I was recently asked if I had any prediction for the “next thing” in crisis management for 2023. Without hesitation, I replied, “Systems failures.”
2022 ended with two epic system failures, and they threw a bright light on the potentially devastating impacts of scrimping on IT investment or failing to modernize operational practices and the systems that power them.
Before we get into it, let’s get to the point. System failures happen. If your organization operates on a just-in-time delivery basis – either your own products and services, or your supply chain – then you need to understand the operational and reputational risks of system failures. Preparing now may save you later.
Trigger warning to those who were recently thwarted in your efforts to get Taylor Swift tickets or had your holiday travel plans ruined by Southwest Airlines.
The system failure is the crisis
Taylor Swift broke Ticketmaster. The company, which was the exclusive outlet for her tour’s tickets on the primary market, opened the “pre-sale” window for tour tickets on an otherwise unremarkable Tuesday in November 2022. Two days later, the company canceled the “general public” sale, citing “high demands on ticketing systems and insufficient remaining ticket inventory to meet that demand.”
What happened? Bots, overwhelmed infrastructure and sky-high demand caused millions of people to encounter system glitches, long wait times and other problems as they watched their dreams of seeing Taylor Swift disappear into a “Blank Space.” If you were one of those people, then you may have been told, “You Need to Calm Down.” (Too soon?)
Clearly, Ticketmaster was not “Ready for It” and wouldn’t be able to just “Shake It Off.” The company was already under fire for being the most dominant company in the ticket-sale space and having previously delivered poor customer experiences to frustrated ticket-buyers. In other words, it wasn’t the first time, and it likely won’t be the last.
“It’s truly amazing that 2.4 million people got tickets,” Swift said on Instagram after the fiasco. “But it really pisses me off that a lot of them feel like they went through several bear attacks to get them.”
The costs of this system failure? Another bruise on an already despised reputation, a lovely day in Washington for the CEO at a congressional investigation and more federal scrutiny into the company’s estimated 70% market share. “Don’t Blame Me” won’t cut it.
The system failure worsens the crisis
Systems work until they don’t. Southwest Airlines took a major hit to its reputation during the recent holiday travel season when it canceled thousands of flights daily for more than a week.
In a nutshell, too many flight crews and planes were in the wrong places to serve the airline’s stranded customers. While that is a systemic failure, it’s not the system failure I want to highlight. Had this been the only significant operational challenge, Southwest likely would have returned to normal quite quickly. But there was another critical system failure: an antiquated IT system.
Southwest’s systems couldn’t keep track of those thousands of scattered flight crews after all those cancellations. To locate them, overwhelmed Southwest agents had to CALL THEM to find out where they were and then again to reassign them. Pilots and crew members trying to get their assignments on their own sat on hold for hours. The interconnected IT systems simply could not figure out where everyone needed to be.
In an interview with Fortune, Southwest CEO Bob Jordan summed it up this way, “As we’ve grown, we’ve outrun our tools.”
The costs of this system failure? Upwards of a $1B in lost revenue and a massive hit to the airline’s reputation.
The system failure coincides with the crisis
This impact of system failure is frequently overlooked, because it’s so often taken for granted. Most crisis plans I’ve ever seen fail to account for this possibility.
Put yourself in the shoes of Ticketmaster or Southwest’s crisis management teams during either of the crises we’ve discussed. Now imagine your company’s internal communications systems – email, Slack, Intranet, cloud-based resources – going down, too. That’s a system failure coinciding with a crisis, and it makes managing that crisis a lot harder.
The key here is not only redundancy but also everyone knowing when and how to use the alternative systems. Add these kinds of system failures to your crisis planning activities (You do plan for them, right?) because you know your internal communications systems fail, too. Effective crisis management requires being able to deal with coincidental systems failures. Don’t let it be the Achilles heel to crisis preparedness.
The Year of System Failures?
My prediction that system failures will be the defining crisis type of 2023 may not pan out, but they will happen. If your organization can’t or won’t invest in upgrading its systems and creating redundancy, then a system failure is coming your way. Be ready.
Inventory critical systems and some of the ways they can interrupt business as usual. Look beneath those systems to see if they are covering up any rickety operational issues, especially if you’re part of a fast-growing enterprise. Plan for disruptions in internal communications systems that can make crisis management even more challenging.
Then, when you’ve overcome that crisis and saved your reputation, you can look back at that faulty system and say, “I Knew You Were Trouble.”