The power of trust

On the internal versus external trust challenge

One of the basic principles that we found about trust is that trust is built from the inside out. It’s almost impossible to imagine a company being able to be trusted by its customers if it’s not trusted by its employees. Like any other business process, there are steps you have to follow in order to truly regain trust. All of these go against the normal playbook in companies attending to legal matters first, and really not attending to these trust issues. It’s not that the cost and liability issues related to a scandal aren’t huge; it’s more that regaining trust is a different goal, and if you want a different outcome, you have to work a different process.

It’s almost impossible to imagine a company being able to be trusted by its customers if it’s not trusted by its employees.

The first step of the process is to take responsibility for the harm you’ve created and to apologize for it. In fact, trust has a moral domain, and one of the most important elements is peoples’ ability to take responsibility for the impacts that they cause. That’s one of the foundation elements on which we trust companies and other individuals. So the first thing you have to do is to actually say, “We did this thing, we know it’s wrong, and we’re so sorry for the problems that we caused.”

The second step—and this gets hard—is to fix accountability for what was wrong. Now, this is a place where most companies pull back and they say, “Well, you know, it was those people down at the bottom who did these things.” But peoples’ demand for fairness is that they know the companies are hierarchies, and they reasonably, in a moral sense, hold the person at the top of that hierarchy responsible for what happens on his or her watch.

Now, there’s actually some interesting research that says that you can punish CEOs and get the same effect, like take away some compensation. But what people care about is that the person who is responsible—really responsible—for what goes on be held accountable. And then the third step is a long-term strategy for trying to fix what caused the breach in the first place.

So it’s these three steps: apologize, fix accountability, and manage the long-term foundation issues that created the breach in the first place.