When Risks are Realized: Our Unplanned 4-day Road Trip Sponsored by Southwest Airlines

It started at 6:35am on Tuesday the 27^th of December. My wife and I just finished a successful holiday tour in Chicago and my hometown of Pewamo, Michigan, when we got a text message: “Your flight has been cancelled.”
 

I smiled, mumbled a “well that sucks” and rolled over – it wasn’t until an hour later when it hit me – we were kind of screwed.

In case you’ve missed out, Southwest Airlines (my wife’s preferred carrier) had a major service interruption over the holiday season thanks to an Arctic Bomb Cyclone that dumped major snow, wind, and chaos over a significant portion of the northern half of the USA. Planes, trains, and automobiles were cancelled country wide as the nation hunkered down for a blizzard that would claim dozens of lives and upend various services for days.

Southwest Airlines was hit particularly hard, where on the day we received that text message we had gotten another from a close friend in the airline industry, showing us some of the behind-the-curtain correspondence that Southwest will be grounding their fleet. (this text was also read at 6:35am)

Like countless others, we had no indication when our flight would resume and get us home. I had work scheduled for the 29^th and a family event planned for the 30^th. We sat down and anxiously looked for other flight options – I did see a United flight for $41,442 – should have grabbed it (just kidding), though my wife was particularly eyeing a Delta flight for 65,000 points (each) that would get us home by late Friday night.

By 10:00am we made the call, one that I was actually a little excited about – we decided to rent a car from our nearby airport and make the 2,300 mile drive from mid-Michigan to San Diego. The car was about $90/day and if we got on the road that day (again, it’s now 4 hours after waking up to the text on Tuesday) we could be home by Friday morning or early afternoon.

So, we did it. We got the car, a nice chevy equinox, and head on down the road stopping in St. Louis, Amarillo, and Phoenix before hitting home on Friday at 9:35am – most of the time I sat writing this article in my head about how many risks Southwest took that lead to this meltdown – while other carriers were able to correct and bring service much sooner.

When Risks are Realized

No-doubt case studies will be made and reviewed on the list of cascading Southwest woes. NPR relayed over and over on our drive how Southwest had a point-to-point system (versus hub-and-spoke) and outdated scheduling software that when coupled with crews literally spread to the wind spelled disaster for the company.

Now, I’m not (at all) an expert on the operations or logistics of air travel. I couldn’t tell you how old Delta’s software is or why United’s hub-and-spoke system was better for any particular reason besides what we all heard/read whilst watching the situation unfold.

What I can speak to is Risk.

During my graduate program I did a project-paper on quantitative risk analysis – the calculation of what it costs (in time and money) when risks are realized. It was a fascinating education for me and it continues to intrigue me.

What’s a risk?

Risk (noun): “a situation involving exposure to danger” (oxford)

Super short:  figuring out how to limit the exposure will lessen the danger.

Example: During this flu season you are at risk of getting the flu, you are being exposed to people with the flu and other transmission methods. The danger of getting the flu is personal though I certainly don’t enjoy it.

So how do you manage and mitigate risk?

There are four methods to mitigate risks:

• Assume and Accept – you know the risk is there and are willing to roll the dice.

• Avoid – “we exclusively won’t fly to cold regions that could be impacted by winter storms and avoid this risk entirely.”

• Control the Risk – “if we have multi-layered and redundant systems in place, we should be able to mitigate most winter weather issues. This will lower our exposure to this risk to an acceptable level.”

• Transfer – think insurance; “if we insure our operations, we can use that policy to cover any of our losses of a catastrophic blizzard.”

I thought it over and over both how many and which particular risks came to full bear over this holiday season, and if the executive leadership of Southwest truly knew what their risks were. 

That’s an important point above – you must know what your risks are before you can mitigate them. You’ll never catch all of the tens of thousands of risks that you are exposed to on a daily basis, but you can certainly plan for the big ones.

How to Manage Risk as a Leader/Manager

No matter what business you are in, no matter how big your team is, and no matter how smart you think your operation is – you are exposed to countless risks every single day.

These can be catastrophic like in Southwest’s example where the damage will be felt for years; or it could be a noticeable portion of your staff gets the flu and you have to adjust your operations to make due (remember COVID?). Or it could be relatively minor: like a jammed your finger in your car door on your way to work – probably won’t noticeably impact your output but I bet you wish you took an extra second to avoid that pain.

The point is YOU are in control of how you mitigate and react to these risks, and it’s your responsibility as a leader to plan for them.

Not sure how to do it? Here’s a simple and effective primer:

1. Sit down with your team on a recurring basis (monthly, quarterly, annually, etc…) and ask openly “What risks are we exposed to?”

2. Write them down, all of them. This is called your Risk Register.

3. Next to each risk assign an Exposure level (for now: critical, high, medium, low).

4. And, then a Danger level (loss of life, cost of missed days, missed opportunities, etc…) Be as specific as possible here.

5. Now, look at all your risks with an unacceptable Danger level. “Loss of life” is a good one and have a lengthy discussion on how to ultimately avoid that risk or lower the Exposure to the lowest possible level. It may take policies, resources, or even a culture change – but compared to losing a team member all of those tradeoffs are easy.

6. Rinse and Repeat; forever.

You will always encounter new risks as your business expands and your team changes so it’s incumbent on you as the leader to take extreme responsibility for your risks.

I leave you with this open-ended question: “How many risks are you currently tracking in your business?”



Thank you for your time today,

Joe

Want more on this topic?

Not sure how to precisely do what to do with your operation on risk?

Want to make sure you’ve buttoned up your risks?

Shoot me an email or let's gab about it.

Don't forget to drop me a line and subscribe to the website, we're building more everyday and I'd love for you to join me on this journey.   

Also check me out on Instagram, Facebook, and YOUTUBE where I'm sharing some additional content you may not find here.

Have you ever tried Executive Coaching or Professional Coaching? Want a free, no obligations discussion on it?  Let's Connect and give it a try.