The person with a CEO job faces many different challenges during their career. One of the biggest is one that is completely out of their control – when their company decides to merge with another company. When companies decide to merge, the senior management often makes many promises to the press and shareholders of how much more efficient the combined companies are going to be. In the modern world of business based in part on the importance of information technology, these promises have to be carried out by the CEO.
Problems With The United / Continental Merger 5 Years Later
The United Continental fleet of aircraft was grounded in mid-2015 because of a technical glitch in the company’s IT infrastructure. United was forced to suspend their flights worldwide in order to deal with the software problem. What this very clearly shows is that the company is still struggling to deal with issues that should have been resolved at the start of the efforts to bring United and Continental together when the two firms merged in 2000.
One of the biggest challenges of that merger was that United is the second largest carrier in the world. When they purchased Continental the United CEO needed to move quickly to blend United’s IT systems into how Continental did business. In September of 2014 United hired its third CEO since the merger. The new CEO, Linda Jojo, had a great deal of work before her. Bob Edwards had been the United CEO before he was replaced by Linda.
The challenges that Linda will be facing include preventing outages like they have just experienced. Another problem includes dealing with the airline’s mechanics who are still working under separate IT systems, which store complex data related to fixing aircraft. The IT changes that they have made have not always gone well. After the airline moved to a single crew management system previously used by Continental, a problem led to United losing track of hundreds of pilots around the world and it contributed to flight cancellations. Linda is going to have to do a better job.
What United Continental Could Be Doing To Fix Their Problems
Clearly, Linda Jojo is going to have her hands full as she tries to complete an IT merger that really should have been taken care of over 5 years ago. Over the past 5 years, the company has experienced a series of mishaps that have prevented it from being able to realize the benefits that were promised to customers and shareholder when the merger was first announced.
United Continental is not the only airline to undergo a merger in the past few years. Delta merged with Northwest back in 2008 and they were able to accomplish the merger of their systems relatively quickly and painlessly. This has allowed them to now become the most profitable airline in the industry. Additionally, American Airlines merger with US Airways which happened in 2013 is still a work in progress but has not had the difficulties that the United-Continental merger has had.
One immediate change that will need to be implemented will be to create backup features for United’s enterprise systems. If they are able to do this, then they should be able to prevent a single glitch from being able to ground the airline’s entire fleet. When an enterprise system has a single point of failure, as was the case at United, it can take multiple hours to hunt down what the cause of an outage is. By making changes like this United can start to become more proactive in how they manage their company’s IT infrastructure.