2. Foster the key behaviors for a one-company culture. Implementing a market-driven strategy in a complex world requires companies to build a globally integrated culture that enables employees at all levels to consistently practice trustworthy behaviors in all facets of the business. This should be accomplished with transparency inside and outside the company, and it increasingly demands the help of a fully integrated corporate communications function that supports senior leadership. The transformation of Philips over the last decade from a high-volume electronics firm into a much more diverse healthcare, lighting, and consumer lifestyle company is a noteworthy example. Having established a coherent business portfolio and simplified the company’s global operating model, Philips CEO Gerard Kleisterlee launched two major communication campaigns: “One Philips” revitalized the company’s identity internally, and “Sense and Simplicity” repositioned its brand around the world. These efforts have helped provide a clear road map for all employees to follow in acting as one company.
3. Nurture reputational capital. Internal business practices must institutionalize the alignment of the company’s reputation with its actual behavior. This typically involves closing any gaps that may exist between corporate identity and image. To recognize these gaps, trustworthy companies maintain agile reputation “radar” systems, in which decision makers are continually informed of how outsiders see the company, and of strategic opportunities for or risks to reputational capital. Nurturing reputational capital also typically requires rethinking corporate social responsibility programs as vehicles for competitive advantage, distinguishing the company’s practices and overall capabilities from those of competitors.
4. Harness social media to strengthen relationships. Companies must empower employee communities with new collaboration skills and tools. They should facilitate dialogues with key constituents to better understand what matters to them and to address emerging problems early. During the 2008–09 recession, Ford Motor Company took advantage of its website and social media platforms to launch live conversations among suppliers, dealers, and customers. These were designed to bring Ford’s bright performance — bright compared with the looming bankruptcies and bailouts involving rivals GM and Chrysler — to everyone’s attention.
5. Integrate rigorous crisis management policies and procedures to quickly address behavioral lapses. Rapid response capabilities at local, regional, and corporate levels are critical to applying the five rules of protecting the organization’s reputation during a potentially damaging incident: frame the problem; tell the story you want to tell; execute a practical plan that mitigates the problem, minimizes the damage, and offers concrete steps to rebuild confidence among directly affected constituents; tell the truth; and transform the crisis into strategic opportunities to build reputational capital.
Once you have decided to become a trustworthy company, there is no turning back. Organizations that fail to develop trustworthiness completely or simply lose their way are vulnerable to significant criticism and backlash — which can result in a complete loss of credibility. The choice between neglect and building trustworthiness as a core capability may well become vital for competitive advantage in a world looking for institutions it can count on for the long term.
Reprint No. 10401
- Paul A. Argenti is a professor of corporate communication at the Tuck School of Business at Dartmouth College. He specializes in strategy implementation through effective corporate communication.
- James Lytton-Hitchins is a Booz & Company associate based in London. He is part of the firm’s organization, change, and leadership team and specializes in helping clients develop performance improvement strategies and capabilities.
- Richard Verity is a Booz & Company partner based in London and leads the firm’s global chemicals practice. He specializes in supply chain management, organization, and corporate transformation.