I read a good article the other day by Mila D'Antonio called The Strategy That Fuels Customer Engagement. The article outlined so clearly how a good company can stumble and recover with a laser-like focus on the five key areas of any business: Strategy, Leadership, Culture and Employee and Customer Engagement. And, what JetBlue discovered along the way has added to its understanding of the direct and quantifiable impact of these elements on business results.
When a company blunders, as JetBlue did on Valentine's Day 2007 at JFK Airport in New York, when thousands of passengers were stranded for hours aboard planes, one course of action that has become popular is to not respond to the incident at all or respond only if pressed and, if at all possible, pass the blame to someone else. Instead, JetBlue took responsibility and created its Passenger Bills of Rights. Its founder and CEO paid the ultimate price with his job. But, dig a little deeper, as the article outlined, and you'll discover that JetBlue took a systematic view of the problems and, rather than engage in a short-term PR exercise, overhauled the way employees and customers viewed the company, for the long-term.
JetBlue's strategy is to differentiate itself through a customer-and employee-centric culture. Leadership would not tolerate any declines in employee or customer perceptions of the airline as a good place to work or a good flying experience. The changes started with a plan for improving employee engagement results as the thinking was, if the company improved those metrics, customers would receive great experiences (what we call the Spillover Effect).
What the JetBlue executives learned was:
- Engagement is highly correlated with the liklihood that an employee would recommend JetBlue as a good place to work.
- JetBlue's revenues are closely tied to engagement so small improvements in key driver metrics generate big results.
- Key drivers of crewmember engagement are pride/personal commitment, brand, crew leaders, executive leadership, team/people and work environment.
- These six dimensions of engagement are now mapped to revenue growth and shareholder value.
- Listening to employees in terms of what they like about JetBlue and their jobs has resulted in many cost-saving ideas and efficiencies.
- Data gathering is only part of the story. Real insight comes from taking the right qualitative and quantitative approach, including linking behaviors and outcomes to hard results like shareholder value and growth targets.
- Designing an engaged company is not an event or a rah-rah program but a systematic approach to questioning the status quo, learning and adapting in order to execute a successful strategy.
Leaders make mistakes; it's how you recover from them that people remember. The core elements of the business are interdependent and should be viewed that way because they impact your results in a big way.
What drives engagement at JetBlue isn't necessarily what drives engagement in your organization. What are your engagement drivers?
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Great post on JetBlue. I can't seem to quit thinking about Toyota after reading your blog post. I am wondering what their strategy be for their situation?
ReplyDeleteThanks for the comment, Cat. First, I think that Toyota has to own its mistake, the way JetBlue did. The failure started with altering its strategy, which has been in place since the 1950's when no one thought a Japanese car company could ever take on the Big Three in Detroit. However, recently, Toyota ditched its more incremental growth strategy, maybe seeing an opportunity when GM and Chrysler needed big government bailouts, and pursued a growth-at-all-costs strategy.
ReplyDeleteThat decision could not have included a review of its current competitive advantages: quality and reliability as otherwise, leadership may have taken a foot off the pedal (if you'll excuse the analogy!) and ramped up growth but not at the expense of their loyal customer base.
JetBlue stepped out in front of their problem and created the Passenger Bill of Rights which outlined expectations of service at all times even when the problems are outside the company's control. That Bill of Rights is now the cornerstone of a piece of Federal legislation passed in 2008. Toyota had to be dragged into admitting culpability by government watchdogs, trial lawyers, etc. The public doesn't appreciate this kind of foot dragging especially in the current climate of corporate and executive distrust.
The second problem was a failure of
leadership to own the gas pedal problems when they first cropped up. People still are shocked that a brand so closely aligned with quality could so blithely sweep these problems under the carpet. Although the current CEO has accepted responsibility and there are ads on TV from satisfied Toyota customers, what impact has this whole issue had on brand equity? What has it done to the pride of its employees in what they are doing? What has it done to millions of non-Toyota owners (like me) who may have had a Toyota brand in mind for their next car but now...?
Strategies need to evolve to stay ahead and to leverage opportunities but not at the expense of brand, employee pride, a culture of quality and customer loyalty.
Barbara, nice review of what to do and not do. It's a good reminder, too, that Toyota's reputation for quality had all of us believing (or at least I believed) that they'd know how to handle this issue better than most. Being good in one area, doesn't mean you have skill or resolve in another.
ReplyDeleteThanks for the comment, Nancy. What shocks most of us is that Toyota had a 60 year reputation for quality and reliability and then saw an opportunity to grab market share (when GM and Chrysler went through government bailouts) and did so without thought (seemingly) to the impact on its famed Toyota Way.
ReplyDeleteNo one believes that it's easy running a business of any size today but there have to be some home truths about the company's resources and its ability to execute a new or modified strategy that strains its capacity.
Long term, I think Toyota will retain its loyal following but its brand has been tarnished. After all, isn't it now just like every other car manufacturer? The magic is gone, at least for those of us who do not own a Toyota brand.