Corporate Crisis Recovery

Lessons From jetBlue's Breakdown

Humiliated and mortified.

That’s how founder and CEO of jetBlue, David Neeleman described how he felt about the recent incident that stranded travelers on the runway for 11 hours. This highly visible debacle provides a great case study in how to lead and respond when Murphy’s Law has struck in spades.

Thinking about Neeleman’s response tells me a lot about his fundamental worldview because what he said and did goes way beyond classic corporate PR or situation room spin control strategies.

First of all, Neeleman demonstrated the humility to admit mistakes quickly, directly, sincerely. No spinning or excuse making. This is authentic. He reacted with the heart of a person who genuinely cared about the customers.

Second, he took action — appropriately sized actions. This was a big problem, a very visible problem, and a very emotional problem. Every person in the world that has flown on a plane could empathize with those passengers. Sympathy for airlines is already very low, so Neeleman could not offer token solutions; they wouldn’t have worked. We’ve all received vouchers that barely covered a meal, been booked into second rate hotels, or been told that it’s tough luck because it was the weather not the airline’s fault. But Neeleman did something big. First he provided refunds and tickets. He is also now rolling out a customer bill of rights that will penalize jetBlue financially and reward customers for every hour they spend stranded in a plane. This action will force the industry to face its miserable customer service record.

I recall my own personal experience of such a meltdown many years ago. I was the interim director for a conference center. One afternoon, a group representative came to me and informed me that they had scheduled a meal for their entire conference group of 120 people for dinner at our dining facility. The problem was that they had not booked this and we had booked other groups, precluding them from being able to dine on-site. It was tense, to say the least. On the spot, our team decided to treat the group to a dinner show at a competing venue that night. It was costly to pick up the tab. But it was appropriate. And that group returned every year I was there.

Third, don’t posture, spin, excuse, or blame. jetBlue screwed up. It was a melt down. Their plan and their systems were not able to handle the situation. Neeleman admitted that and you can believe that he will be relentless in overhauling his organization to prevent future crises and to win back trust.

Fourth, get serious about clarifying the purpose and values of your organization. DO IT NOW! DO IT TODAY! And I don’t mean corporate wordsmithing exercises that create more cubicle posters. I mean deeply interacting with everyone in your organization so that they live and breathe your company values. These days, you can’t police the perimeter, inspect all the decisions people make, and insure that all the actions are the right ones. Organizations such as jetBlue are too big, too dispersed to be able to lead this way. As a leader, you have to make sure that the DNA of these values is so embedded that everyone at any time will decide and act based on these values. In this case, two of jetBlue’s values are “caring” and “integrity”. I think Neeleman responded accordingly.

Another classic example of responding to crisis based on deeply held values was Tylenol. In the fall of 1982 seven people died after ingesting cyanide-laced Tylenol. The news created a nationwide panic that could have ruined Johnson & Johnson. At the least, it seemed that they would never be able to sell Tylenol again.

How did Johnson & Johnson react so quickly, restore public confidence, and today still have Tylenol as one of the top selling medications in this country?

When your values are clear to you, so are your decisions

The story I heard on it explains that the corporate leadership team convened for what looked like a long meeting to discuss what to do. Shortly into the meeting, the question was asked, “What would our Credo tell us to do?” Without hesitation, the decision was then made to recall the products and to inform the public to stop using it. What could have been a long meeting to develop strategies to manage the situation, control PR, and minimize damage to the corporate reputation and stock value actually became a very short meeting. When your values are clear to you, so are your decisions. J&J knew their responsibility, and it wasn’t protecting themselves.

The Johnson & Johnson Credo affirms its responsibility to those in the medical profession, the employees and the communities where its people work and live. These came before the stockholders. It was essential to keep these people safe, if the company was to remain safe and alive. Their sense of responsibility proved to be their most valuable public relations tool.

The first three points begin during and after the crisis. This last point begins well before a crisis forms. It never ever seems like productive or strategic work to discuss, teach, dialogue, and refer to your purpose and values as a company. But when challenging decisions and even crises occur, you can only lead through clear values and purpose. It is these things that build the character and soul of your company. And it is character and soul that will enable you to stand and survive in the face of crisis.

Are your personal purpose and values clear? How do they reflect your worldview?

Are the purpose and values of your organization clear and compelling? Or are they just words on a poster?

When a crisis strikes (and we’ll all face them sometime) what will it reveal about your and your company’s soul?

And jetBlue’s epitaph? I think they’ll bounce back like Tylenol.

Comments (2)

  • foundation

    Dear Insdide Work,

    We are in the start up stage of an overseas business and your article on "corporate crisis recovery" was so timeley. Our tendency has been too focussed on studying the market where we have almost lost sight of our values. In the future, this could have become a foundational mistake for us especailly in a foreign environment.

    Sincerley,
    Start up guy

    start up guy on March 6, 2007 3:56 am | #
  • Thanks…

    And we wish you well as you start this journey. Let us know how it goes.

    Dan on March 6, 2007 9:30 am | #

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