Thinking Smart by Nirmalya Kumar

Author:Nirmalya Kumar
Language: eng
Format: epub
Tags: null
Publisher: HarperCollins Publishers India
Published: 2018-12-09T16:00:00+00:00

CEO: Judgement Is All You Have

For me, the largest failure was on the part of the CEO of United Airlines. To become a CEO, competence is the price of entry. It is assumed that he or she is competent. What really matters is judgement. The only issues that should appear in front of the CEO for his or her decision are what remains after all processes have failed in the company and idiosyncratic situations for which no process exists.

Clearly, Oscar Munoz is not personally responsible for the service failure. But he does own the responses to the media and employees from his office. And, his first responses on both fronts showed a terrible lack of judgement. His initial response was to praise the employees for doing the right thing in an internal memo. An apology from him on behalf of the airline did not come until two days later in the face of a public relations disaster and worldwide ridicule.

What defines ‘competence’ differs by job, as does the relative mix between following the process and exercising judgement. Frontline staff mostly follow process. It is where companies ‘manufacture’ service. CEOs mostly exercise judgement, while police officers come somewhere in-between. Competence for a CEO is not defined, unlike for frontline staff, by how well he or she follows the process, but by the judgement that is exercised. The poor judgement of United’s CEO had an adverse impact on the company’s image and employee morale.

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