If you have heard one of my keynotes on Relationship Economics® – The Art and Science of Relationships, I talk about the quantifiable value of soft assets such as brands, people and relationships. The Relationship Economics roadmap simply states that as value is promised and delivered, you begin to exchange Relationship Currency®. As that value is recognized and the delivery of it is recognized, you start to accumulate Reputation Capital®. Over time, the sum of those relationship assets, less your relationship liabilities, becomes your Professional Net Worth®.
Fundamentally, Reputation Capital is derived from certain critical components:
1 – Industry image: Regardless of how profitable or legitimate in some eyes, industries such as alcohol, pornography, and to many, oil and gas and pharmaceutical companies, will continue to struggle with a cloud of moral, ethical and political skepticism.
2 – Components of corporate image and corporate identity: Specifically, topics such as character in the organization’s culture; its competitiveness; abilities of the CEO, employees and broad-based resources; products and services in terms of quality, value and a range; and behavior of the leadership in search of profit.
3 – Stakeholder values: What they deem as valuable and prioritize in their interactions with the company and the market at large. All drive the basic tenant of a corporate reputation. Adjectives such as esteem, respect, trust and confidence become inherently good or bad.
Whereas components of the corporate image and corporate identification are perceptual, the corporate reputation is emotional and the inherent good or bad reputation is a super belief. No single individual, team or organization is inherently and completely all good or all bad.
Hence, the lessons from the tarmac: Take it from David Neeleman and JetBlue Airways: recovering from their crisis earlier this year is all about the trust they invested in building beforehand. Trust, crisis and redemption are all on the minds of the founder and CEO of JetBlue as he sits in his Forrest Hills, NY, office reminiscing about the notorious Valentine’s Day debacle, when his airline suffered an unimaginable breakdown in resource allocation, leadership, and many would even say, common sense.
Two inches of ice at New York’s JFK airport caused more than 1,000 cancellations, massive delays, and worst of all, passengers stuck on airplanes for up to nine hours. The interesting aspect about maintaining your Reputation Capital is that eventually even good companies screw up – buggy software releases, faulty manufacturing, or unsecured access to private information, for example. Unfortunately, many of these missteps often happen in very public eyes – revealing the true character of the organizational leaders and the relationship-centric culture they have or have neglected to build.
Whereas Delta and American Airlines (and a number of others) also stranded customers during the same storm, isn’t it surprising that they simply met the general customer’s low perception of them? But JetBlue, with low fares and amenities such as in-seat video systems and a considerably more personable service, had set and delivered a higher level of expectation from those very same customers.
The February fiasco presented JetBlue with a unique problem and opportunity. The problem is one of removing doubt in its ability to handle unpredictable conditions. Is a low cost operation too lean to accommodate the phenomenal growth, which has made JetBlue the eighth largest airline in its infant seven-year history? If the answer is to add breadth and depth to its personnel and various systems, can they still keep their fares low? And do personalized service and an intimate relationship with the otherwise “reservation number customers” elevate them above the market noise?
The opportunity is for this CEO to proactively manage a crisis in a manner that confirms or enhances its Reputation Capital. And he has certainly tried. In the very next week following the fiasco, he appeared in every outlet possible from the New York Times to NBC’s Today Show to Letterman and yes, even for the Gen Xers, on YouTube. He accepted responsibility and accountability for bad decisions and overwhelmed functions. He promised to fix the problems and refund and credit those most affected by the inconvenience. He apologized repeatedly and reiterated the fundamental reputation this young airline is after, which is one of credibility and empathy.
Caring for those customers who want to believe you today and believe in you tomorrow is not a feeling, but a behavior, which great executives ensure permeates through their relationship-centric culture. The Reputation Capital Neeleman and JetBlue is counting on to pull itself through has been seven years in the making. Flight after flight, they have demonstrated genuine concern for their single biggest asset – their customers. Even after the colossal Valentine’s Day meltdown, many prefer JetBlue over most of its competitors. That is no accident. Organizations with a reputation of being trustworthy before a crisis occurs have a considerably easier time recovering from them. When customers come to your defense on blogs, the Relationship Currency deposits you have made over the years tend to pay off in folds.
Here are some points to think about:
1 – Challenges and mistakes are inevitable. How will your various stakeholders view them based on your response? Will you deliver what you have been promising in the market?
2 – Under huge pressure, an organization’s Reputation Capital is as strong as its weakest link. How will your team stand up?
3 – Do you have a culture of empowerment? Do your employees feel authorized and are they trained to take common sense actions when management doesn’t know what’s happening?
4 – Do you have a customer’s Bill of Rights? Have you introduced a customer Bill of Rights as JetBue has?
5 – If you have one, do your people on the edge of those customer interactions believe in it? Do they believe in the reputation you want to establish in the market?