Kickstarter and Volkswagen are very different companies. Last week, one company took a bold step into broadening trust and conscious capitalism, and the other sunk into vast dishonesty and lack of a moral core. Kickstarter is the first, and Volkswagen is the latter. Unfortunately, you will likely read more about Volkswagen, and the Kickstarter move may have gone unnoticed.
Trust is vital in any business, and leaders in any organization need to be trustworthy in their actions and accountability. These two stories diverge – one questioning whether corporations ever learn anything about trust, and the other holding a bright light on how corporations can be more.
Volkswagen and Distrust
Let’s dive into the worst one first. I own a 2012 Volkswagen Passat TDI. At this point, my car does not seem to be in the mix where the cheating was involved, yet I am impacted by the devaluation of the brand and the questionable view on diesel as being green. (Update: I finally received a letter from VW, and my car is in the recall now.)
The question that immediately arises in these situations is “how could this happen?” From various articles, a theme of pursuing being the number one auto manufacturer in the world at all costs is developing.
Volkswagen differentiated their offering by delivering a green alternative that got great mileage per gallon. Many auto manufacturers did not have an offering that could compete. The environmental-friendly element was essential, along with the compelling mileage per tank. With this combination, Volkswagen thought they had an opening to gain market share more quickly.
What seemed to happen is the market share goal became more important than sound principles and beliefs. Fast growth was better than smart growth. Market share was more important than trust. Growth over trust is never right. Eventually, the lies always catch up to the truth. Now, the Volkswagen community suffers from their dishonesty and likely criminal behavior.
- Company value lost — $18 billion in possible fines, $7 billion set aside to correct the lie, over $15 billion in market cap evaporated
- Customer value lost – 11 million vehicles negatively impacted – meaning 11 million customers
- Market loss – immeasurable in the impact on green diesel technology and efforts
What can be done to regain trust?
As an owner, I am unsure. So far, no email communication for Volkswagen has occurred. Communicating with customers is a minimal requirement, and it should have happened two days ago. Volkswagen needs to be bold in their response. They could:
- Agree to buyback every diesel sold during the timeframe of the deceitful actions
- Give every diesel owner a check for $10,000 to account for the value loss and use for the purchase of a different car
- Deliver a multi-million dollar contribution to a university or environmental organization innovating in green auto fuel technology, including diesel
Taking one or more of the corrective actions will begin to show that Volkswagen is ready to step-up to their wrongdoing and repair the relationships and values damaged.
Market share at any cost is costly. Trust at all costs delivers greater value all the time.
Kickstarter Kicking Trust Up a Level
Kickstarter offers a very different story. Kickstarter raised the bar of trust by announcing they were becoming a B or Benefit Corporation, aligning with the idea of purpose over profit. As their founders stated in a blog post:
“Benefit Corporations are for-profit companies that are obligated to consider the impact of their decisions on society, not only shareholders. Radically, positive impact on society becomes part of a Benefit Corporation’s legally defined goals.”
Trust benefits society. A principle Volkswagen needs to understand and embrace with renewed vigor.
By becoming a B Corporation, added transparency and accountability is built into the company. Kickstarter is still a for-profit company, just aligning more with the philosophy that businesses play a bigger role in making a positive contribution to our society.
What can be done to take trust to the next level?
Kickstarter is showing the way by raising the bar in how they lead and manage the company. Raising the bar when it comes to core values often gets sidestepped, and Kickstarter is exemplifying what it means to step up instead. More leaders and companies need to take a bold step for trust, a great purpose and added community accountability to keep everyone engaged.
Positive stories like Kickstarter show a way forward for companies to be a positive force in the world. We need to learn and apply what they are experiencing.
The Two Tales of Trust
Volkswagen destroys trust. Kickstarter raises trust. Which company would you rather work for? Which product would you rather use? Trust is not an intangible. Trust is concrete in what it can do and what it can destroy when misused.
From these two tales of trust, lessons include:
- Ensure goals do not override principles.
- Review aggressive goals and think through the behaviors that may result. Build in accountability. Communicate and demonstrate the right message and values.
- Stand-up when deceit is being coded into products and processes.
- Trust is empowering. Distrust destroys.
- Recovering from distrust is a long road back, but it must be engaged boldly, transparently, and quickly.
- When a companies and leaders are doing good works, find ways to raise the bar to avoid complacency and encourage higher aspirations.
- Read the stories of distrust and failure to determine how to avoid in your organizations and leadership practices.
- Read the stories of trust and success to determine how to raise the standards of your organization and leadership practices.
All leaders and organizations need to remember these trust tales and make better choices.