Crisis Management

November 17, 2014 BE_Post, Blog No Comments

TOPIC: CRISIS MANAGEMENT

LEVEL: DIFFICULT

Crisis management (http://en.wikipedia.org/wiki/Crisis_management ) is a relatively new field of management that has gained major importance over the last years and made its way into corporate structures – airline structures included. Successful crisis management requires forecasting potential crises and planning how to address them, identifying the causes and nature of the current crisis, utilizing strategies to minimize the impact and stimulating recovery.

Airline industry has always been full of high-profile events that require efficient crisis management strategies. With the viral effect of social media and instant reaction from the press, airlines are forced to gear up for state-of-the-art crisis management and invest in public relations.

2010 is marked by an International Airport Review Conference, called “Aviation Crisis Management” to be held in Abu Dhabi. (http://www.internationalairportreview.com/events/aviation-crisis-management-2010/ ) It is expected that the conference will “bring together senior figures from airports, airlines, transport authorities, Government, associations, suppliers and academia working within the aviation sector” to discuss key crisis management issues utilizing recent examples, such as the disruption of flights due to the volcanic ash (http://www.huffingtonpost.com/2010/04/19/iceland-volcano-the-worst_n_543627.html ).

Meanwhile some airlines have come out of a crisis or two holding their heads up high. Among them is JetBlue that faced a wave of criticism back in 2007 due to severe delays, flight cancellations and even leaving some passengers stranded on planes for almost 11 hours. CEO David Neeleman fixed the situation with a sincere apology (http://www.jetblue.com/about/ourcompany/apology/index.html ). But are apologies enough?

Watch the video posted to YouTube via JetBlue’s account in 2007 http://www.youtube.com/watch?v=-r_PIg7EAUw and the interview with crisis management expert Eric Dezenhall http://feedroom.businessweek.com/index.jsp?fr_story=733eeef1dc1605d3886379bc1e0a2bde11cb3f53

1.Match words from the columns to make meaningful combinations:

1operational

2sense (of)

3to step

4cute

5diffuse

6to go on

7price (of)

8to reimburse

9tangible

a.Issues

b.Entry

c.action

d.Spin

e.Control

f.Customers

g.Unaddressed

h.Outrage

i.down

Answers: 1a, 2e, 3i, 4d, 5h, 6g, 7b, 8f, 9c

2.Pair up the following words used by JetBlue’s CEO with their respective meanings in context:

· aberration

· to transpire

· to make provisions

· to spool smb. up

· to beef up an organization

1.If a situation goes off-course and not the way it was originally planned, we can speak of ………………………………… (Answer: aberration)

2.If a CEO refuses to use corporatespeak, he might use the following word to mean “to strengthen an organization or company” :………………………….. (Answer: to beef up an organization)

3.If a crisis situation comes to light or takes place, we can also say it……………………………………. (Answer: transpires)

4.If you need to solve a crisis fast, you can have your employees act fast, i.e. – …………………..them……………. (Answer: spool them up)

5.If you make preparations beforehand, you can say you are……………………………………………….(Answer: making provisions) for something.

3.Determine whether the following statements are true or false:

1. David Neeleman apologized to JetBlue passengers saying that although he is very sorry about the setbacks, the crisis may happen again (answer: F)

2. JetBlue’s CEO offered no solutions to his clients promising that setbacks would never happen again (answer: F)

3. Neeleman had solutions for the following 7 and 30 days after the crisis (answer: T)

4. According to the CEO, all non- airport crew members of JetBlue would be given badges and trained to assist airport staff if required. (answer: T)

5. Neeleman says that they are making provisions with their reservationists to expedite the process of changing reservations in a crisis event (answer: T)

4. Answer the following questions to evaluate your understanding of the interview:

1.According to Eric, what were the 3 things that JetBlue had to do about the crisis? (Answer: diffuse outrage, give consumers a sense of control and show a remedy)

2.According to the rules of crisis management, what value do apologies have? (Answer: apologies are overrated and they are a mere price of entry)

3.What do companies need to do apart from rhetoric to alleviate the crisis? (Answer: support rhetoric with actions and solutions)

4.What did JetBlue do to alleviate their crisis in 2007? (Answer: they reimbursed their customers and came up with a Passenger Bill of Rights)

5.How would Eric name this kind of decision in crisis management terms? (Answer: tangible action)

6.What kind of personality does a company CEO need to go through a crisis efficiently? (Answer: a likeable personality with decision-making authority to act)

7.How did JetBlue manage to prove that their Bill of Rights was not just public relations and rhetoric? (Answer: during another smaller crisis with cancelations when JetBlue handled the situation better and ensured a smooth transition)

8.Why did Neeleman eventually step down from as CEO of JetBlue? (Answer: because in crisis management there is an understanding that there is a need to show that someone paid the price)

9.What does he think is the most important thing about JetBlue and their crisis in 2007? (Answer: they diffused the outrage pretty quickly combining the likeable personality of the leader with a portfolio of operational changes)

10.What is the minor criticism Eric has for JetBlue regarding their crisis management in 2007? (Answer: he thinks it was a bad idea for Neeleman as a CEO to take part in an entertainment show, where CEOs tend to be out of their depth)