This report draws from in-depth interviews with more than 50 sustainability thought leaders and corporate CEOs around the world, including General Electric, Unilever, Nike, Royal Dutch Shell, Interface and BP. Shaped by the findings from those interviews, 1500 corporate executives and managers were surveyed about their perspectives on the intersection of sustainability and business strategy. Choose summary PDF or full E-Zine report (with PDF available within report – choose “Download” from the toolbar.)

Pundits interviewed in the print issue include Amory Lovins, Henry Mintzberg, Peter Schwartz, and Interface CEO, Ray Anderson. Online, you can also hear from John R. Ehrenfeld, Peter Senge and others…

© 2009 Gary Ralston

When the WHO global alert level for swine flu hit phase 5 (imminent) in April ‘09, some well-prepared business leaders were moving swiftly to enact existing plans to ensure they could continue to do business even if their employees and customers faced restrictions on travel (including commuting) and gathering in-person. Thankfully, a  full-blown pandemic did not materialize in the weeks after, but it still begs the question: Do you have a business continuity strategy?

A flu pandemic is only one of the ways your sales, production and distribution activities could be disrupted. Increasingly, weather extremes (with accompanying fires, floods, ice and snow) and unreliable power grids are making themselves felt. Last September, almost no one in the Midwest was prepared for the fallout of Hurricane Ike, the third most destructive to make landfall in the United States. In Ohio, alone, 1.8 million customers were without power – some for more than a week. In his excellent book, Hot, Flat and Crowded, Thomas Friedman explores, among other things, the increase in severe or unusual environmental activity we are living with. From that point of view, Global Warming is more aptly described as Global Weirding, and leaders should take heed that their past experience with weather trends may no longer prepare their business for what lies ahead.

Interestingly, when teams explore strategies around new models of sustainability for a business, they can sound much like the business continuity group planning down the hall. Options for conservation, telecommuting, distributed generation (generate power where it is needed, thus reducing transmission losses), solar heating and passive cooling, and reuse of “waste” streams as “feed” streams for other processes – all can help an organization be more resilient to disruption in infrastructure.

Strategies for business continuity vary by industry. A manufacturer – especially with only one production location -  faces a far less portable business than a knowledge firm. The manufacturer’s continuity strategy might, for instance, revolve around prevention of damage (i.e. from wind, fire or flood), combined with plans for distributed power generating capacity, letting them survive for some time off the grid. That said, most companies have a more portable “white-collar” or knowledge function, and it is here we will focus for the rest of this article.

Just recently, we were delighted (a bit amazed, really) to encounter a small knowledge business with a truly effective continuity plan. In a nearby community, a fire broke out and destroyed a good portion of a city block of retail and mixed use buildings. Sadly, the local retailers were hit the hardest, with insurance coverage their only hope. But while most tenants were sifting through the rubble, this one firm was actually attending meetings and getting on with business, thanks to mirrored offsite infrastructure and home offices. We reached out to offer help and alternate operating space, and were amazed that they were inconvenienced, but not at all desperate. Such foresight and planning is all too rare.

Business leaders who haven’t recently reviewed the cost of offsite backup for their knowledge and communication functions will be pleasantly surprised. A client in the “knowledge work” business recently compared the price of a 20-person state-of-the-art virtual office with the cost of a conventional “bunch of servers in a closet at headquarters, with a geek to run them” setup. The virtual office design relied on hosted servers and VOIP phone service, meaning that headquarters had only Internet service (with backup service), and each user had a laptop and VOIP phone on their desk. Everything else, including the phone system, was somewhere else in a datacenter – a datacenter with the resources for a truly robust continuity plan. Should anything happen to HQ – extended power outage, fire, flood or plague – the workers simply route their extensions to cellphones, pop their laptops up at home, or on a wireless card, and keep on producing.

Startup and running costs per year, including utilities, A/C, space savings and rent reduction, and technical support for this small operation were calculated to be tens of thousands of dollars per year less than their existing costs. What opportunities exist for savings in an operation of your scale?

For leaders and executives who have not already arranged for their knowledge workforce to work remotely, we have an article on Remote Collaboration from a Home Office (also good for Road Warriors). We’ve freshly reviewed and updated it. Also, ask your IT department about accessing your work computer remotely and securely via programs and services such as Virtual Private Networking (VPN), Microsoft Terminal Services, Remote Desktop Connection, Citrix Services, LogMeIn or GoToMyPC. Mac users are not shut out, either. Often, a Mac can control a PC just fine. If you happen to have a Mac at work, Google: “access your Mac remotely” for plenty of options, or try LogMeIn for Mac.

Business continuity planning, as important as it is when disaster strikes, is neglected when it is not aligned with the overall business strategy. The forces of disruption are on the rise, the cost to implement a business continuity plan is falling, and the synergy with sustainability efforts is growing. Review and revise (or create!) your plan to protect your customers, your employees, your community and your profits!

There’s a simple practice that can make an organization better, but while many managers talk about it, few write it down. They enforce “no asshole” rules. I apologize for the crudeness of the term – you might prefer to call them tyrants, bullies, boors, cruel bastards, or destructive narcissists, and so do I, at times. Some behavioral scientists refer to them in terms of psychological abuse, which they define as “the sustained display of hostile verbal and nonverbal behaviors, excluding physical contact.” But all that cold precision masks the fear and loathing these jerks leave in their wake. Somehow, when I see a mean-spirited person damaging others, no other term seems quite right.

- Robert I. Sutton
More Trouble Than They’re Worth
Breakthrough Articles for 2004 – HBR reprint R0402A

At some point in time, we all have worked with a person who is a mean-spirited jerk – who throws their weight or position around, and who uses fear to motivate, to manipulate, or to get his or her way. In short, we’ve all had the displeasure of working with an ‘asshole’.

The No Asshole Rule, Building a Civilized Workplace and Surviving in One That Isn’t, by Robert Sutton, is a fast and fun read (or listen) about keeping assholes out of your workplace, recognizing our own individual tendencies toward asshole-ism and about how some people leverage their assholed-ness for power and results (yes, some people actually do get what they want by being real jerks).

Sutton has two simple criteria for determining if someone is an asshole. First, if the person on the receiving end “feels depressed, humiliated or de-energized or belittled” and secondly if the “alleged asshole aims the venom at people who are less powerful rather than people who are more powerful.”

In Sutton’s language there are also temporary assholes. These are people who are simply having a bed day, in contrast to certified assholes – people who are persistently nasty and destructive jerks. Sutton also has the obligatory asshole self-test in his book so that you can understand if you, yourself, are of the certified or temporary variety.

The book is sprinkled with examples of how awful people can be, and “revenge” stories that show the lengths ‘victims’ will go to in response. It also highlights success stories, such as Gary Kelly, CEO of Southwest Airlines, and successful counter-examples, such as Steve Jobs of Apple, Inc. (See “Evil Genius” in Wired magazine for more…)

I think the most important question to discuss, particularly if you are and executive or business owner, is to what degree you are actually willing to condone assholes in your work place.

Sutton refers to a number of studies that describe the damage done to organizations by jerks. They undermine the productivity of a team or organization, cause good people to leave the workplace and in some instances, can put others at physical risk when allowed to continue.

Gary and I are frequently called in to help deal with employees who hold their organizations hostage through their nasty attitude and behavior. At times, these people are in what they perceive to be ‘key’ positions, by their productivity or specialized knowledge. These people are expert at pushing to the very limit of tolerance, using anything up to and including temper tantrums to get their way. What’s an organization to do??

Especially in this climate of reduced resources and economic challenges, business leaders must make the most of every employee to leverage the organization toward success. If you, like Sutton or Kelly, are interested in creating a great place to work where good talent is hired, invested in and grown for its incredible competitive advantage, then the ‘no asshole’ rule is a good one to adopt and keep at zero-tolerance.

© 2008 Ann Ralston and the respective copyright holders.

Love it or hate it, this book is bound to offer new views on cherished assumptions.

And boy, does author, Tim Ferriss have the power to polarize opinion. This controversial Princeton University guest lecturer has written what I consider to be an innovative antidote to a problem for our clients and their colleagues – trapping themselves into working for the sake of work. Right from the start, I would recommend you separate your opinion about Tim and his choices, style and values from the ideas and tools presented.

But read it you should. There is a good chance that your top performers, road warriors, independent thinkers and millennials (those born roughly from 1981-2000) have at least heard of Lifestyle Design. His premise is simple: working long hours for many years, deferring the activities of retirement until we are too old to participate in them (and possibly, can’t even afford them) is a broken model. As an alternative, he presents the concept and practice of Lifestyle Design – separating earning power from activities, incorporating mini-retirements throughout life, and re-focusing new-found free time on learning and service as a worthy pursuit.

I think this last point is important to highlight. Were I Tim, trying to reach the likes of Ann and me, I would have mentioned sooner that it’s not all about globe-trotting sybaritic pleasures. Many, if not most of the experienced Lifestyle Designers interviewed in the research discovered that they faced the challenge previously connected to retirees: When your income is no longer dependent upon your activity, you’ve given yourself a long holiday (or three) and you don’t care if you ever photograph another wild gazelle, then what do you do? Fortunately, there is a chapter on filling the void and inventing your next purpose.

For some entrepreneurs, especially, this book will shine a light on the common pattern of leaders who weave themselves indispensably into their business model – becoming a growth bottleneck, a key-person risk and a prisoner all at once. Similar to Gerber’s “The e-Myth, Revisited“, Ferriss offers leaders ways to disentangle from their processes – to move from self-employment to owning a business system.

Available in book and other formats, I recommend The 4-hour Workweek to anyone who must manage or collaborate with Lifestyle Designers, or aspires to become one. See you at the beach!

©2008 Gary Ralston all rights reserved.

Download a brief audio presentation by Tim Ferriss here.

We recommend this article, written by Remi Trudel and June Cotte of University of Western Ontario’s Ivey School of Business, and published in both the Wall Street Journal, and the MITSloan Management Review, and its related podcast.

In the study, the researchers set out to determine how much consumers were willing to pay for a commodity (in this case, coffee and t-shirts), when presented with the ethical track record of the company behind the product. They found that while consumers will pay a premium to a company with at least some socially responsible practices (25% organic cotton, for instance), they wouldn’t pay much more for a company using 100% organic cotton. On the flip side, researchers discovered that consumers punished clearly un-ethical companies (i.e. lacking ethnic diversity, hurting the environment, sweatshop labor), only buying their products at a steep discount.

The findings set up an interesting tension between the economics of the business (invest only enough in ethical practice to change perception and benefit from higher margins), and the values and principles of the company (operate in a socially-responsible manner in every way we can, within our business model). Nonetheless, the conclusion is that the consumer will reward socially responsible behavior and punish unethical behavior through their buying choices.

How do your customers rate your company?

- illustration: Rob Shepperson, wsj.com

As a global community, we have until 2015 to cap carbon dioxide emissions at 400 ppm, and 2 degrees Celsius average warming, or reach a tipping point leading to an unstoppable, runaway overheating of the planet.

That’s pretty much the bottom line from this extremely well-researched and well-written book by journalist and National Geographic Emerging Explorer, Mark Lynas. In Six Degrees, Lynas paints six scenarios of how the planet will be different – one for each degree Celsius of average global temperature increase. I’ve read the summaries for policymakers published by the Nobel Award-winning Intergovernmental Panel on Climate Change, and as clear as they are, they simply don’t give you the same gut-level grasp for just how much our current way of business – and of life – will be overturned.

National Geographic thought so, too, and used Mark’s work as the basis for their television special: Six Degrees Could Change the World. I suggest that you click on the Video tab, and work all the way through the various video clips. Consider, for instance, this chilling SFX shot of a New York subway car abandoned in a tunnel flooded by rising sea levels. Many of us reading this blog will easily live long enough to experience this possible future. And many of us will not want to look. Heck, I had trouble completing my research for this article because I felt overwhelmed by the scale and immediacy of the problem. But look, we must.

The situation is on top of us, and not nearly enough people appear to be paying attention.

In strategy, structure and systems, we are always on the lookout for feedback loops. Well, our planet has some enormous temperature-triggered positive feedback loops – tipping points or points of no return – just waiting for some species to trip them.

The first threshold, for carbon-cycle feedback, is around 3 degree Celsius of warming – 450 ppm of Carbon Dioxide (CO₂). Large amounts of Carbon Dioxide are predicted to be released from “reservoirs”, among them the burning forests of the Amazon and Malaysia, and the thawing Arctic icecaps and tundra.

The second threshold, for Siberian methane feedback, is around 4 degrees Celsius of warming – 550 ppm of Carbon Dioxide (CO₂). Large amounts of methane (23 times as potent as the same amount of Carbon Dioxide) are predicted to be released from “reservoirs”, such as those in Siberia, and methane hydrate in deep sea deposits.

So where are we now? In 2007, Carbon Dioxide (CO₂) was at 382 ppm (parts per million), and we currently increase about 2 ppm per year.

Lynas concludes, based upon his review of the available research, that in order to have even a 75 percent certainty of keeping temperatures below the magic 2-degree threshold, we have seven years to reverse the buildup of greenhouse gases globally and hit a safety target of around 400 ppm of Carbon Dioxide (CO₂). Greenhouse Gas (GHG) emissions must peak by or before 2015, and decline by 85 percent by 2050. If we let it get to 3 degrees (as early as 2050), feedback cycles kick in, and we risk a one-way ticket to 6 degrees of global warming and mass extinction on a scale not seen since the End-Permian age.

The numbers ought to chill us all to the bone, and then fire us into immediate re-thinking of all parts of our business and lifestyle, and the prospects for our descendants.

As Lynas put it:

“We humans, one species of animal among millions, have now become de facto guardians of the planet’s climate stability – a service that used to be provided free (given a few ups and downs) by nature. Without realizing it, we have appointed ourselves janitors, our sweaty ape hands resting heavily on the climatic thermostat. A more awesome responsibility can scarcely be imagined.”

Immediate Business Implications:

Business Carbon Emissions WILL be regulated: We all know that business has had a free ride, not having to account for the global cost of releasing Greenhouse Gases. In the following decades, financial statements and regulatory reports will also account for credits and debits of these gases. If your supply chain is carbon intensive, your costs will climb.

Consumers and regulators are demanding that business be accountable for the Total Lifecycle of products and services: Large business is already having to do this. Smaller businesses should be scrambling to figure out how to manage the cost of policing their entire supply chains, and extend their financial models to include liability for disposal. Learn more at sites such as The Climate Conservancy, a non-profit created by scientists from Stanford University.

There will be a social backlash against conspicuous consumption and the disposable economy, fueled by the climate crisis: As with so many of us, our parents grew up during the depression, when recycling went by another name – survival. In my case, our family began formally recycling about the time man first landed on the moon, and has never stopped. Fast forward 40 years. In my home town of Vancouver, BC, Canada, recycling is required, and garbage is spot-checked for infractions. Yet here in Central Ohio, Ann and I must pay for the privilege of recycling. Only two families do so on our street.

Today, US consumers have trashed ninety-nine percent of all goods they buy within six months of the date of purchase. Only one percent is still in use. The US – five percent of the world’s population – consumes 30 percent of the world’s resources and creates 30 percent of the world’s garbage. It is horrifying to think that much of the world’s population would be clamoring to emulate the US. Visit this website – www.storyofstuff.com – for a brilliant animated presentation sponsored by the Tides Foundation, and others.

Bottom line – if your business model depends on rampant consumerism, planned and perceived obsolescence and depends upon externalized costs, your free ride may run out, really soon. Which brings us to the next issue…

Public companies will be at even worse odds with the people leading them: As a system, the stock markets (i.e. Wall Street, stockholders, 24-year-old analysts in cubicles, news media, etc.) wants public corporations to focus short-term to produce unending growth of revenue and profit. As humans, the presidents and CEO’s go home to their families – children and grandchildren – whom they care about very much. It is natural that they would want to use all their supposed influence to give them a better future – say, reversing global warming. But to do so, they must go back to work and focus long-term – whereupon they are promptly fired for not keeping their eyes on quarterly profit performance.

In the end, we as a global community must institute a new definition of success for public companies. We must create markets that value planetary stewardship in addition to ROI in setting the share prices on the daily exchange.

There will be no silver bullet: There is no single thing that will reverse global warming, nor two, nor three. There will likely be seven to fifteen major initiatives, and thousands of minor ones. Of these options, conservation – using less in the first place – should be at the top of the list. This is great news for business, both large and small, because it means that no one will have a monopoly on the business opportunities presented by this crisis / opportunity. In the next decade, there will be a flow of funding and resources to this megaproject that will be measured in percentages of our planetary GDP.

A suggestion for how to build momentum to change:

Ann and I are acutely aware of our own immense discomfort in relating to this issue. Yet, we want to know reality even more, and that lets us take one more step. Here’s what you might consider:

1. Go watch the video footage at National Geographic’s  Six Degrees Could Change the World site, then read the summary for policymakers at the Intergovernmental Panel on Climate Change site.
2. Watch The Story of Stuff.
3. At the very least, read the last chapter – Choosing our Future – of Six Degrees: Our Future on a Hotter Planet, by Mark Lynas.
4. Browse The Climate Conservancy site.
5. For your business, schedule reviews of business strategy and process. Research what your suppliers are doing. Evaluate your liability for disposal of your products. Re-think how you generate wealth, and realign your strategy to mitigate, and even profit from reversing global warming.
6. In your personal life, take inventory on your progress toward reducing your environmental footprint. There are thousands of sites to help. We Can Solve the Climate Crisis, a project of the Alliance for Climate Protection, founded by Nobel Laureate, Al Gore, is a great site recommended by our colleagues. National Geographic launched The Green Guide, where I found this excellent article on switching to green power through our existing public utility. Google “Carbon Footprint” for many more options.

The biggest change in the business and social climate in our time will be the change from a society of consumption and competition to a society of sustainability and cooperation. Plan to be part of leading this change. And if it wouldn’t be too much bother, please start today. Seven years will pass in a blink of an eye.

© 2008 Gary Ralston and the respective copyright holders – all rights reserved

Ann and I have purchased over 200 audiobooks since 2003, a mix of business, non-fiction, fiction and instructional material. I have also tried a variety of podcasts and instructional videos, and have experimented with recording meetings with iPod microphone accessories. Beyond work, our entire family is into audiobooks. We have – no lie – SAVED summer holidays with the right selection of family-friendly audiobooks to while away the highway miles.

Ease of use and balance of features are keys to the iPod’s market success. We use iTunes to sync our library of media to our iPods. This setup is simple, elegant, and available on both our Mac and Windows computers. If you have another brand of media player, or are using Windows Media Player, the concepts should still apply.

Here are a few thoughts:

iPods are great for multitasking, but audiobooks, podcasts, and video all take more focus.

We listen to audiobooks when we can control interruptions for 15 or more minutes at a time. It’s easy to pause music, or even pop out the earbuds without a worry about your “place”. Not so with audiobooks. You don’t want to lose your place, or miss anything, so interruptions are awkward as you try to be polite while pulling out of the universe of the book and fumbling for the pause button. So we save the audiobooks for exercising, mowing the lawn, in-flight, walking the dog, or our regular three-hour drives to Indianapolis to visit family.

Video on my little iPod Nano is surprisingly sharp, but it requires my full, seated attention. I have instructional videos loaded, but don’t often have the occasion to watch them. If you fly much, or your commute involves public transit, video blogs may work better for you.

There is no shortage of material – but the narrator and the writing can make or break the experience.

If you are reading Harry Potter novels, you know J. K. Rowling, but if you are listening to books you come to know and love the voicings of narrator, Jim Dale. While I love and recommend the writings of business consultant, Ram Charan, I fatigue when he narrates his own material. Some books come alive in your hands – Tufte’s “The Visual Display of Quantitative Information” comes to mind – but flop when read aloud. Ann had to stop listening to a lovely book narrated by actor, Brendan Fraser, because she couldn’t reconcile the book’s content with her images of Fraser’s cartoonish Tarzan character from Disney’s “George of the Jungle”!

Almost all audio storefronts let you listen to a sample from the audio production. Make sure you can handle the narrator’s voice for 5 to 20 hours.

Watch out for abridged versions.

Audiobooks come in Unabridged and Abridged versions. Ann and I almost ALWAYS get unabridged versions of fiction. I accidentally bought and listened to an abridged version of “The DaVinci Code”, by Dan Brown – spoiled it for me. With his next book, I was extra-careful to select, “Angels and Demons (unabridged)”. Abridged versions of business books are usually okay.

iPods since the ‘mini’ can play Audiobooks faster or slower than normal.

Why would you change the speed?

• FASTER (For flying through business books – they CAN be dry, yes?),
• NORMAL (for fiction and listening to the incredible narrators,) and
• SLOWER (for note-taking or language study, I guess – I’ve never had occasion to use it).

The neat trick is that this doesn’t drive the voice pitch up to ‘chipmonk’ (Sorry, Alvin!) To set audiobook play speed on an iPod, choose Settings > Audiobooks and choose a speed. Setting the play speed affects audiobooks purchased from the iTunes Store or audible.com, or files converted to .aa or .m4b formats.

There are LIFETIMES of audiobook, podcast and spoken word media available.

Our favorite sources:

• Audiobooks: we subscribe to Audible.com. The iTunes Music Store also carries the Audible.com inventory, and has a few exclusives, but an Audible.com subscription is much more affordable.
• Podcasts: including free content, we use the iTunes Music Store. Great podcasts include David Maister’s business master class; CBC Radio 3 – new Canadian artists, eh?; BBC, PRI, PBS and NPR productions; Newspaper and newsmagazine blogs, including WSJ, NYT, WIRED, Globe & Mail…
• Instructional Media and Lectures: Apple collaborates with universities to present “iTunes U“. Much of the content is free, and the calibre of the lecturers is, well, genius.

iPods can be high quality RECORDING devices, too.

Need an audio recording of a presentation or meeting? There are a host of microphone accessories that turn your iPod into a stereo digital recorder. Read all about it at iLounge.com.

These are simply starting points. Go to your favorite websites and publications and poke around for podcasts you can subscribe to, directly, or through other storefronts. And while there’s plenty good for your business brain here, treat yourself to some of the amazing best selling fiction and incredible narration available, in every genre, both at the iTunes Music Store and Audible.com. Happy multitasking!

Interestingly, Skybus attempted a service recovery for my missed flight (December 26, 2007) 97 days later, on March 31, 2008. At first, I was mildly impressed. The message read:

Dear Skybus Customer:

We know that we caused you an inconvenience when we cancelled your Skybus flight and we apologize for that. Our most important initiative at Skybus now is to lower our cancellation rate and to improve our on-time performance.

Your business is very important to us, and we want to offer you an incentive to give us another try. We would like to offer you a $50 voucher good for travel on any Skybus flight, to any of our destinations, between April 1 and May 21, 2008.

All of the details are explained below. In order to take advantage of this special offer, you must log on to www.skybus.com and make your reservation no later than April 15.

All of us at Skybus are eager to see you again, and for you to take advantage of our nonstop flights, our new, full-size jets and our great destinations. We look forward to serving you soon.

Sincerely,
Mike Hodge
Chief Executive Officer

This “service recovery” happened a few days after the ouster of former CEO Bill Diffenderffer,  two days before VP Operations, Bud Sittig resigned (Columbus Dispatch story, here), and four days before filing for  protection under Chapter 11. So, less a service recovery and more a desperate last-minute move to ring up some cash? It would seem so.

Business Insight: As a business leader in their shoes, how would you decide what to do, as you watched the price of oil climb from $63.50 US / barrel to its current rate of over $110 US / barrel? What if you discovered that 90 to 95% of all US domestic routes were no longer viable with fuel prices at this level? What kind of discussion would you have with your board, behind closed doors? What would you say to your customers, suppliers, employees and their families? How ready would you be?

Now, back to your own business. In 2007 alone, over 800,000 consumers and over 28,000 businesses filed for bankruptcy protection. If you see your costs rising and suspect your markets are softening, do not wait passively. Call in your CFO, business consultant, corporate counsel and other business advisors, and contingency (opportunity?) plan to protect your future. Consider what you would do if the factors supporting your business success were to change significantly and / or abruptly. Set decision points now, when your head is clear, as far in advance as you can of any anticipated crisis.

Finally it is my strong opinion that all business leaders needs to revisit the various provisions of the US Bankruptcy Code, (Chapters 7, 11 and 13 most commonly), especially as updated by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (”BAPCPA”). Canadian readers may start here and here for corresponding information.

My concern is that for too many of the business owners I have met, bankruptcy is not well understood, connotes to them an unthinkable personal failure and moral weakness, and is to be avoided at all costs. I have seen leaders become sick with stress and denial, ruin their family lives, make worse and worse decisions, and descend into depression – a sort of self-destruction – rather than ground themselves in reality and work through their options. While bankruptcy is painful to anyone of integrity, the self-destructive aspects are not necessary – not in this country.

In reality, US and Canadian bankruptcy laws exist very much to encourage entrepreneurial risk, and make survivable a business failure, as discussed in this US department of state article. Also, it is rare, but not unheard of for a company to reorganize under such protection from creditors and emerge, profitable and more focused, to the benefit of all parties. So while no honest soul goes into business with the intent to go bankrupt, and the process is in no way fun, bankruptcy laws offer a safety net – albeit with thorns.

Bottom line: Learn from Skybus and other failed businesses. Protect your future by contingency planning with your trusted advisors well ahead of any crisis. Commit to study reality, and act with decisiveness to institute a contingency if your business model shows signs of failing. And finally, if things don’t pan out despite your best efforts, don’t self-destruct. Get the facts about bankruptcy today, and see it for what it is – one of the many tools of an entrepreneurial culture.

His four key topics:

1. Keep building.
2. Communicate intensively.
3. Evaluate your customers.
4. Just say no to across-the-board cuts.

Fortune also has an accompanying video interview of Ram.

“We’re sorry, your flight – Wednesday, December 26 – has been cancelled. Would you like to choose a different flight – no charge, or request a refund?”

In the past, this kind of note indicated a 10-minute adjustment in departure time – a non-event. I’ve flown SkyBus to Bellingham (BLI)  since it’s first flight. At 4.5 hours direct to the Pacific Northwest from Columbus, Ohio, I have saved SO much time compared to any other route to Vancouver, BC. My bags have never been lost. On occasion, I’ve flown for $10 – 30 per leg. SkyBus was my hero. As an aside, I was CRUSHED to hear service to BLI would end January 5, 2008 because it was unprofitable – I even planned to send the friendly, overworked team at SkyBus BLI a thank-you note. I felt a strange sense of pride that I had been on the first flight to BLI, and I would be aboard the last scheduled flight out. Did you know that when a new airline begins service at an airport, the fire trucks traditionally ‘baptize’ the first flight with a water cannon arch as it taxis? It’s really something to be part of. I was a raving fan.

But this was different. The delay was until the following Sunday – 5 (five) days!

This is NOT cool. And I soon find I’m not alone. I quickly rescheduled on my old faithful, Southwest Airlines, scrambled for a rental car at SeaTac, and but for 4 hours lost to a longer commute and net $50, I was back on plan. SkyBus received a refund request, and off to the airport I go…

…where I meet up with families on ski trips and other holiday travel trying to piece together itineraries, and grappling with radical, last-minute budget-busting fee increases because SkyBus has no ticket reciprocity agreements. One family of 5 WAS flying for $30 per seat. Now, on Southwest last-minute, plus a shuttle to Bellingham to pick up the one remaining SUV for rent in the area, I’d guess their bill jumped almost $1700 overnight. In their case, they missed the cancel notification and only discovered the bad news at the airport. Ouch.

Some business insights:

1. SkyBus was on a great track to building a loyal customer base, excited to promote the new low-cost carrier.
2. The SkyBus business model counted on high use (13 hours / day / /plane) of a 7-plane fleet, with the schedule extremely vulnerable to maintenance issues. They lost 18 flights by grounding only 2 planes.
3. The SkyBus model has no reciprocity with other carriers, and limited trip cancellation insurance, meaning that beyond a refund, the traveler carries the full burden of finding alternate transport.
4. The audience for low fares are often unprepared to handle drastic jumps in fares ($150 to $1850 for a family of 5).
5. When we used SkyBus for business, last-minute changes could escalate a $20 fare to $450 instantly, but we gladly paid because we saved so much time. Except for a lucky few, SkyBus actually isn’t that much cheaper.
6. From a PR standpoint, rescheduling the same or the next day is not such a big deal. Rescheduling five days later, is. It’s big the way contaminated Tylenol was big – if the event, itself, destroys consumer trust in the product or service, ONLY the company’s response and message will rebuild it. For any PR department, this ought to kick off a significant response.

Bottom line, I have seen little that indicates SkyBus is interested in making a service recovery, or is truly interested in the plight of its passengers. On the contrary, the message seems to be: “Grow up! You want low fares? Plan way ahead, change nothing, and accept the fact that we might well leave you stranded with no recourse from us.”

Can you feel the love?

For more on this story, The Columbus Dispatch has an excellent article on the cancellation and its implications.