Our captains of industry (the kind of people Donald Trump loves to throw into government jobs for which they are completely unprepared) are really smart in so many ways, or they wouldn’t be so rich, right? The latest awkward exceptions are the Wells Fargo bosses who supervised a national enterprise of cheating retail customers, and Oscar Muñoz of United Airlines, who somehow contrived to be the last person on the planet to figure out that dragging [sic] a paying passenger off his plane so he could ferry four staffers to a location convenient to United was Not OK. Muñoz’ witless behavior is something of a surprise, because he has not spent his life in a privileged bubble; according to Wikipedia he was the first in his family to go to college, from a family of nine kids, and last year took off a couple of months from work to have a heart transplant. The man has paid some dues.
I would like to add to the ample discussion of this episode (see especially Helaine Olen’s piece enlarging the scope of debate beyond the case at hand) an insight I owe to my late colleague Robert Leone: Muñoz’ problem, and his lieutenants up there in the executive suite, have their feet nailed to the floor for two reasons. One is that they are actually not that smart, and do not understand their own cost structure. The other, and my main point here, is because they have no clue what it’s like to be one of their customers! They never fly Y class, or at least haven’t since that product became a hated, degrading, wretched experience in their hands.
American railroads went through an instructive period starting in the 1920s: their leadership was overwhelmingly “freight people” who systematically neglected passenger service because the ‘cargo’ of the latter expected to arrive on time, be kept warm in the winter, be treated respectfully by staff, and–on long trips–fed. That’s even more trouble than a load of cattle: who needs it? No hopper car full of coal ever complained about being rained on or left on a siding.
Bob was a scholar of the automotive industry, and I am now going to channel his insights about General Motors (and probably the other two bigs) back when Toyota was beginning to eat their lunch. GM executives mostly rose through the company for their whole careers and never worked anywhere else. Each year, the company delivered them a new GM car of the model appropriate to their status, and drove last year’s away. If the car needed service, a kid showed up with a loaner and took it off to be fixed or replaced. Among the standard duties of each was to drive his immediate superior back and forth to the airport, a gesture of servility pretending to be quality communication time. When they traveled, they were required to rent a GM car.
The result of this comfortable arrangement was that no-one running the company ever bought a car, had a car fixed, or drove a competitor’s product. They were completely defenseless when the quality revolution hit their industry, and had to go on their knees to ask Toyota to make Saturns in Fremont with them and teach them how to do their jobs.