David J. Danto
Business travel thoughts in my own, personal opinion
How much is a lot of money? That seems to be the central question of much of our lives right now. If you make $100K a year is that a lot? What about $500K? What about $5 million? Trying to define ‘a lot of money’ is like the child’s riddle of “how high is up.” When we don’t have even loose life standards for what is ‘comfortable’ and what is ‘wealthy’ we get into the situation we’re in now, where a very small percentage of people have amassed most of the planet’s wealth – a phenomenon referred to as wealth inequality.
What does this have to do with airline travel? Well, a lot really. Most corporate entities have become slaves to their stock price. The linkage between doing a good job / making a good product and company success is strained almost to the point of nonexistence. When senior management people are compensated by stocks and stock options, and when there is no upper limit for ‘being well compensated’ then what develops is a tremendous, evil dynamic of doing anything and everything to drive stock prices higher.
In the airline industry, we frequent travelers have experienced the results of this over the last few decades as the greedy people who run the US airlines continue to “make the pizza cheaper” so they can reap the rewards of higher stock prices. ‘Screw the passengers experiences or the quality of the service or the adherence to a schedule…make everything cheaper so we can raise the price of our stocks and hoard more money.’
So, in this toxic environment, what happens when the drive to raise the stock price conflicts with passenger safety? The answer 100% of the time is that people unnecessarily die.
There is a new documentary on Netflix right now called “Downfall – The Case Against Boeing.” If you haven’t seen it yet you need to stop what you’re doing and watch it now. It is a clear presentation of how the culture of corporate greed is directly responsible for hundreds of deaths. There are so many damning quotes and details from this documentary that I couldn’t possibly fit them into this one blog. (Really, stop reading now and go watch it.)
Some of the key takeaways:
· When their firm management changed the culture from one of engineering/product excellence to one of increasing stock prices at all costs, they set themselves up for inevitable disaster.
· When decisions are based on Wall Street’s perceptions instead of the customer’s experiences, and employees are told ‘not to identify or document issues’ then the product isn’t more valuable – it’s actually more flimsy and risky to success and profits.
· When the first 737Max crash happened killing 189 passengers and crew, and internal Boeing experts most assuredly knew that it was due to their product design, greedy firm management did nothing to own or admit to the problem. Their greed pushed them to cover-up the issue and instead disingenuously blame the pilots, actions which were the direct cause of the second 737Max crash killing another 157 people.
· Early on, an investigation discovered that the 737Max would be responsible for about 1.5 fatal crashes per year – and that was OK with the company management, who disputed the harm of the estimate instead of admitting the seriousness of the problem.
How do we fix the overarching issue in society? Well, I’m not really sure, but it is clear that service industries should be judged on how well they provide services, not how much money they can make for investors. When that service requires excellence…or lives will be lost…then there should be an environment of regulation that ensures greed doesn’t have an over-the-top effect on process.
I also believe there should be caps on management compensation by stocks and options. I think its fine for private individuals in a free society to invest whatever they want, and make (or lose) however much money they want. But I don’t believe that corporate executives’ compensation should be tied to stock prices, as clearly that will then become their overwhelming driver – to the detriment of quality, safety, experience and all the rest. If there were a limit on how much any executive could collect via a rising stock price then they would likely not cut as many corners solely to enrich themselves. A Chief Executive Officer should be an individual who does the right thing all the time, not someone who does the thing that further lines his or her pockets all the time. I realize this is not an easy (or likely) fix but it becomes easier to understand and do after you’ve watched the Boeing documentary and understand the story of how greed unapologetically killed 346 people.
Or, perhaps, think of it another way. If the CEOs of American Airlines, United Airlines and Delta Airlines were compensated based on the results of customer satisfaction surveys instead of stock prices, can you imagine how much better the flying experience and airline employee experience would be? That is an alternate timeline I’d love to be living in. How does one get into the multiverse again…
This article was written by David Danto and contains solely his own, personal opinions.
All image and links provided above as reference under prevailing fair use statutes.
As always, feel free to write and comment, question or disagree. Hearing from the traveling community is always a highlight for me. Thanks!