Firms of Endearment

JetBlue Shows How an FoE Manages a Customer Crisis

Several people have asked me about how I think JetBlue has managed last week's weather-related fiasco that left thousands stranded and some passengers on the tarmac at New York’s JFK airport for 11 hours. JetBlue is one of the exemplars of stakeholder relationship management (SRM) cited in our book, Firms of Endearment.

Here’s what how I answered one person:

Neeleman has approached this crisis with candor, humility, empathy and convincing resolve to never have last week's disaster repeated. In my judgment, he has acted quintessentially as an FoE CEO.

Amazingly, the Street has apparently been charmed by Neeleman's down-to-earth manner in communicating with JetBlue customers. My money is still on JetBlue having a good year -- a 12%% - 15% rise over today's stock price by year-end despite the earning hit last week's events caused.

Earlier this week, The Washington Post carried a full-page letter addressed to JetBlue’s customers. It began, “We are sorry and embarrassed. But most of all we're deeply sorry." Later on the letter reads, "... JetBlue was founded on the premise of bringing humanity back to air travel... We know we failed to deliver on this promise last week." You can read the full apology here.

Compare Neeleman’s approach with that of Delta, which also had weather-related delays. MSNBC talk-show host Joe Scarborough sat in center seat on an Atlanta-bound flight from LaGuardia for nine hours. As reported in this week’s issue of Advertising Age, Scarborough complained that he had yet to get an apology from the company. “… instead, I’m getting spin from a company that’s refusing to take responsibility for one bad decision after another.

Meanwhile, David Neeleman has not only apologized profusely, he has drawn up and issued a Customers’ Bill of Rights which you can download from here. The Customer Bill of Rights is a classic FoE-type response to a major problem. JetBlue is now the first company that will compensate customers for protracted delays. In one of the most astonishing provisions, JetBlue will pay any passenger who gets bumped because of overbooking $1,000.

We are fully confident that JetBlue will be enthusiastically welcomed back into the hearts of many customers’ and cheered by those who never lost faith in JetBlue in the first place.

DBW

This article was also posted at Amazon.com  and at David Wolfe's Ageless Marketing blog.

This IS the Day!

Today IS the day!

This is the day of the formal release of Firms of Endearment, of which I am co-author. This book is surely one of the most satisfying accomplishments of my long career. My co-author Raj Sisodia was a big reason for the great satisfaction I’ve experienced in working on this book. Raj is Trustee Professor at Bentley College, located just outside of Boston in Lexington.

Among my memories that I will treasure till my last breath are the writing retreats we took. Raj, being Indian, did most of the cooking. He is as fine a chef as he is an intellectual. I can’t wait to get to work on our next book!

Let me share with you how Wharton School Publishing describes the background for this book in the first paragraph on the front cover flap:

“We’re entering an Age of Transcendence, as people increasingly search for higher meaning in their lives, not just possessions. This is transforming the marketplace, the workplace, the very soul of capitalism. Increasingly, today’s most successful companies are bringing love, joy, authenticity, empathy and soulfulness into their businesses; they are delivering emotional, experiential, and social value – not just profits.”

It would be one thing if the publisher of Firms of Endearment were a second tier publisher known for feel-good books. However, Wharton is the first or second-ranked business school in America (depending on whether you’re from Harvard or not, one wag told me). When have any top-ranked incubators of MBAs sponsored talk about “love, joy, authenticity, empathy and soulfulness” in how businesses should be run?

This book is about a major paradigm in the arenas of commercial intercourse. The scale of this paradigm shift is unprecedented in terms of speed of development (within a single generation) and scope (it is global).

A little history can help us appreciate how the theories and philosophy of business are undergoing radical change:

King Magnus Eriksson granted the earliest corporate charter on record to the Stora Kopparberg mining community in Falun, Sweden in 1347. For just under five centuries corporations were chartered by the State for public purposes such as building hospitals, bridges, roads and universities. Generally, corporations undertook tasks deemed too risky or too expensive for individuals or governments to accomplish. The government closely oversaw them, and charters could be revoked if the corporations failed to fulfill their public purpose. Shareholders were beneficiaries, but were not regarded as the primary reason for the company’s existence.

The modern form of corporations traces its origins to an 1844 act in Britain that allowed them to define their own purpose. This largely shifted control of corporations from the government to the courts.

Now, as the 21^st century gets underway, we are seeing a return to the idea that companies have a social as well as a wealth creation purpose to satisfy in order to justify their existence. Firms of Endearment is about this movement and presents such names as Whole Foods, Costco, IKEA, IDEO, Southwest Airlines, Harley-Davidson, New Balance, and JetBlue as exemplars of this new direction.

Firms of Endearment is now available at Amazon and Barnes & Noble.

DBW