In recent months, entrepreneur Elizabeth Holmes, CEO of blood-testing company Theranos, has gone from business celebrity success story to quintessential pariah. The sad transformation began with an investigative piece published in the Wall Street Journal by John Carreyrou, a two-time Pulitzer Prize winner. And, continues with a headline published in the New York Times, “Theranos Under Pressure as Inquiries Mount,” followed by a Wired.com story, “Theranos’ Lab Problems Go Way Deeper than Its Secret Tech,” and, Scientific American’s chronicling, “The Rise and Fall of Theranos.” These are accompanied by news the United States Securities and Exchange Commission and Justice Department are opening investigations. Clearly, there’s more than a little trouble plaguing this once highly-touted innovative company. But, it still provides us with a lot of useful insight and the saga tells us so much about the importance of trust.
Elizabeth Holmes, Theranos and Trust
Where the lesson begins in earnest is at the inception of the blood-testing company. Though innovative, there were many questions early on about how the product works. Being the blood-testing product proficiently tapped into a big consumer pain point, such questions were inevitable. The new technology appeared to meet all criteria for becoming a huge success. Investment capital flowed from many sources and new strategic relationships were announced and enacted.
Not long ago, most discussions of leadership were about leaders – their personality traits, how to identify and groom those with ‘leadership potential,’ and what were the skills that leaders employed. Leadership theorists nowadays stress authenticity, EQ and relationships. This makes intuitive sense. But it isn’t just a fad; there is a solid reason behind the shift. It is driven by changes in the world. Above all, it reflects the growing importance of trust. —Forbes.com
Elizabeth Holmes and Theranos stood on the brink of greatness, with its product appearing to follow essential new product rules. Now, media attention has gone from accolades to accusations, from appreciation to adverse and it’s all over the age-old issue of trust. It is trust consumers place in every transaction and the very relational phenomenon businesses expand upon, to the benefit of all parties involved. There is simply no substitute for trust and businesses should know how to build and maintain it:
- Deliver on promises. When you make a promise, you are giving more than just your personal word. You are also committing your entire team to the declaration. If you do not deliver on just one promise, it could put your whole reputation in jeopardy. In addition, it’s equally important to never overpromise because you’ll overextend and will be too tempted to cut corners to deliver on-time.
- Build a solid reputation. Encourage customers to write and share reviews. A study conducted by Dimensional Research reveals 90 percent of consumers stated positive reviews were a large factor in their purchasing decision. Moreover, negative reviews had a negative impact on 86 percent of the survey’s participants. This tells us just how powerful public customer trust truly is.
- Communicate regularly and openly. Everyone has a busy life, trying to balance professional and personal schedules. But, it’s here there is a golden opportunity. Owners who communicate regularly and openly with their customers will stand out from the competition in a big way.
- Always show heartfelt appreciation. Small tokens of appreciation, like a loyalty discount, an inexpensive gift, and other methods of showing your heartfelt appreciation is not only a way to establish trust, it’s a great way to create brand ambassadors.
- Be willing to demonstrate your integrity. There will be situations which test your ability to tap into genuine integrity. Trying to avoid these will certainly undermine your customers’ collective trust and damage your reputation.
Have you encountered a professional situation where trust was at issue? If so, how did you handle it? What other suggestions do you have to add to the conversation?