“Trust is earned when actions meet words.”Chris Butler
Organizations today cannot prosper unless their business model is built upon trust. Today more than ever, customers, employees, the media, and communities demand trustworthy organizations. The feeling of integrity and discipline in what organizations say and preach can no longer be taken for granted, as failing to do so will lead to poor organizational performance.
Customers can easily change to a competitors’ product or service, employees can invest their time and energy in other companies, investors can take their money elsewhere, and communities can build negative consumer sentiment towards a brand. As a consequence, trust becomes a key asset for organizations to capitalize upon.
In business, relationships must be genuinely built – just as those in real life. That said, relationships should be based upon connection rather than interests. Only those relationships based upon authenticity rather than transaction will be the ones that will surpass the test of time. Trust, however, cannot be established upon force. Instead, trust requires stakeholders to immerse their minds and hearts towards the organization they support either through their time, energy, resources, or money.
Organizations that fail to integrate trust within their culture will have to face people’s negative sentiment, which can, as some organizations have experienced, have devastating financial and social consequences. Such were the recent cases with Volkswagen, Boeing, and Wells Fargo.
How Volkswagen’s Emission Scandal Violated Consumer Trust
In 2015, in a marketing effort to boost sales through ‘low-emission’ vehicles, Volkswagen installed in more than 11 million of their vehicles worldwide a software that cheated emission tests. Such software detected the moment the cars were being tested and inaccurately displayed the cars’ emissions performance to manipulate the results.
When the software was functioning, VW’s engines entered a safety mode in which its vehicles ran in low power. However, once the software stopped functioning, VW’s cars emitted 40 times more pollution than what was allowed in the US. While the financial fines and costs for VW escalated to a massive $18 billion, the financial costs do not compare to the loss of consumer trust, employees’ morale, and worldwide sentiment towards Volkswagen. Money can always be recuperated. Trust towards their brand, on the other hand, is a whole different story.
Activities and operations misaligned with an organization’s values and vision will inevitably harm an organization’s reputation. Pursuing profits over the greater good has its consequences – both socially and financially.
Volkswagen’s vision, for instance, is to “make this world a mobile, sustainable place with access to all the citizens.” Furthermore, its core values include those of integrity, servant’s attitude, and accountability.
By placing the pursuit of profits above what the organization stands for, Volkswagen’s executives have tainted the company’s image and reputation worldwide. By purposely cheating the emission tests, which led to a worldwide scandal, Volkswagen has violated everything they stand for – proving to the world that their business activities and decisions uphold neither their organizational vision nor their core values.
How Wells Fargo’s Toxic Culture Breached Consumer Trust
In 2016, Wells Fargo massively violated consumer trust in an effort to spur its sales.
It has been discovered that Wells Fargo has created more than 4 million fake deposit accounts and more than 500,000 fake credit cards under customer accounts without their consent. When such unethical behavior was discovered by the authorities, the financial costs were devastating for Wells Fargo. The company had to pay more than $628 million in class-action lawsuits, class-action settlements with customers, and in customer refunds. Yet, just as it happened to Volkswagen, Wells Fargo’s financial fines do not compare with the costs of a tainted company reputation and a deteriorated public image.
Wells Fargo, a company whose vision is to “satisfy our customers’ financial needs and help them succeed financially” has clearly demonstrated that its weak corporate culture does not live up to what it claims to stand for. It gets even worse when you check their company values – those of ethics, doing what’s right for the customer, and leadership.
How authentically have they been living up to them? Did employees even know those where the organizational values? If they did, why didn’t they live up to them?
Here’s the thing about organizational performance: it’s not about the size or the amount of resources an organization may have that empower organizations to adapt when in times of change or in adversity, but the tenacity of its culture. Organizations whose values are neglected by its work culture, as Wells Fargo has demonstrated, will be more prone to end up in unethical behaviors and scandals – creating long lasting harm to their reputation and public image.
Boeing’s 747-Max Catastrophes
More recently, Boeing faced and is currently facing its most dramatic challenge in its company history.
In 2019, two Boeing 737 Max planes – the Lion Air Flight 610 and the Ethiopian Airlines Flight 302 – crashed minutes after takeoff, killing a total of 346 passengers. The authorities, as a result, grounded all Boeing 737 Max flights worldwide.
After thorough investigations, the authorities found out that Boeing has failed to properly instruct both airlines and pilots and crew members about how to solve possible technical issues if their newly installed software malfunctioned. After the investigation’s evidence was presented, Boeing executives admitted that they have rebuffed a safety system that could’ve played an important role in preventing such catastrophes to keep their operating costs low. In other words, they placed profits ahead of their passengers’ safety and livelihood. They have completely disregarded the lives of their stakeholders.
Boeing, one of the world’s largest and most important companies, claims to “connect, protect, explore and inspire the world through aerospace innovation.” Moreover, Boeing affirms to be guided by values such as “integrity, quality, safety, trust, corporate citizenship, and stakeholder success.” Clearly the company has failed to live up to its values.
By pursuing profits over the greater good, Boeing has neglected everything they stand for. Yes, there were terrible financial consequences in the form of fines, settlements, and lawsuits for the organization, but again those do not compare to the way Boeing has damaged its reputation and public image. It’s no surprise that airports around the globe might encounter terrified customers awaiting to board Boeing’s planes. It’s no surprise that Boeing’s investors might be taking their money to invest somewhere else. And is certainly no surprise that employees might be looking to invest their time and energy somewhere else. By abandoning their roots and core values, Boeing has sacrificed everything they claimed to hold dear.
Company Cultures Ought to Founded Upon Trust
Authenticity, the degree to which actions and words align, will define popular sentiment towards both people and organizations. Authenticity matters. In this world where one can easily filter everything, either through social media, misleading ads, or overpromising, authenticity matters more than ever. It matters to all organizational stakeholders. Organizations will be held accountable for how authentically they conduct their business operations. There is no such thing as ‘hiding’ in the 21st century. Never before has it been so easy to inform, voice opinions, or share thoughts with the world.
Organizations built upon trust are practicing enlightening self-interest. Employees won’t trust organizations that do not act with integrity. Customers won’t support firms whose products and services overpromise and under-deliver nor those with misleading advertising. Investors won’t invest their money in untrustworthy organizations who aren’t transparent on their intentions.
Damaged public images – such as those of Volkswagen, Wells Fargo, and Boeing – have dramatic and long-lasting consequences for organizations. There isn’t sufficient advertising or marketing efforts that can be performed that will undo consumers’ negative sentiment towards their organization. Trust isn’t a matter of persuasion or convincing, it cannot be forced. Trust must be earned.
Trust emerges from within – it evolves and develops as a result. As a result of people sharing common ground. As a result of people collaborating with each other. As a result of feeling safe – safe to be who they are, to bring their most authentic self to work, and feeling safe to trust their fellow colleagues and customers.
Organizations who work hard to cultivate and foster a safe work environment will be able to provide its employees the emotional feeling of belonginess towards their employer, deriving in greater productivity, morale, and performance from its employees. Building trusting organizations is not only the right thing to do, it’s also the wisest business decision to embrace. It derives in greater financial and organizational performance.
Authenticity is the Path to Win Customers’ Hearts
Trustworthy organizations, those that will lead change and progress within the ecosystems in which they operate, are those led with human values. In other words, organizations where empathy and connection are encouraged will be the ones to outlive and outperform competitors. As previously mentioned, trust starts from inside the organization. It’s not the effective ads that win over customers. It’s not compelling marketing initiatives that win over the press. Those are all external. Trust emerges from the feeling of camaraderie prevailing inside the organization’s walls.
Employees should work first and foremost for each other, then for their organization. Coming to working shouldn’t be an obligation, it should be something performed pridefully. And leaders at the organization ought not to command, micro-manage, or control. Leaders ought to empower their teams through their guidance and direction for them to act with autonomy.
Leaders must understand that obedient employees – those who just do what they are told – are nothing more than deadwood. Leaders must instead build responsible employees – those who would do what’s right and uphold the company’s values even in the most complicated of circumstances.
There is no path more straightforward towards winning consumer trust than authenticity. Organizations authentically doing business will attract both customers and top talent. Without authenticity, there is no integrity. Without integrity, there is no sense of right and wrong. And absent a sense of right and wrong has devastating consequences.
Business leaders ought to know and understand, at all times, both what their organization stands for as well as the values through which they will support the causes their organization are championing. Winning over customers and employees requires authenticity. Authenticity requires living up to one’s values and making sure that what is being said is also being done.
Organizations that authentically do business are those that will stand up for what they represent. And organizations that clearly understand what they represent will be the ones to withstand the test of time.