As a practical exercise in the prediction of stakeholder reactions during a crisis, let’s imagine that we are executives at JetBlue Airways. We’ve decided to use our prediction model to craft a stakeholder engagement plan for a scenario where the airline is dealing with a major winter storm system. As JetBlue operates the majority of its flight schedule in the northeastern United States, it makes sense that you and your fellow executives proactively develop a plan for the very likely future situation that your company is effectively immobilized by an extended winter storm. While a full crisis planning process will include a great deal more than a brainstorming session focused on stakeholder engagement, we’re going to spend a few minutes thinking exclusively about just that.
Let’s assume that we’ve already set some parameters for the operational impact of the storm, something like let’s assume that we’ll be facing a three-day weather system and that we’ll be forced to cancel 75% of our flights through our main airports in New York and Boston. Without putting any energy into determining exactly how we would cancel the flights, rebook customers and reschedule our employees, we can still work through how these major operational changes might impact our stakeholders. And how we might prepare to engage them if we ever found ourselves in this very likely situation.
And by the way, you may be thinking, hey Professor Barger, this doesn’t sound like a crisis to me, it’s just a few challenging days for an airline. In response, I would offer a couple of thoughts. First, having run an airline, an extended winter storm is a crisis for several groups of stakeholders as I’ll demonstrate shortly. Second, I think you’ll see that good crisis planning won’t only be valuable during a once in a century crisis. Your plans can be exceptionally useful. Even when an event might not be crisis level but still creates a significant distraction from normal operations.
This is why drawing a bright line between what’s a crisis and what’s just really a tough day at the office doesn’t tend to offer much value. Practices that we developed during crisis preparation will likely be very helpful, even when an event might not appear to be crisis level. So let’s get back to our scenario. We’re planning for our winter storm, a good place to start is with our list of stakeholders. JetBlue’s primary stakeholders are employees, customers, investors, regulators and the communities JetBlue serves. For an airline in this situation, it’s also worth thinking through how the media and JetBlue’s competitors might also react to the scenario.
Now in this video, I’m only going to walk you through a single one of JetBlue stakeholders, our customers. In the activity that follows, you’ll think through how each of JetBlue’s other stakeholders would likely be reacting to the major operational disruption that Jet Blue was planning for. Consider the following as a guide to working through the reactions of any stakeholder group to a particular variety of crisis. For JetBlue customers, if a winter storm was brewing that might threaten their plans with the airline, many would begin processing the potential crisis early. Quote, I have big plans coming up at some far away destination they might be thinking and I really need JetBlue to come through for me.
I’ve put down a big deposit or I’ve got a big business deal going down. And JetBlue better get me there, end quote. From these statements, we can see how JetBlue customers are beginning to frame their contract expectations. JetBlue better get me there. As the notional storm approaches and JetBlue decides to implement its pre-storm cancellation plan, how will JetBlue customers respond if their flight is one that is canceled? Will they happily accept JetBlue’s decisions and chalk up their misfortune to simply bad luck? Probably not. Here is where you’ll find the violation of contract expectations and we can use our model to work through their processing. When a customer discovers that JetBlue is cancelled their flight, failing to meet their expectations.
They begin their evaluation process, was JetBlue at fault? Quote, well, there is a storm coming they might think but why did they have to cancel MY flight? Why did they decide that I would have to suffer because they don’t know how to work around this weather? This is clearly their fault. They shouldn’t have canceled MY flight. So, responsibility has been established. In the eyes of this customer, JetBlue is clearly at fault. How might this customer evaluate the severity of the damage? Well, it depends on their perception of their loss. If this was a required business trip that the traveler had been dreading for months, this may be the greatest stroke of luck in history.
For many others however, the cancellation may mean a loss deposit, a delayed or forfeited business deal. Or cause some other major disappointment. In these cases, the impact of the cancellation would feel severe. From here in our model, we can estimate the degree of moral outrage a particular customer segment may develop. If they perceive damage was severe and it was JetBlue’s fault, the outrage may be extreme. It would be easy for us to expect that in these particular customers’ eyes, JetBlue would be perceived as a horrible company to do business with. I hate them and I’ll never fly them again is something that sadly I’ve heard many times even when mother nature didn’t give us too many options.
So if we did nothing else but cancel these customers’ flights, they would be outraged, hate us, never want to do business with us again and more than likely take some sort of legal action for recovery of their losses. We wouldn’t allow things to play out this way, of course, but our model tells us how things would end if we did. This example highlights what we can learn by running a scenario through our model. First we can see how important it is for us to understand the interests of our stakeholders, in this case our customers. For example, it would be good to know if our customers are leisure or business travelers.
Second, we can see that it would be beneficial for us to very proactively communicate with our stakeholders again customers in this case to soften their assessment of how the airline failed to meet their expectations. A contract violation and how the circumstances were beyond our control, the winter storm. While I know this isn’t rocket science, you can see how the model can help us make predictions even if they’re relatively intuitive. The reality is they won’t always be this easy to predict. Finally our model helps us see that we should be thinking through the ways to decrease the severity of the damage. Clearly in our example here, the best way to soften the impact of the cancellation is to provide alternatives.
Bonus points in fact if those alternatives were presented in a way that A, produced an outcome as close as possible to the original plan and B, required no additional effort or anxiety for the customer. Perhaps this could even be done in a way that actually produces the opposite of outrage and exceeds expectations to the point of increasing brand value and loyalty. In summary, while this expectations model isn’t designed to help you develop business strategy, you can see the utility in some scenario planning that will inform your crisis planning. And prepare you for not only minimizing the impact of a major disruption but might actually allow you to differentiate yourself from your competitors.
This I would say is a wonderful example of how to make some great tasting lemonade out of lemons.