Southwest Airlines Reputational Risk…

Michael D. Moberly, Principal, Founder kpstrat and ‘Business Intangible Asset Blog

This post does not represent another un or inexperienced (pile-on) rebuke of SWA for its recent holiday travel debacle.

Yes, it materializedcascaded, (a.) during one of the most emotion-laden holiday periods of any year, SWA’s very publicly and operationally, experienced a near ‘breaking point’ with its customers, (b.) leaving thousands of disappointed, angry, frustrated, and tired ‘passengers’, across generations, to (c.) learn that they may be indeterminately delayed or unable to arrive at their scheduled Christmas 2022 destination.

Adverse circumstances – chain-of-events such as this, regardless of how, why, or when they materialize, are not easily redeemable, nor recoupable, for any business, irrespective of its sector, size, stage, or brand.

Nor is it likely that SWA’s admirable + bankable history of on-time-ness, pricing, goodwill, or regional dominance, etc., will make substantial difference (in the near term) to those adversely affected.

In no small part because, most – more businesses (across sectors) are (increasingly) intangible asset intensive, dependent, and reliant, circumstances such as this…

  • regardless of how, why, when they materialize, converge, and adversely cascade enterprise wide,
  • across value chains, in 1-2 days, are neither easily, nor readily redeemable or recoupable, but probable and repeatable.

What’s more, each adversely affected individual, family, and/or loved one, hold devices in which they may repetitively + publicly convey their individualized form of disappointment, via multiple platforms for the duration of same, which include…

  • conceivable – forthcoming ranges of recompence that SWA will devise, focus-group, and offer on-line to Christmas travelers whose plans did not materialize as intended.

Experientially, business leaders convey inattentiveness to vulnerability, probability, and criticality of particular-circumstances and/or risks which can materialize and cascade, and the keystroke speeds of doing so…

  • which present myriad opportunities – avenues for undermining – destabilizing brands, reputations, operating cultures, valuations, projections, competitiveness, and to be sure, revenue generation capability-capacity.

Each of which can materialize, in spite of conventionally argued rationales and/or non-disclosure agreements which may influence a business leader, strategist, management team, board, and investors’ receptivity to delay what’s needed, necessary, and essential. Distinguishing the difference is neither a guess nor hunch.

Perhaps unique to SWA in this instance, there are likely few disgruntled passengers or disappointed loved ones who actually-know the names of SWA’s leadership (aside perhaps from Herb Kelleher, SWA’s founder, who died in 2019) to direct their message, e.g., I will never fly SWA again and I will discourage others doing so as well.

Based on my rudimentary familiarity with logistics and scheduling (please see my earlier posts regarding FedEx) wherein it’s reasonable to characterize this particular – calamity (for SWA), was an…

  • inevitability + convergence of sorts to being receptive to conventionally conveyed arguments and conventionally calculated assessments which translate…

if a particular operation or function which a business + brand relies – depends, is not deemed wholly broken yet, then same can be operationally – fiscally delayed, thereby subordinating interim inconveniences and costs to mere wishful guesswork.

Those who may be inclined to argue that same can or will materialize as an (equally or tactically) sustainable, competitive, and lucrative strategy, leaves me, and I’m confident, many readers of this blog, ‘scratching our collective heads’.

Prudent – timely (business process and/or system) upgrades which can both enhance service + mitigate risk, should be calculably worthy considerations, not default positions.

Also, readers of this blog recognize, there are countless, well-intended business economic – operation ‘best practices’ which obligingly emerged when business valuation, competitiveness, and revenue generation, etc., were

  • previously reliant – dependent on bigger – faster inputs of physical-tangible assets, versus
  • today’s inputs – contributions of intangible – non-physical assets, e.g., various forms, contexts, and applications of intellectual, structural, and relationship capital.

The latter, I am confident (as a business intangible asset strategists and risk mitigator) SWA will ‘feel’ in their upcoming quarterly projections.

SWA’s, not unlike most businesses today, irrespective of sector, size, stage, or location is irreversibly…intangible asset intensivedependent, and reliant on reputation and trust.

The ‘Business Intangible Asset Blog’ is experientially researched, written, and produced by Michael D. Moberly (since 2006 – over 1000 long form posts) to provide readers (business leaders, management teams, boards, and investors) with reliable perspectives and nuanced insights to distinguish, value, and safeguard particular – business things intangible designated as mission essential. 

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