I've been thinking about reputation, and real honesty, this week.
My thinking is partly because we often avoid big media problems for clients by being more truthful, not hiding sh&t.
And then of course there's the rolling KPMG dumpster fire that engulfed Andrew Yates' career is now threatening that of many other senior folk there who knew, or should have known:
a) The firm used confidential client information to pitch competitors AND
b) A whistleblower reportedly raised concerns in 2024 AND
c) No one else did anything.
That's what turns a mistake into a crisis.
To many leaders fight the wrong battle (or people - their advisers included!) when things go wrong on their watch. There’s a typical pattern where CEOs and boards (and many of us in their orbit) instinctively try to protect, minimise, explain away, or hide things that make us look bad. Often, the real information gets hidden, rationed, or distorted.
Reminds me of little me, and my own kids, making sh$t up when caught red-handed.
The problem for our little people, and KPMG, is stakeholders rarely judge you just on the mistake.
They judge you on what you do next.
When a journalist asks questions, they usually already know something isn't right. So do employees, customers, investors and members. They may not know every fact, but they know organisations are run by humans, and humans make mistakes, or worse, have systemic issues.
Businesses (and families) have cultural problems, operational fails, disagreements and bad decisions. That’s not shocking.
What’s shocking is discovering a company or leader knew something was wrong and chose to hide it, not front up.
Now that’s a trust-killer
People fill gaps with their own explanations, and those are often worse than reality. The harder an organisation works to protect itself, the more people wonder what it's hiding.
The fig leaf becomes the problem when the naked truth wouldn’t have been.
Actually, truth is often less damaging or ugly than the cover-up.
Character is more telling than capability
Most stakeholders are remarkably forgiving when leaders acknowledge a problem, explain its impact and show how they're fixing it. They understand imperfection, even idiotic incompetence.
On the other hand, most of us don't easily forgive deception.
That's because hiding our screw ups reveals something more important than the screw up: poor character. That’s fine if you’re 5, not if you’re 50.
Consumers, employees and investors increasingly look for the gap between the official story and reality. If they find one, that gap becomes the story.
The lesson for leaders is simple. Don't focus all your effort on defending your mistakes. Focus on responding to them honestly.
Mistakes happen. Cover-ups are a choice.
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