Tuesday, August 9, 2011

The Trust Factor

“The way to gain a good reputation is to endeavour to be what you desire to appear” – Socrates 469-399 BC.

2,500 years later Socrates still speaks the truth about the importance of practicing what you preach.

A good, sound reputation has multiple layers, but there are two key factors without which a good reputation cannot be; trust and good practice.

Trust and good practice have been familiar since primary school; nobody still believes the smart kid is smart after he is caught cheating on his spelling test and that remains true throughout life.

However, the consequences of cheating in later life have harsher consequences.

And while it is familiar, one extreme example that has preoccupied our news headlines in the past month suggests not everyone takes notice. That story has a moral which will be well reinforced by a reminder about how trust eventually breaks down due to bad practice – and the previously held reputation will never be regained.

This particular story started in May, when a court order was granted to allow investigation into allegations of phone hacking.

Then Sienna Miller was awarded $100,000 in reparation for having her private phone line illegally tapped by News of the World staff.

Illegal activity is never good practice.

But it gets worse. Shortly after it was revealed that News of the World also tapped into the voicemail box of a murdered girl and then began deleting her messages to create space for more, giving false hope to a family about their daughter being alive.

This revelation sparked a huge investigation into News of the World’s staff and practices. News of the World was closed down. People were arrested, including former CEO Rebekah Brooks. Statements were given and retracted. Rupert Murdoch had a foam pie launched at his face. Investigations are ongoing and the situation is not getting any prettier.

In fact, the situation is far past the point of being able to be rectified. Other publications run by Rupert Murdoch, such as the Daily and the Sunday Mirror, are feeling the sting of a lack of trust and have to prove that they are tightening their practices. News of the World will not be reopened. It could not even give money to charity in its final two issues; the charities approached turned down the money.

Not every breach of good practice is punished by a court trial. Nor is interfering in the case of a missing person forgivable even where a company has countless credits in their bank of credibility.

But what is illustrated is the way that extremely poor practice is like pressing the self destruct button.

Poor practice is a major cause of reputation ruin because today people become emotionally invested in the companies they choose to support.

It is rarely the case that the deciding factor of applying for a job is because it’s the only position of its kind. Nor that you fill the car at the closest petrol station. There is so much choice that those few extra cents or few extra miles are no longer enough as a point of difference. This is where the power of a good reputation can be seen.

So as Socrates said millennia ago, a good reputation can no longer be based on a projected image. It has to be backed by good practice.

Because a reputation is like a vase. It is able to be glued back together, but that just makes it all the more easily broken again.