The Crisis of Trust in Companies and Beyond

The constant drip of admissions from J.P. Morgan Chase as the cost of the “London whale” rises and both dishonesty and folly is revealed comes in tandem with the latest round from Penn State. Former FBI Director Louis Freeh’s report unsparingly flays the leadership of that tarnished institution for a fundamental lack of concern for boys whose lives were being destroyed as individuals from janitors to the president were too interested in themselves to bother.

And in both cases, the people who knew and chose to look the other way now find that once you sow the wind, it’s the whirlwind that comes back.

Branding is not simply a game for consultants; it connects at a deep level the integrity and values of an organization with how it is viewed by the public and its customers and how it connects in turn with their values. One of the profound impacts of social media has been to begin to lay bare these and other connections in ways that go far beyond the occasional probes and revelations of press and whistle-blowers as transparency comes to be routinized rather than an exceptional experience.

At bottom therefore the issue is not about “brand” as a manipulable commodity to be burnished but integrity as a deep set of values that drive an organization by lining up its proclaimed sense of itself with how it really is and who its people are.

The issue for Penn State as for J.P.Morgan is whether what has been lost will be able to be recovered. What we already know is that this will not come soon or easy. We know how it is with the reputation of an individual. While corporations (for-profit and non) are persons only in a technical sense, their reputations are every bit as central to how the wider world sees them – and will be prepared to do business with them.

And (to pick up our much-blogged theme of social and the C-Suite) social media has only just begun to begin to open every one of our organizations and their commitments and their practices to Freeh-report style merciless scrutiny.

The Real Loss For JPMorgan Chase: Their Integrity.

3 thoughts on “The Crisis of Trust in Companies and Beyond

  1. Thank you for highlighting the course of transparency. More than a million of organizations take steps to improve that, by inviting independent external assessments beyond mandatory financial audits, such as for management system aspects of quality and customer satisfaction (ISO 9001), environment (ISO 14001) and other similar standards. A few thousand organizations subscribe to more holistic approaches like the UN Global Compact and assessment by the GRI Global Reporting Initiative. Pioneering organizations show us the next edge by embracing workplace democracy principles and getting their application verified by independent third parties such as WorldBlu.

    As you say, the impact of social media connects more people, markets, and customers Thank you for highlighting the course of transparency. More than a million of organizations take steps to improve that, by inviting independent external assessments beyond mandatory financial audits, such as for management system aspects of quality and customer satisfaction (ISO 9001), environment (ISO 14001) and other similar standards. A few thousand organizations subscribe to more holistic approaches like the UN Global Compact and assessment by the GRI Global Reporting Initiative. Pioneering organizations show us the next edge by embracing workplace democracy principles and getting their application verified by independent third parties such as WorldBlu.

    As you say, the impact of social media will be felt. New tools connect more people, markets, and customers faster and cheaper, to shape reputation and build business selection pressure towards corporate transparency.

    Either way, we can find new balance on the spectrum between trust and verify. People shape reputation and build business selection pressure towards corporate transparency.

    Either way, we may be heading towards new balance on the spectrum between trust and verify.

    • Thanks for a very thoughtful response. Much to mull and not much to add, except that the pace of change and the pressure for transparency/alignment/integrity are in my view moving a lot faster than most of the relevant people realize – primarily through the impact of social . . . .

      Nigel

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