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Turning Chapter 11 into Chapter 1

Posted by: Richard Levick | Oct 30, 2008


Turning Chapter 11 into Chapter 1

  “Over-communicate in a crisis” – Jack Welch, former CEO of General Electric. 

When United Airlines was forced to file for bankruptcy in December 2002, this sage advice served as the centerpiece of the company’s efforts to revive one of the most well-known and respected brands in the world.

On the same day that United filed for bankruptcy protection in federal court, CEO Glenn Tilton flew to Chicago’s O’Hare International Airport to explain the company’s decision to customers and employees face-to-face, rather than through an impersonal news release. Other United executives made similar trips to Denver, San Francisco, Washington, D.C., and other cities in the U.S. to assure key audiences that the airline was still viable and put a human face on what could have been perceived as just another cold corporate entity.

In a prepared statement, United said its operating schedule would not be altered, the frequent flyer program would continue, and that “United Airlines will continue to provide customers with the same experience and level of service they have come to expect.”

And the following day, United actually took out full-page advertisements that addressed its bankruptcy in major newspapers around the country. The headline featured the words “Chapter 11” with the second numeral scratched out. The message was clear. This wasn’t Chapter 11. It was Chapter 1 – a new beginning from which the embattled airline would emerge more efficient, more productive, and more profitable.

United did indeed emerge from bankruptcy in February of 2006 with a stronger financial foothold in the marketplace than before – thanks largely to the fact that United executives understood the importance of controlling the story from the outset. They didn’t hide from the spotlight when times were at their worst. They “over-communicated.” They got out in front of the bad news – making the hot and anticipated story one of imminent comeback, rather than impending liquidation.

In crisis, our natural instincts tell us to run from the light, rather than towards it. As Jack Welch and United Airlines so eloquently demonstrate, that’s almost always the wrong approach. By staying silent, you cede control of your story to others. By “over-communicating,” you make the most of every chance to transform crisis into opportunity – or, in this case, Chapter 11 into Chapter 1.

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