How Will Your Company Adapt?

That is what adaptation looks like. In Darwinian terms, JetBlue is a new breed that is looking to capitalize on spaces in the competitive landscape left open by older, larger companies. Its greatest asset is fresh DNA. Unencumbered by habits built up by time, scale, or scope of operation, JetBlue hopes to survive by responding sensitively, nimbly, and quickly to turbulent times and catastrophic changes.

Safety Is Differentiation

That kind of agility is what Neeleman thought would catapult JetBlue to success when he started the company. He had spent 16 years in the industry and had cofounded and run Utah-based Morris Air, a regional carrier that Southwest Airlines acquired in 1993 for around $130 million. From the outset, he promoted JetBlue as the anti-airline airline, a colorful alternative to a monotonous industry where very little separates AA from UA.

With $130 million from backers J.P. Morgan Chase & Co. and Weston Presidio Capital and from financier George Soros, Neeleman set out to lure passengers with a small fleet of brand-new Airbus A320s, outfitted with such unconventional features as all-leather seats and real-time TV beamed to screens in every seat back. Neeleman's entry strategy was working beautifully. In an industry that had already fallen to a 10-year low before the September 11 attacks, JetBlue had earned a profit of $8.5 million on revenues of $78 million in the second quarter of 2001, the company's 10th-consecutive profitable month. JetBlue could boast a higher load factor than any other U.S. airline: 80% in the first six months of 2001. Its on-time performance over the same period was 80%, 7% higher than the industry average.

It was, Neeleman figured, the right time to take the company public. Last summer, attorneys and investment bankers drew up documents to register JetBlue's plans with the U.S. Securities and Exchange Commission. The filing date that they picked: September 11. Two hours before they were scheduled to file with the SEC, the first plane crashed into the World Trade Center.

The adaptations have started again. Even though capital is tight, JetBlue's lean operations and low-cost structure hold down the burn rate. For the time being, $20 million from the $5 billion government airline bailout, plus the pledge of fresh capital from its original backers, should keep the company in the air. But the tougher problem confronting JetBlue is the need to continue to adapt and respond to customers' changing concerns.

In the aftermath of September 11, leather seats and real-time TV may seem frivolous. And ultimately, in the current environment for air travel, it may be that only huge companies with deep pockets will pull through. But JetBlue's small size, its ability to respond to its customers, and Neeleman's willingness to move quickly and decisively may also give the company an all-important instinct for survival. Take safety: Neeleman has already made it his personal business to establish JetBlue as the first national carrier to install bulletproof, dead bolted cockpit doors on all of its aircraft. Every air carrier expects the Federal Aviation Administration to issue such a mandate. Neeleman is moving even before the FAA does.

"A lot of carriers will wait until the mandate is issued," says Neeleman. "We aren't waiting. We're small. We're nimble. We can do fleetwide upgrades in weeks instead of months. This is an area where we will take a leadership position."

Hours after the attacks, Neeleman was on the phone to Airbus, JetBlue's aircraft supplier, asking for prototype doors that would secure pilots from intruders. He's adamant about making the changes. "We do it first because we think it's the right thing to do," he says. "But then, for that, you're perceived as a company that can move quickly and that understands what needs to be done."

W.L. Gore: The Power of Adaptive Radiation

A company can only start from scratch once. After that, the DNA is mostly established. But some companies have in their natural capabilities an attribute that biologists call "adaptive radiation." Think of it as the ability of an organism to expand its geographic range by splitting into multiple species. It happened on the Hawaiian islands, when two small birds called honeycreepers ultimately produced more than 50 distinct species that swarmed the forests. It also happens with stunning regularity at W.L. Gore & Associates Inc. It's the principle that Gore uses to spin out adaptive uses of its original product, polytetraflouroethylene, or PTFE.

Today, Gore is a 43-year-old company with more than $1.5 billion in sales, more than 1,000 different products, and 6,000 employees -- all of which trace back to Bill Gore, who worked as a young chemist at DuPont, where he and his colleagues developed PTFE. In 1957, DuPont opted to focus on PTFE's nonstick qualities, which were marketed as Teflon. Gore recognized PTFE's unique properties as an insulator for wire and quit DuPont to start his own company.