Remember Toyota, Goldman Sachs, BP, Apple, Hewlett Packard and J&J? Just to name a few of the big name corporate crises we’ve seen this year. Instead of learning from the mistakes of others, companies seem to react in the same way each time a crisis breaks: by being defensive and denying any fault. In the midst of a corporate integrity crisis, companies tend to limp from one mistake to another. Bruised by an ‘unfair’ media, misunderstood by the public and unappreciated by the market, corporate leaders tend to hold their breath until the crisis is over and hope that the damage isn’t too great.
But it doesn’t have to be like that. Recognizing that integrity is an investment with a financial payoff can be empowering. Smart companies can learn how to build enormous integrity during a crisis and actually come out ahead. And they can do it without calling in the emergency troops, legions of PR and consulting experts waiting to make money from corporate missteps.
So here’s the single most important point for any manager to remember when a crisis hits: you are no longer in the [fill in the blank] business. You are in the trust business. And your job description is now all about building trust.
While there are plenty of examples of how not to handle an integrity crisis there are only a handful of positive role models. And here’s the reason why: how many managers consciously think about how to build trust and really know how to do it systematically?
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Many of the world’s leading firms are essentially creating a new “Corporate Integrity” function to improve company ethics. This is not just another corporate shake-up. Our research (See: http://cebviews.com/2011/01/10/integrating-integrity-into-every-decision/) on many of the firms creating this new function shows that it makes risk management easier, and improves financial performance and raises long-term shareholder return.
ReplyDeleteMatt Martell
CEB Views