Trust Was Not on Volkswagen's Balance Sheet
September 25, 2015
Almost every company professes that trust is its most important asset. Yet most ignore the threats to their trust reputation until there is a crisis. Most do not have a plan for strengthening and protecting its trust reputation on an ongoing basis.
Indeed it is rare to hear a company even mention the term trust in speechs, blogs or annual reports. Building a “Trust Culture” is never on its agenda.
Until companies give high priority to building a culture of trust they risk the consequences and will learn the hard way, as Volkswagen did, trust is its' most important asset.
Although trust was not on Volkswagen’s balance sheet as an asset, here is what happened one week into being caught cheating on American air pollution tests:
- VW shares fell by 1/3 cutting its value by $29 Billion USD
- The company faces fines of up to $18 Billion USD in the United States
- VW will spend $7.3 Billion USD to fix the cars
- Class action suits from angry customers are already being mentioned in the news
- The American Department of Justice has opened a criminal investigation
- Some car dealerships are announcing they will no longer sell VW cars
- The CEO, Martin Winterkorn resigned
Volkswagen is just another example of the multibillion-dollar cost of breaching the public’s trust.
Whether you are an international company or a small local business your trustworthiness is crucial. It can take years to build and can be destroyed within hours - often by a small number of employees, sometimes just one.