don’t understand why the immediate message was “it’s someone else’s fault”. I’m also confused about how you can spend hundreds of million dollars on the system that is the heart of your global operations, and have such poorly designed and tested emergency backup systems. Without additional redundancies in place, just in case.
I do give Bastian credit for rapidly releasing the correct reason for the problem and taking responsibility when they figured out what it was. But about those stranded passengers…
The fiasco uncovered another troubling decision Delta made.
They dropped their interline agreement with American Airlines…the largest US carrier…due to disputes over fees and other matters. Interlining is the agreements airlines have in place with each other to carry other airlines’ passengers when there are flight cancellations and delays. Seems Delta’s executives were so confident in their operations that they didn’t feel the need to keep this interline agreement in place.
Bad decision.
Worse decision: Delta had been celebrating a good streak. They have had “the best operational record among major network airlines over the last few years.”
A period of things going well caused them to think their good fortune would go on forever. They figured they’d make some extra money by ending the discounts they were giving other airlines when carrying their stranded passengers. They didn’t do what they needed to do to ensure their emergency backup systems were functioning perfectly…and perhaps put a secondary emergency back-up in place just in case.
Complacency and placing revenue and profits above emergency preparedness hijacked sound business judgment.
The result? Massive global system failure. Hundreds of cancelled flights. Thousands of stranded passengers. A public relations disaster. Millions of dollars lost.
Trust in Delta and those in charge…lost.
One of the most important accountabilities of the CEO and senior management is ensuring preparedness for emergencies. Delta’s emergency plan? Crews ordering pizza and beer for passengers stranded in planes for hours.
Update: After scheduling this story but before it was published CEO Bastian issued additional comments also chronicled in the Wall Street Journal.
“There is nothing endemic to make us believe we’re at risk, “he states confidently.” How can he possibly know this within a few days of a global meltdown? Especially since he then says Delta is still investigating what went wrong.
Then he admits that when they rebooted, the system didn’t come back as smoothly as hoped. Hoped? Didn’t they test their emergency procedures and make sure they would work?
And yet, he still confidently tells us he doesn’t believe Delta is at risk for this to happen again. But then, he never thought it could happen this time.
Bastian also mentions that “we realize we’ve let our customers down” and added that the situation took a toll on Delta employees. A toll, I would add, that they bear due to executive complacency.
Bastian deserves credit for almost saying correctly something CEOs these days rarely have the courage to say “This is our responsibility. The buck stops here.” Almost because the best CEOs actually say “I take responsibility. The buck stops with me.”