David Neeleman’s Servant Leadership Approach
Leaders implement different leadership approaches while taking business decisions in order to find new and innovative solutions to organisational problems. Leaders have different leadership styles which assist them in evaluating the organisational problems and finding relevant solutions for them which result in benefiting the organisational as a whole. Servant leadership style is a common leadership approach which is used by leaders who are focused on fulfilling the demand of their customers and serving them better. Along with customers, this leadership philosophy includes a set of practices which assist the leaders in enriching people lives by building better organisations which ultimately create a more equal and caring world. David Neeleman is a good example of servant leader who puts the needs and interest of different stakeholders above others.
When JetBlue faced a significant threat which adversely affected the reputation of the company, then the servant leader approach of David Neeleman assisted him in finding appropriate solutions to the problems in order to improve the situation and regain the reputation of the company. In this report, the case study titled ‘David Neeleman: Flight Path of a Servant Leader (A)’ will be evaluated (George & Breitfelder, 2011). Firstly, the finding of the case study will be discussed to find the relevant issues based on problem-oriented method and how Neeleman used the servant leadership approach to resolve such issued will be discussed in the discussion section of the report. A conclusion will be drawn from the analysis and recommendations will be given based on which leaders can improve their leadership approach by taking business decisions for a wider range of stakeholders. SMART goals will be given in the report for leaders to achieve such targets which leads to sustaining the future growth of the enterprise.
In the case study, how David Neeleman has saved JetBlue and regained its reputation in the market is discussed. Neeleman has admitted that his customer-centric approach had been a crucial factor in his success based on which he was able to become a multimillionaire at the age of 33 even after failing in his business (George & Breitfelder, 2011). Although Neeleman failed in his Hawaiian travel business, however, it assisted him in understanding the crucial aspects of this business which helped him throughout his career. His next business venture was bought by Southwest Airlines which has assisted him in entering the airline industry. Due to his innovative approach, he was dissatisfied with the business model of Southwest. He was constantly giving innovative ideas and advice to Herb Kelleher, CEO of Southwest, to change and improve their business model by becoming more customers centric. However, Southwest Airlines were performing at its best, and the CEO was not determined to change any of its operations since they were working fine for the corporation. Neeleman knew that he has lots of business ideas regarding improving the airlines business model based on which he leaves Southwest Airline and decided to start his own airline company.
Case Study Analysis
Neeleman was determined, and after receiving a rejection from Richard Branson because he wanted to wait for change in government regulations, Neeleman meet a large number of investors which he was able to persuade for the investment such as Chase Capital, Weston Presidio, Soros’s Quantum Fund and many others. Based on his hard work and determination, Neeleman was able to raise $130 million for starting JetBlue Airline which is considered as the best-funded start-up in the history of the airline industry (Business Wire, 2018). From the beginning of building JetBlue, Neeleman was determined to apply his server leadership principles in the business based on which he implemented policies which are focused towards improving customer satisfaction. Neeleman was determined to put people in front of the business model such as customers and crew members. He wanted to provide an airline with the lowest cost possible and with high-quality services. He wanted to set an example as the CEO of the company to let people know that the corporation is focused towards fulfilling their needs. The leadership approach of Neeleman resulted in benefiting the company as well since it has a strong operational record in the first year by an on-time performance of 79 percent.
The company faced its first major issue on February 14, 2007, when the company cancelled over 1,000 of its flights due to an ice storm. Most of the flights on the runway were not able to return to the airport due to which passengers were stranded in nine JetBlue flights for six hours. It resulted in negatively affecting the reputation of the company which Neeleman had built, and it adversely affected its sales as well. In order to address this issue, Neeleman issued a public letter in which he apologised directly to the passengers who have to suffer loss due to the fault of the airline. He announced a compensation of $30 million for passengers to compensate the loss suffered by them (George & Breitfelder, 2011). He also issued a ‘Customer bill of rights’ based on which the company made various commitments towards fulfilling the needs of its customers in order to improve its services and regain its reputation in the market. Many shareholders argued whether these decisions of Neeleman were required at all or are they very bold and expensive move by Neeleman to regain the reputation of the company.
- Whether Neeleman was right investing the company’s money on decisions such as compensation for customers and customer bills of rights to regain the reputation of the company?
- Is there any alternative solution available which would have prevented a significant investment in the company to regain its reputation?
Servant leadership approach is referred to a leadership philosophy which is focused on benefit of different people involved in an organisation. The theory is opposite to the traditional leadership approaches in which powers are only exercised by top level management. The servant leadership approach requires leaders to take a set of practices which are focused towards enriches the lives of individuals and building a better organisation (Yukl, 2012). In this approach, the leaders put people in the front of the business and take decisions which are focused towards fulfilling their interest. David Neeleman applies the servant leadership approach while taking business decisions and it has displayed throughout his business decisions. For example, he quickly admitted the fault of the company after the valentine day incident and made a public apology on behalf of the corporation. Neeleman suffered from attention deficit disorder (ADD) from his childhood however he did not let this affect his life or career. After seeing his grandfather, he had understood the importance of customer satisfaction from an early stage of his life (George & Breitfelder, 2011). He understood that in order for a business to grow, customer satisfaction is a key requirement. With appropriate customer policies, organisations face difficulties while managing their operations.
Findings
Neeleman also opposed the decision of laying off employees for personal benefits of the organisation; he decided to reject the decision of firing employees based on the principle of servant leadership approach. This learning was displayed throughout his careers and in his leadership approach. The first key issue in the case study is that whether the decision of Neeleman is correct or are they an expensive way of improving the reputation of the company. Based on the analysis of servant leadership approach, the decision of Neeleman is correct for regaining the reputation of the corporation. Even after being on the top, JetBlue suffered a substantial loss in its sales and reputation because its failure to maintain an incident like the ice storm on valentine day due to which a large number of customers suffered. JetBlue was able to expand its operations and increase its sales due to its positive reputation in the market. Over 80 percent of the seats of its airlines were booked which was 12 percent higher than the industry average (George & Breitfelder, 2011). Based on this analysis, it can be seen that a customer-centric approach was the key factor which resulted in increasing the profitability of the enterprise. Customers prefer to pay less while still getting high-quality services from the airline.
However, due to the incident of valentine day, the reputation of JetBlue was suffered. Without a positive reputation, JetBlue would not able to compete with other large airline organisations such as United Airlines and Southwest Airlines. Neeleman knew this fact based on which he took everything to ensure that the reputation of the company is improved. He relied on his servant leadership approach to find the solution for this problem based on which he provided compensation to customers who suffered loss, and he also created bill of rights for customers to improve their services. Since the reputation of JetBlue was the key factor based on which it was able to attract customers, the decision of Neeleman was right because, without a positive reputation, JetBlue would have failed in the market (Avila, 2007). Although there are some alternative solutions available which could have used by Neeleman rather than implementing the principles of servant leadership approach. For example, rather than apologising from customers, JetBlue could have stood its ground. Customers would have eventually booked its tickets because it offers them at the lowest cost possible while providing high-quality services. Another option is that Neeleman could have blamed the whole incident on COO Barger since it was his responsibility to ensure that the operations of the company run smoothly.
Conclusion
In conclusion, the success of JetBlue Airline proves that leaders can rely on a servant leadership approach to focus on fulfilling the demand of their customers and employees to gain success in the market. Neeleman is a good example of servant leaders who focus on fulfilling the requirements of people in a corporation in order to build a better organisation. Based on his servant leadership principles, JetBlue was able to gain a positive market reputation which was a key factor in its success. However, after the valentine day incident, the reputation of the corporation was lost, and it adversely affected its overall sales as well. The decisions taken by Neeleman were right for the company since reputation is the key ingredient in the success of JetBlue airline based on which its resulted in resolving the issues faced by the organisation by regaining its reputation and sustaining its future growth.
Following recommendations can assist JetBlue in going back to its normal work frame, and they would prepare them the next “unforeseen” event.
- The corporation should prepare its staff members for unforeseen situations because it was the main issue with the Valentine incident. Members were present in the airport, but they were not trained to take any action. Thus, proper training for staff members is necessary.
- Strict compliance with customer bill of rights implemented by the company is necessary since it creates a unique image in the market which provides it a competitive advantage.
Specific
- On-the-job training for airport staff and crew members to prepare them for unforeseen incidents
- Meetings with employees to provide them information about customer bill of rights and how to comply with them in weekly customer focus group
Measurable
- Conducting quarterly role-play tests to measure and evaluate abilities of employee to understand whether they are prepared and skilled to handle unforeseen incidents
- Conducting written tests in which employees are required to answer questions about specific situations and how they will act in them
Attainable
- Training and tests will challenge employees to improve their skills which are reasonable to achieve
- Tests will improve knowledge of employees regarding company’s policies which would assist them in providing high-quality services to passengers
Relevant
- Low costs and high-quality customer service is relevant for JetBlue’s success, and these goals assist in sustaining its future growth by improving current services and avoid unforeseen risks
Time-bound
- One year training for new employees and six months training for old employees is enough to improve their performance
References
Avila, J. (2007). The JetBlue post mortem, Part 1: What went wrong?. Retrieved from https://www.cbsnews.com/news/the-jetblue-post-mortem-part-1-what-went-wrong/
Bailey, J. (2007). JetBlue’s C.E.O. Is ‘Mortified’ After Fliers Are Stranded. Retrieved from https://www.nytimes.com/2007/02/19/business/19jetblue.html
Business Wire. (2018). Joby Aviation Secures $100M in Series B Funding to Make Electric Vertical Take-off and Landing Transportation a Reality. Retrieved from https://www.businesswire.com/news/home/20180201005422/en/Joby-Aviation-Secures-100M-Series-Funding-Electric
George, B. and Breitfelder, M.D. (2011). David Neeleman: Flight Path of a Servant Leader (A). Harvard Business School Case 409-024, November 2008. (Revised May 2011)
Maynard, M. (2008). At JetBlue, Growing up is hard to do. Retrieved from https://www.nytimes.com/2008/10/05/business/05jet.html
Yukl, G.A. (2012). Leadership in organizations (8th Ed.). London: Pearson.
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