Crisis Communication and Restoring Trust in Business.
Introduction
It happened on February 14, 2007, when JetBlue airlines cancelled almost 1,700 flights and stranded more than 130,000 passengers because of winter storms. The passengers felt extremely bad about that situation and the way the in-flight and airport personnel working for JetBlue behaved themselves with them. It took six days and multiple cancellations, for the discounter to resume its regular schedule. Before the ice storm that gave it a lost-reputation JetBlue was the envy of the airline industry the startup was so successful that it was named The Best Domestic Airline five years in a row by members of the North American Travel Journalists Association NATJA. The incident also brought major changes to the JetBlues top-level management. This paper focuses on the crisis communication and restoring trust in business, with the JetBlue crisis taken as the primary example for discussion. The content is divided into two major sections executive summary and discussion. Executive summary shortly discusses the key points stated in the paper. It also includes the conclusion part of the paper and a few recommendations. The discussion section contains five sections that analyze the BlueJet crisis and restoration of trust in business. For this research, google served as the main search engine for document retrieval. Google scholar and various blogs related to the incident also provided a lot of resources.
Discussion
I have conducted a vast literary research over the past few weeks to collect information about the hazards and standards. I have used the information provided by the Occupational Safety and Health Information (OSHA) as the primary source. I have also gone through magazines, journal articles and scholarly books that helped me as secondary sources for completing this paper. All the sources are cited at the end of the paper in the reference section. I thank all the authors of the sources for having helped indirectly in writing this paper and I also thank my instructor who is the motivational factor behind this work.
On the day of the incident, nine Jet blue flights sat within sight of gates at the airlines John F. Kennedy International hub. The outbound flights were trying to wait out an ice storm without losing their places in line, while the inbound flights were waiting for gates occupied by other aircraft. Although JetBlue is the largest airline at John F. Kennedy (JFK) International Airport, it did not posses the enough gate space needed to accommodate so many planes at once. The airline said 10 incoming and outbound flights at JFK were significantly delayed with customers on board during the ice storm. More than 250 of JetBlues about 500 flights nationwide were canceled. The Valentines Day turned out to be the most notorious of the trapped-and-stranded incidents, when planes packed with passengers have sat on airport tarmacs for interminable stretches of time - often without food, working toilets or adequate communications from carriers.
Fig.1 A JetBlue plane sits on the tarmac at New Yorks John F. Kennedy airport, February 14, 2007. The low-cost carrier had to cancel about half of its domestic flights due to winter weather.
According to JetBlue spokesman Bryan Baldwin Reasons, the reasons for the cancellation of flights include congestion, frozen equipment and an effort to keep planes ready to go in case the weather broke. The airline called the delay as unacceptable and planned to offer the affected passengers refunds and free flights. However, as reported by CBS News correspondent Sharon Alfonsi, passengers called the whole mess as Jet Black and Blue. Several couples told CBS station WCBS-TV they felt like hostages being held on the tarmac. On board of the planes, snack foods wore out their welcome, bathrooms became unpleasant and cabins sweltered, passengers said. Here are some customer reactions Cheryl Chesner, 26, said unacceptable was hardly the word for the 11 hours she and her husband Seth, 27, spent trying to take a JetBlue flight to Aruba for their honeymoon. You got to realize the frustration you can look out the window and you can see, theres the gate, and if you let us off the plane, we can walk there, said Farrell, 48, of Brooklyn.
They had to open the door every 20 minutes just so we could get air, said Sean Corrinet, 29, who was on a flight bound for Cancun, Mexico.
CEOs Reaction to the Incident
David G. Neeleman reported that his companys management was not strong enough. And he said the current crisis, which has led to about 1,000 canceled flights in five days, was the result of a shoestring communications system that left pilots and flight attendants in the dark, and an undersized reservation system (The New York Times Company). He said the debacle will cost them many millions of dollars.
Fig.3. Maria Arbelo, second from left, spent Sunday as she had the day before, waiting for her JetBlue flight at John F. Kennedy International Airport.
JetBlue said the first step in getting people to fly on the airline again was its introduction of a new customer bill of rights. Under the bill, customers will be compensated based on the length of delays. The value of the vouchers varies between 25 and the full amount of the ticket. As indicated by JetBlue, the qualified delays include those caused by airplanes unable to taxi to the gate within 30 minutes and flight departures held up for a minimum of three hours. If JetBlue cancels a flight within 12 hours of departure, customers can claim full refund. JetBlue is ready to give vouchers to passengers if delays are the airlines fault. It also vowed to de-plane passengers if an aircraft is delayed on the ground for five hours.
To prevent incidents in future, Neeleman said JetBlue will put in place a reserve force of employees in the New York area, who can aid the airline during crises. Having described the crisis as one of the tough times in history, Neelman said he had no intention of resigning in the wake of the worst corporate mess in the airlines seven year history. However, after three months since the crisis happened, the board urged Neelman to give up his post. On May 10, 2007, David Neeleman was replaced by Dave Barger as CEO of JetBlue and on May 21, 2008 he was replaced as chairman of the board by Joel Peterson.
How differently JetBlue would have handled the Crisis
The main aim of crisis management and crisis communication should be recovery. Crisis communication should have an agenda and be implanted the correct way. JetBLue has given itself horrific performance and broken promises. The basic rules for response when things have gone wrong are to accept responsibility.
to apologize and make restitution if possible.
to clearly identify the changes that will be made to prevent recurrence.
to identify how future reports on progress will be made.
All these might have been done in the first few hours after the event or as soon as it is feasible given the distribution of the bad news in the instant media.
Accept Responsibility. While this statement sounds to be consoling, he adds that his companys management was not strong enough. It shows that he has not realized the fact that he is the management. There is no need that Neelman should have resigned but he must have accepted his own level of responsibility for not putting in place the management that he said is missing is the problem. The above discussion can be linked with Milton Friedmans statement on social responsibility. Friedman is now a senior research fellow at the Hoover Institution and the Paul Snowden Russell Distinguished Service Professor Emeritus of Economics at the University of Chicago. According to him, a business doesnt have responsibilities but people have. If a corporation is assumed to be an artificial person, then it makes sense that it has artificial responsibilities, but business as a whole cannot be said to have responsibilities, even in this vague sense. As Friedman said, the individuals who are to be responsible are businessmen, which mean individual proprietors or corporate executives.
Apologize and Restitution Neelman said he would announce a compensation system tomorrow. Why he did not announce it the same day Until tomorrow comes, no one is sure about the compensation system. When a false judgment is already made in the minds of the people, what is the use of introducing a compensation system tomorrow
Clearly identify the changes to be made Neelman said the lack of trained staff as the basic problem related to their communication system . Though the solution presented is to train 100 corporate office staff to help do the resource allocation work, he did not mention it. Most of the customers are unaware of that and they would have been satisfied if the issue has been addressed something like - the lack of staff, or inadequate training, or inadequate communication infrastructure than just saying we have to train some more corporate staff.
Report back. No sign of promise about future communication on this. A few comments from the Reputation Doctor regarding JetBlues reputation in crisis
JetBlue CEO David Neelemans statement about being uniquely qualified to deal with these issues is full of hubris and inexperience
Dont make promises you cant keep. Better to manage expectations then over promise and appear like
Pinocchio
JetBlue needs to hire an excellent PR firm with seasoned crisis public relations and reputation management experience today
The Importance of Trust in Business
Trust has become very crucial to business and society in the twenty-first century. The incident happened with JetBlue airways on February 2007 demonstrates the importance of this dialogue. After the havoc, JetBlue has lost its reputation and branded as on of the cheapest airlines that one doesnt want to take when bad weather hits because heshe wont get off the ground for many hours or days. Large airlines ensure to remind the public why they believe their service is more reliable and give more options in bad weather. JetBlue management failed to do the right thing when their reputation was in crisis. They focused on public trust only during the crisis. Until then the actual dynamics of public trust in business remain a largely uncharted territory in need of exploration and mapping. They would have better sought the help of a trained crisis management expert. Though it is a major challenge, the rewards of resetting their lost trust will be great. This is because, trust means everything in business.
Public trust in business is described as the level and type of vulnerability the public is willing to the relations they have with business. As The Guardian columnist Simon Caulkin has observed, Trust is something business cant do without . It isnt some fuzzy nice to have its the lubricant without which the City , i.e., the London financial markets, and Wall Street are as frozen as a rusted motor. If there is debt or credit, there has to be trust. According to a task force organized by the Business Roundtable Institute for Corporate Ethics and the Arthur W. Page
Society set out to investigate the current landscape of public trust in business, they concluded with the following key points about trust in business
The general distrust of business is a black eye for all companies and indeed for all participants in the global economy.
Concrete actions exist to be taken to address and improve public trust in business.
Leaders need to become experts in the trust environment as they are in the technological, economic, political, and competitive environments.
As indicated by the task force, the three core dynamics of trust that the leaders must understand are
Mutuality that is based upon shared values or interests.
Balance of Power where risks and opportunities are shared by parties.
Trust Safeguards that limit vulnerability in the context of power imbalances.
Firms and their leaders need to understand the way their business will be impacted by trust issues. They have to identify and understand the trust configurations that matter most to their firm or sector. They must also identify the drivers that are most likely to affect trust in their company with respect to various stakeholders. For sustainability of trust, business must render quality products and services. A well-organized set of values must be created to define and clarify what the enterprise and its people are at root and make sure that the enterprise adheres to these values. Mediating institutions play a vital role in maintaining a smooth relationship between the business and public. So, it is essential to build and manage strong relations with those institutions. Research studies may be conducted to develop a keen understanding of the dynamics that have an impact on the public trust. As Nobel Laureate economist
Kenneth Arrow puts it
Trust is an important lubricant of a social system. It is extremely efficient it saves a lot of trouble to have a fair degree of reliance upon other peoples word Trust and similar values, loyalty or truth-telling are examples of what economists would call externalities. They are goods they are commodities they have real practical economic value they increase the efficiency in the system, enable you to produce more goods or more of whatever values you hold in high esteem. But they are not commodities for which trade on the open market is technically possible or even meaningful.
As, trust means a lot to business, the managing bodies of business must make a commitment to create social value in the public interest through the firms core contribution to society, and identify as well as communicate how an engagement of social issues has or might impact the value proposition of the firm through innovative products and services.
Conclusion and Recommendations
The discussed example suggests that trust affects consumer spending, corporate reputation and a companys ability to navigate the regulatory environment. Crisis should be handled carefully with utmost care and alertness. The reputation that is lost can be restored by adopting a strategy of Public Engagement through a shift in policy and communications. It is recommended to follow the four pillars of Public Engagement private sector diplomacy, mutual social responsibility, shared sacrifice and continuous conversation.Private sector diplomacy includes the partnership of business with governments and NGOs to address the key policy issues and the worlds most stressing problems. Mutual social responsibility involves a realignment of the companys business practices to promote a better environment that benefits both the society and the bottom line. CEOs must share the problems the company is confronting and welcome their voices. They should let the employees know that they really care for them during recession. This is called shared sacrifice. To trust a company for the second time, the respondents may expect to hear information from the company three to four times before they believe it. So, the company should continuously communicate about the new policies introduced, by making use of blogs, discussion forums, and bulletin boards.
Categories:
0 comments:
Post a Comment