Growth and Organizational Life Cycle: Is the winner the loser and the loser the winner? Time is the judge.
JetBlue in 2004:
JetBlue was ambitious in 2004, with a goal to grow into a company of 25,000 employees and 270 planes. David Neeleman, the founder and CEO of JetBlue at the time, is the center of the Fast Company article. The author shadowed Neeleman as he boarded a JetBlue flight to Salt Lake City after working a 14-hour-day. In contrast, the 1999 Harvard Business Review article is J. Peterman’s own chronicle of the many mistakes leading to the collapse of his own company — the J. Peterman company.
Neeleman was not a novice in the airline industry. He had started two small low-cost airlines Morris Air and WestJet before starting JetBlue. He was aware that his forte is in launching business, therefore, he made sure to surround himself with mature talents to help JetBlue grow. JetBlue COO, David Barger, oversaw the company’s operational matters, which resembles a bureaucratic control that ensures systematic efficiency.
Furthermore, JetBlue focuses heavily on culture building through their Principles of Leadership (POL) program. Neeleman and the company’s 25 officers worked hard on developing and teaching POL program to management at every level. This represented JetBlue’s effort to ensure that all employees understand the culture and the mission of the company.
Consequently, a clear strategy and mission statement helped JetBlue to be proactive for business changes as the company grow rapidly.
J. Peterman Company in 1999:
On the contrary, J. Peterman was a novice, and yet he was not surrounded by people of the same caliber as David Barger as he started his company in the cataloging business. Because he did not get proper guidance on how to implement control on a growing business, he was pushed by investor to keep growing until the growth became uncontrollable. J. Peterman Company grew outside of its core competence, as he claimed that the company was offering 2000 products by the end of its run.
As the company grew bigger, J.Peterman lacks a clear mission statement that would allow its employees to have a shared common purpose.
In addition, J. Peterman recognized that he did not build strong culture from the beginning. The newly hired upper managers strayed away from the company’s original products and promoted product proliferation without a clear strategy. And lastly, Peterman admitted having completely missed the power of the Internet and online retailing. The company needed to adapt from a catalogue model to e-commerce model to survive.
JetBlue, as described from the 2004 article, was positioned in a good organizational structure with mechanisms such as bureaucratic and clan controls to mitigate the adverse effect of growth. It seems unlikely that JetBlue will make the same mistakes as J.Peterman as long as it continues to have good complementary leaders such as Barger and Neeleman, and persistent culture training such as the POL program.
Resources:
- Peterman, J. (1999). The rise and fall of the J. Peterman Company. Harvard Business Review, 77(5), 59–59.
- Salter, C. (2004). AND NOW THE HARD PART Can JetBlue make the Leap from popular (and profitable) niche airline to major player without losing it’s soul?. Fast Company, 66–75.
