Three Inches of Doubt
A skyscraper in lower Manhattan, New York City is reportedly leaning three inches to the north. The 58 story, 670-foot tower, known as One Seaport is only partially built. And in 2019, the tower’s contractor sued the developer alleging they allowed it to be built on a substandard foundation. The developer in turn 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 is compromising 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 have backed out and their deposits have been returned. And a local real estate broker is doubtful the project will have much success luring new buyers given the construction issues.(1)
Building Skyscrapers
I’m always amazed 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. Bedrock is lithified rock, buried beneath layers of soil, formed as part of the structure of the earth.(2) 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.(3) 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
Organizations too 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 resulted in immense financial losses.
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% 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.(4)
Minimizing Doubt
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 keys.
- 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 is critical.
- Protect the environment. Evaluate your processes to remove a negative impact to 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 and 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, suspicions, 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?
(1)https://www.wsj.com/articles/the-ghost-condos-of-nycs-financial-district-11645043359
(3)https://en.wikipedia.org/wiki/Manhattan
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