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Utah Business

These brands used COVID as a way to innovate and come back stronger.

These brands are doing COVID right

Soon after March 20th, as shelter-in-place orders began shutting down much of the US economy, I was on a board call for JetBlue Airways. 

The focus of this meeting was to discuss the specific steps we should take to maintain trust with our JetBlue customers and crewmembers. We had built high levels of trust over many years, but if we failed to rise to the challenge of the current moment, it was all at stake. As Warren Buffet once said: “It takes 20 years to build a reputation and five minutes to ruin it.”

The fitness studio that moved online

The business world is littered with once-great companies who failed to face reality. As facts on the ground change, management must take decisive and swift action. No dithering.

At Peterson Partners, the Utah-based investment firm I founded twenty years ago, we worked with our entrepreneurs to adapt fast. When COVID-19 struck, Anne Mahlum, founder and CEO of studio fitness company [solidcore], and her team immediately began to provide online workout classes. The willingness to confront the reality of the situation and temporarily close all in-person studio classes, and to move to an online platform, instilled trust with [solidcore]’s customers. As [solidcore] begins to carefully reopen many of their fitness studios, the trust built online has been critical. 

The optometry practice that cut executive pay

When you’re out of cash, you’re out of business. In times of crisis, survival is Job One. This means cutting back on capital expenditures and reducing operating expenses, including debt and rent relief. At Rev360, a growing group of 19 optometry practices, management acted decisively to preserve liquidity and extend the runway by cutting executive pay by 25 percent, enacting furloughs where needed, and negotiating rent relief and other deferrals with vendors. At JetBlue, the board stopped taking fees, management cut its salaries in half, and we parked 170 planes.

The companies that conduct layoffs with compassion

When I read reports that Uber laid off 3,500 employees via three-minute zoom calls, I shared with fellow business leaders an article I had just published in the March/April edition of the Harvard Business Review on firing with compassion. During tough times, more communication is always better, and kindness―even just listening to concerns―is smart. People will never forget how they were made to feel during times of great stress.  

At FranklinCovey, where I’ve served for almost 30 years on the board, we made available for free certain online Leader-in-Me courses for families struggling with homeschooling. Little things like this can make all the difference when it comes to rebuilding trust. 

The outdoor apparel company that gives back to relief efforts

Your brand is your most enduring asset. It is your “promise” to your customers, the covenant you’ve made with them. How you act in a crisis will be remembered. Depending on your business, you may need to re-imagine your brand post-COVID-19.  

At Cotopaxi, Davis Smith―another founder and entrepreneur we’ve backed at Peterson Partners―has turned the crisis into an opportunity to give back and support those in need, consistent with their brand from the beginning. All proceeds for their #OneUtah apparel offering are dedicated to COVID-19 relief efforts in Utah, their home state. 

When purchasing a face mask from Cotopaxi, they donate a high-quality face mask to someone in need through their partnership with nonprofit Mercy Corps. These steps to do good and help those in need strengthen Cotopaxi’s brand, and ultimately deepen trust levels with their customers.  

This is an opportunity to come back stronger

For organizations that rise to the occasion, an even stronger brand may emerge post-crisis. Well-managed, a crisis can be an opportunity to build deeper levels of trust that can lead to deeper employee commitment and a customer enthusiasm that results in greater market share. 

The entire airline industry has taken a major hit. Yet, I’m confident that an even stronger and more enduring JetBlue brand will emerge on the other side of COVID-19 as we rebuild trust with customers. By confronting reality, extending the runway, over-communicating, and protecting our brand, any business can emerge stronger for all the effort. 

Joel Peterson is the Founding Partner and Chairman of Peterson Partners, a Salt Lake City-based investment management firm with $1 billion under management. Joel has been on the faculty at the Graduate School of Business at Stanford University since 1992, teaching courses in real estate investment, entrepreneurship, and leadership. Peterson Partners has invested in over 200 companies through 13 funds in four primary asset classes: growth-oriented private equity, venture capital, real estate, and search funds. Joel served as Chairman of the Board of Overseers at the Hoover Institution at Stanford from 2016 to 2019. He also served as Chairman of the Board at JetBlue Airways for 12 years (2008-2020). Joel is also on the boards of Franklin Covey and Packsize. Prior to Stanford Business School and founding Peterson Partners, Joel was Chief Executive Officer of Trammell Crow Company, then the world's largest private commercial real estate development firm. Joel earned an MBA from Harvard Business School and received his Bachelor's degree from Brigham Young University, where he was valedictorian and student body president.