Tuesday, November 29, 2011
By now you've probably heard American Airlines has landed in bankruptcy. While it circled overhead longer than most of it's domestic brethren, it's finally landed on runway 11. Chapter 11 that is.
But AA's decent into bankruptcy really shouldn't come as a surprise. Just listen to it's CEO:
Sure, operating in a post-9-11 world, the recession and rising fuel prices didn't help. But last time I checked, Southwest Airlines, about to turn 38...as in 38 consecutive years of profitability...hasn't been functioning in an alternate universe. It reminds me of the team that makes excuses about the weather when it's opponent, playing in the exact same conditions, doesn't.
Did you notice that AA's CEO never uttered the word "customers" until prompted at the end? Everything he said was company and shareholder focused. Paradoxically, all you ever hear from Southwest is how unfair it is for us, customers, to pay bag and change fees. Hmm...
What AA's "leader" fails to truly recognize most of all is that he doesn't have a broke airline on his hands. He has a broken brand.
He said it will be "business as usual" for customers. That's a shame. Essentially, more nickel and dime-ing passengers rather than overtly focusing on creating a better experience for them.
But it doesn't sound like it will be "business as usual" for employees. More work for less pay and reductions in workforce, salary and benefits appear in the offing. I don't know about you, but if I were an employee, I'd be on the next plane out!
Do you know what routinely tops employee satisfaction studies in terms of what matters most to them? Having a clear understanding of the company's purpose and their role in it. Essentially, the brand. Not salary. Not vacation. Certainly not fear.
Like a plane with mechanical difficulties, the unraveling of most brands usually occurs under the skin - inside the organization at a cultural level - before it manifests itself at the surface. Undetected, it inevitably spells doom for the brand.
Like so many companies before them - Boston Market, Sharper Image, Circuit City - and now AA, the foundation of their failures was not understanding that you can't make decisions in boardrooms without impacting the brand.
Business decisions are about the company. Brand decisions are about the customers. Without customers, you don't have a company. Or at least one that people can trust.
Why is it that only Southwest Airlines gets it? (Despite never having filed for protection, I think JetBlue has fallen into the trap of making business not brand decisions once too often, i.e., stranded passengers on tarmacs for six-plus hours). Simple. SWA always makes brand decisions because it's business model is designed to support it's brand.
This exposes another flaw in most companies: They treat their business strategy and brand strategy as separate functions, rather than one. Brand should be your business - and entire company's - strategy. I call this "Brand-ness."
Brand-ness is creating a brand first and then figuring out how to monetize it, not creating a business and figuring out how to brand it.
It seems way too often anymore we hear: "Today, company X filed for bankruptcy?" But I can't ever recall hearing: "Today, brand X filed for bankruptcy."
These are my GUTS Feelings!