With an annual revenue of $9 billion, Arthur Andersen was one among the top five international players in its sector in 2001–2002. It was a top audit and consulting organization with locations in 84 nations and over 85,000 staff members globally. Unfortunately, in 2003 the business failed as a result of a sacrifice in ethics for gain.

Enron's implosion was caused by Arthur Andersen's assistance in manipulating financial statements and endorsing the falsely reported financial statements. Ironically, the company's tagline was "Think Straight, Speak Straight."

In the age of fake news, integrity has become more "make or break" than ever before.

People need to be able to trust your brand and business because if they can’t, they take their business elsewhere.

Source: Le Figaro

Arthur Andersen was far from being the only brand that died because of a loss of trust.

  • Enron (2001)-fraud, creative accounting that wrote off or migrated losses without hurting its bottom line.
  • Theranos (2015) - pretending to have technology that it didn’t have.
  • Johnson & Johnson (2017) - talcum that causes cancer and initially denied the fact.
  • Boeing 737 Max (2019) - A new plane brand that crashed twice due to poor design, defective software, a faulty ease of flying claim, and made worse by management’s denial.

It pays for eternity as long as your brand maintains its integrity.

Apple (2015), around the time of iPhone 5 and iPhone 6, turned down the FBI's request to hack its own phone, regardless of the FBI's pressure. Apple shares were about $120 per share in 2015. Fast forward a few years, as of Jan 2020, it’s about $310 per share. The trust has been kept and their customers come back for newer phones.

Source: Getty Images

Chipotle (2015) quickly admitted that it had failed to provide clean food. The case which caused 700 people gastrointestinal problems in Nov’15.

In the aftermath, the company reported sales at established restaurants grew by 26 percent in January’16, making it on track to grow for the first time in six quarters period.

Source: Fortune

You can fail at anything except integrity. All can be recovered except integrity.

Practices

There are ways for brands to keep their good name:

  • Make integrity a core value. This means that the brand's actions are based on being honest, open, and doing the right thing. This should be shown in the brand's mission statement, values, and code of conduct.
  • Hire the right people: Brands should hire people who share their values and are committed to keeping the brand's integrity. This means looking into the candidates' pasts, checking their references, and judging their character.
  • Be honest: Brands should be open and honest about how they run, what policies they have, and what they do. This means being honest about everything, from how products are made to how the brand handles customer complaints.
  • Take responsibility: When mistakes happen, brands should own up to them and try to make things right. This means taking responsibility, saying sorry, and doing something to stop the same mistake from happening again.
  • Listen to feedback: Brands should actively ask customers, employees, and other stakeholders for feedback and then listen to it. This feedback can help the brand figure out where it needs to improve and make changes to do so.
  • Leaders in the brand should set an example by acting in an ethical way and staying true to the brand's values. This means taking responsibility for their actions and decisions and making sure others do the same.

By doing these things, brands can work to keep their integrity and build trust with their customers and other stakeholders.

Examples

  • In a 2017 ad for Dove, a black woman took off a brown shirt to show a white woman in a beige shirt underneath. People said that the ad was insensitive to people of different races and kept up racist stereotypes. Dove quickly apologized and took the ad down. They also said they would take steps to make sure that their advertising shows diversity and inclusion in the right way. Many people liked how quickly and honestly Dove responded, and they were able to keep their reputation as a brand that cares about promoting positive body image and diversity.
  • The "One for One" program at TOMS Shoes gives a pair of shoes to a child in need for every pair that is sold. This project has helped TOMS Shoes build a reputation for caring about people and doing business in an honest way. TOMS Shoes has also made its "One for One" program bigger by adding eyewear and other products to it. TOMS Shoes has been able to build a successful and profitable business by putting social impact and ethical business practices at the top of its list of priorities.
Source: Brands Vietnam