
Marketing Math:
It takes 3-5 Years for
most companies to first turn a profit
It takes an
average of
6- years of intensive marketing to build top-of- mind Brand
Recognition
And when
something goes wrong?
Budget 8-years of
intensive PR and promotion to change the public's mind or
reverse a negative public image pertaining to a company, idea,
product or service.
Recent case
studies to look at which show this statistic in action:
GM's over-haul of the
Cadillac Brand beginning in 1989
Jack-in-the-Box's recovery from e-coli
JC Penny's' repositioning
campaign from the late '80's through today.
Tylenol's
recovery from package tampering deaths in the eighties
Companies to watch currently
digging out of a negative image or impropriety, (and likely
to survive):
Firestone
Catholic
Church
Martha
Stewart
if
she and her companies
begin dealing with the issue head on.
If not, she won't . She's got the following and the personality.
Her current evasiveness communicates she is better than everyone
else. Her market is middle America and this perception is
exactly what turns people against her. Her followers see her as
"Aunt Martha", a member of the family. She needs the
humility to apologize and the guts to remain humble for
the next few years. Her situation is actually an incredible
opportunity to build intimacy with the American public. Handled
properly, she can come out of this stronger than ever.
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career strategies for couples |
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How Corporate
America
Can Earn Back Trust
The 4 H’s and 4 R’s
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by Mark
Goulston, MD
To err is human;
To admit and accept
complete responsibility for it, divine.
Up until recently,
companies including Enron, Worldcom, Martha Stewart, and Arthur Andersen did not understand how
completely devastating betrayal of trust can be. Ironically
and sadly, they only realized it when they were devastated
in return. Deception compounded by elaborate schemes to
cover-up and prevent detection rape the emotional trust at
the core of investors, shareholders, employees and
ultimately erode public confidence and faith.
There is a way to repair the damage wrought by corporate
transgressions. Be forewarned. This solution is not for the
faint of heart or the uncommitted.
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The World is Watching
Regaining trust includes regaining the respect of
Investors, Stakeholders, Countries and Customers both
Domestic and International. One prominent
company's deceit reflects on all companies within that
country.
It takes
seconds to destroy trust, and years to rebuild it. ...
-- Anonymous |
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The Four H's:
The Fallout of
Impropriety & Deceit
When a company, CEO or Board of Directors commits an unethical, if
not immoral act, it triggers Four H's in investors, shareholders,
employees, and the public at large:
-
Hurt
-
Hate
-
Hesitation
to Trust
-
Holding on to Resentment
When a
company commits or is perceived to commit an unethical action,
stakeholders feel Hurt. Their emotional
trust is betrayed.
TOP
They
Hate the company and its leadership for
taking away that trust. Trust is the key factor and the most
important element for feeling safe and secure. They worry over what
else the leadership may be lying about.
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Furthermore they are now leery, skeptical and Hesitant to
trust anyone or anything associated with the maligned
company. If they trust again, they risk being betrayed again. Many
investors and employees who have been betrayed in this fashion think
that even if they make it through one such deception, they’ll be
unable to make it through another.
Finally, these people are going to Hold on to resentment.
With the passage of time most grudges will subside. Many however
may feel powerless to let it go.
Consider
the investors in and employees of Enron, how they feel and what they
currently are enduring. Their struggles and perceptions epitomize
the Four H's.
TOP
The Four R's:
Damage Control and Healing the Pain
The
corrective responses to the Four H's are the Four R's:
Remorse, Restitution, Rehabilitation and Request
for Forgiveness. If you are the CEO or part of the team
responsible for guiding your company or industry through such a
crisis, these are the steps you will need to take, (You is used
to describe an individual, management team or company).
In order to heal the hurt, the injured parties need to see and feel
your genuine Remorse. This means looking
stakeholders straight in the eye, seeing the damage you’ve done,
having them see that you see it and telling them that you know what
your action did to them. You can communicate this by saying to
them: “When we (you and your company) did X, you felt disappointed,
betrayed and hurt. And it’s going to take somewhere between a long
time and never before you would trust us again, because of how
devastated you felt because of what we did; isn’t that true?” After
they concur, follow up by saying to them: “We were wrong and I’m
sorry for what we did.” Your "I'm sorry" must be simple and clear
and not followed by excuses or "but it wouldn't have happened if
only ..." This is possibly the most difficult thing to do
(President Clinton wasn’t able to get closer to this than finally
saying after too long delay, “It was wrong.”). This may also
be why news interviewers frequently ask victims of corporate
exploitation if the company ever apologized directly to them.
TOP
As much as each stakeholder's
hurt needs remorse in order to heal, his/her anger needs vengeance
in order to be expunged. Restitution starts
when you provide a forum for the injured and aggrieved to verbally
vent their outrage, revulsion, disgust, disappointment directly at
you for the hurt and pain caused. They need to verbally “punch
themselves out” and feel completely drained of all the negative
feelings your betrayal engendered. This is the hard part. Picture
yourself releasing the steam in a pressure cooker just moments prior
to its explosion. If you try to stop the steam, you will get burned.
Stand there and listen, empathize and acknowledge without defending
yourself. This outpouring of emotion will help calm and quell
people’s need for revenge. The temperature in the pressure cooker
will drop to non-threatening level. With the anger expressed, each
will now be open to a discussion of a tangible payback. This
restitution will need to replace the chunk of their being they feel
you took away through misdeed.
TOP
Even with restitution, most
will remain hesitant to trust you. This is human nature. It is
also human nature to forgive once earned. To overcome this, your
stakeholders, partners, customers and peers must witness you
actively Rehabilitating yourself. Prove you
are sincere through action. Learn how to deal with all challenges
to your business without resorting to any immoral or unethical
actions. Make sure you’re strategies are sound (appear rational),
feel right (sit right), and seem doable (realistic). Integrity, a
virtuous attitude, consistency and delivered intent build character
and overcome the weariness and wariness of those you’ve hurt in
time. Character is what you do when you’re disappointed, angry,
frightened, bored or swathed in temptation…and nobody’s looking.
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Character is what you do when you’re disappointed,
angry, frightened, bored or swathed in temptation…and
nobody’s looking.
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Corporate culture will need to be addressed from the top down. As
the leader, your actions will be scrutinized by all within the
company. You must impress upon your team and those looking to you
through your words, gestures and actions the new and improved way of
handling issues rather than resorting to short cuts and trappings of
deceit. Without this demonstrative leadership, stakeholders will
believe that you are simply going through the motions to temporarily
pacify them. And like an addict you will return to your usual ways
when the crisis passes.
TOP
Delivering the 3 R’s of
Remorse, Restitution and Rehabilitation may not prevent the
injured from holding on to their resentment. If that’s the case,
you will need to exercise the 4th R –to
Request Forgiveness. Make this request only after you
have demonstrated a track record of remorse, restitution and
rehabilitation for at least six months (and perhaps even as long as
the length of the transgression). Forgiveness, like trust is
something that must be earned.
One hopeful point to keep in mind: If you demonstrate a solid track
record of Remorse, Restitution and Rehabilitation, and then Request
Forgiveness and are not forgiven, it is not you that is
unforgivable. Your investors, shareholders and employees are
unforgiving. You cannot control other's feelings. You can only be
true to and control yourself.
Most unforgiving people have become that way after being deceived. Nevertheless
most harbor a deep abiding ache to trust and have confidence again.
They want to trust; but they need
to trust without the fear of being betrayed or hurt again. Your
ability to handle this crisis may be the lifesaver they've been
reaching for, and the lift needed that will finally allow them to
believe in you and more
importantly to begin to believe in corporate America again.
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