A skyscraper in lower Manhattan, New York City reportedly leans three inches to the north. The 58-story, 670-foot tower known as One Seaport is only partially built. In 2019, the tower’s contractor sued the developer, alleging that they stood by while building it on a substandard foundation. In turn, the developer alleged that the lawsuit was a distraction based on the contractor’s inability to complete the structure. You can imagine how the accusations are flowing from there. And the misalignment of the structure compromises the installation of the building’s glass exterior.
At one point, buyers had signed contracts for most of the buildings’ units. Now, almost all of them backed out and received their deposits back. And a local real estate broker doubts that the project will have much success luring in new buyers, given the construction issues.
Building steady skyscrapers
It amazes me when I look across the skyline of major cities and see a dense array of skyscrapers. They’re a feat of engineering where structural steel supports are embedded deep into the bedrock of the ground beneath. The bedrock in Manhattan is well-suited to the many skyscrapers there, and the taller the buildings, the deeper the supports needed to anchor it to the ground. Its sturdiness creates a foundation of trust for the occupants of the buildings, and even though they may sway with the wind, there’s no danger.
Building trust in your business
Here’s the key point: just like skyscrapers, organizations are built on a foundation of trust.
- Investors trust in the business model.
- Clients trust in the quality of the service.
- Customers trust in the quality of the product.
- Employees trust in the viability of the company.
- Stockholders trust that the price will appreciate.
This trust is based on factors such as past business performance, the reputation and credibility of the leaders, current information on the state of the business, the competitive environment and the functional expertise of the team. But if the leadership makes one misstep, overreacts to external forces, cuts corners to “save money” or is fiscally irresponsible, they can lose the trust of investors and customers.
Several recent examples of this illustrate how this leads to immense financial loss.
Peloton stock soared in the initial months of the pandemic, fueled by the closure of gyms and increased interest in home exercise equipment. As time passed, a series of accident-fueled recalls and massive overspending culminated in an 80 percent drop in stock price over the past 12 months. Sales are down, manufacturing is on hold, employees were laid off and the CEO was replaced. This is a loss of trust in the product, business model and leadership.
Electric Last Mile Solutions’ chairman and president/CEO recently left the company after the board concluded they purchased equity in the company without an independent valuation. The stock price has since crashed, and their future is questionable. There was a loss of trust in their leadership and the company’s financial statements.
When starting and leading a business, project or initiative of any size, it’s important for leaders to practice behaviors that avoid creating three inches of doubt. Here are some strategies to employ.
- Provide transparent financial information. Include full disclosure and identification of anticipated risks.
- Pay attention to the details. Invest sufficient time in planning and preparation to ensure accuracy. Due diligence and integrity in every aspect of the building process are critical.
- Protect the environment. Evaluate your processes to remove a negative impact on people and the spaces in which they live and work.
- Prioritize quality. Make certain the materials and parts fully meet the standards for the job.
- Practice safety. Evaluate who might be at physical risk, directly or indirectly, and take steps to mitigate that danger.
- Communicate clearly and often. Stakeholders should unambiguously know the status, milestones and anticipated challenges.
- Create alignment. Know the priorities of the key stakeholders and line up your processes to address them.
- Build relationships. Problems will naturally arise in any major project. Leaders must be able to work through conflict and commit to solutions that honor the project goal.
Surprises in any of these areas contribute to distrust, suspicion or uncertainty. This can stall a project indefinitely and impact business profitability. A small error can have a huge financial impact.
Are you creating three inches of doubt or a foundation of trust?