Corporate America’s trust crisisArticle added by David Horsager on October 6, 2011
Ranked: #2577 (62 pts)
As difficult as it is to imagine, there is a greater problem facing corporate America than the current financial crisis. As the past has proven time and again, the current storm will pass and the economy will rebound. No, instead the worst threat to corporate executives in leading their organizations is a trust crisis.
From massive fraud in business to scandals in politics and athletics, the headlines point to a persistent problem of modern life and business — the global community in general is lacking in trust. And during a time when public faith in business is at the lowest level in recent history, a high amount of trust can serve as a company’s competitive advantage.
Trust is not a soft skill. Internally within organizations and externally when interacting with customers and suppliers, it is a measurable competency that affects outcomes more than anything else.
Trust, not money, is the true currency of business.
The crisis in corporate trust was kindled in the last decade by two of the biggest corporate scandals in American history. The question is, in the years following Enron and WorldCom, have executives changed their attitude toward the importance of reputation management?
Due to the evolution of technology and the Internet, today’s leaders — and their actions — are prominently visible to all of their key constituencies. Executives need to understand the importance of reputation, and can no longer stay hidden from the world for a constant spotlight shines on them.
Transparency grows trust, and trust affects how we interpret behavior. But when an organization undermines its credibility because its actions fail to mirror its mission statement, how can an executive salvage its reputation?
What happens when you need to rebuild trust in your organization? What if your brand — or worse yet, your name — no longer carries any weight? You have to get it back. To enjoy long-term success, you must be trusted.
Although there are many approaches to rebuilding trust, these are the 15 steps executives must follow to truly ensure their organizations regain the faith of their stakeholders:
1. Acknowledge the need to address issues.
When trust is lost, there is little time to lose. Discern the situation, but then quickly make a plan to rebuild it.
2. Move quickly to take personal responsibility for your role.
When we have wronged someone or broken his or her trust, it is our responsibility to make it right. An important strategy for yourself and those you work with is to take personal responsibility and spread praise. Not only will you gain respect, but your organization’s climate will inspire a supportive atmosphere where team members are willing to make healthy sacrifices.
3. Empathetically listen to all involved.
At the heart of good communication is listening. It is widely held that building and maintaining relationships between businesses and customers is most likely to occur when good communication between stakeholders exist.
4. Apologize sincerely.
Apologize in a way that satisfies the other person. Sometimes we might say that we are sorry and then not get the results we were hoping for. A sincere apology process usually includes stating the following:
1. I am sorry
5. Act on a solution or restitution.
2. That was my fault
3. What can I do to make it right or solve the problem?
For trust to be rebuilt, action must occur. Whether the break of trust occurred in the C-suite or not, move forward with consistency and integrity. By deciding to act in an honest way, you build esteem and confidence in your organization and with your customers. You will also regain self-esteem.
6. The more trust has been broken, the larger the rebranding effort.
Focus first on relationship trust, not on image. Sometimes public trust has been damaged too deeply, and there’s simply no way to get it back under the current structure. Because brand trust is generally weak, it is difficult to build a trusted brand. The more connected the brand is to strong credible relationships or a long consistent history, the stronger the brand will become.
7. Consider changing the company name, but only if you have made real organizational change.
If you change the outside name or logo after building a trusted inside (quality products or great service), this may be a valid option. When people stop trusting a company, they project that mistrust onto everything associated with it: the products, the people, the services, etc.
8. If ethical or judgment trust was broken, change leadership.
If a brand is not trusted anymore because of unethical decisions at the top of an organization, it is a serious problem. Restorative action must be taken immediately and real change in the leadership needs to occur.
One of the best first steps a new executive can take is to establish how much the organization’s operations have changed. To rebuild trust, an executive must prove that his or her organization is committed to delivering and serving its clients and customers consistently in a new way, and let the word out that things are different.
9. Clarify and share a new trusted vision.
Mean what you say and say what you mean. Share the truth. The trusted are candid; they are not afraid to tell the truth in the clearest terms possible. When people appear to be hiding something, we worry about what it could be and lose confidence.
10. Emphasize your commitment to the relationship over the issue.
The first step toward re-engaging suspicious customers is to show that you are open to dialogue and development. If your trust has been called into question, recognize it and take steps to be more clear and candid. When people feel they have been heard and what they say is important to you, regaining their trust will come easier.
11. Make and keep promises to customers, stakeholders and the public.
Consistently do what you say you will do, when you say you’ll do it. We have all been misled by leaders, salespeople, politicians and maybe even friends who have big promises but weak follow-through. Do not become one of them. Delivering more than expected is a guaranteed way to increase trust.
12. Establish accountability fail-safes to assure promises and rebuilding efforts are completed.
To rebuild trust, consider going outside your organization. By hiring outside counsel, accountants, consultants or auditors who have no possible conflict of interest, you show a willingness to find and reveal the untainted truth.
13. Deliver extraordinary and consistent customer service.
Encourage your first line of customer contact to over-deliver by either doing more than promised or by doing it faster than promised. It will make an unbelievable impression and will give your organization the number one type of advertising — word of mouth. Consistent customer service results in brand loyalty.
14. Make sure systems support rebuilding efforts.
When you need to create a major organizational change, it is essential that a specific process is planned for instituting improvements. For lasting change to take hold in your organization there needs to be a strong framework established. Keep and create systems that foster open communication, listening, reviewing and adjusting.
15. Move on.
Some mistakes are so big, and some people get so hurt or skeptical, that reconciliation will never be realistic. In those circumstances, do everything you can to apologize for the act that caused their mistrust. But after that, let it go and move on.
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