Start Something That Matters

by Blake Mycoskie

  When we arrived at the Airstream convention, it was a remarkable sight to witness all those great people and their wonderful trailers. Of course, most of these intrepid fans were retirees who preferred a nice pair of orthotic shoes over TOMS slip-ons. We had 800 shoes to sell at the convention to a group of people who may have liked the fact that the shoe design echoed the iconic look of an Airstream, or thought the road-map liner was cool, but who didn’t want to, or simply couldn’t, wear them. We sold five pairs.

  When we regrouped in Los Angeles, I came forward and admitted that I’d made a mistake. I’d assumed that what I thought was cool would overpower the demographic dissonance between the average TOMS consumer and the average Airstream enthusiast. It didn’t. We decided to commit to some solid research in the future before we made this kind of design decision again.

  (By the way, under the heading of “There’s a Use for Everything,” the shoes made great gifts to my Airstream-loving friends. And I wore a pair throughout that summer to remind myself to think carefully before jumping.)

  As a leader, when you’re willing to admit your judgment was poor, you show people that you aren’t going to cover your mistakes or place them on someone else. I took 100 percent of the responsibility for my Airstream error. I didn’t say that our salespeople didn’t work hard enough or that the production people didn’t make a good-looking shoe. I didn’t say that the research-and-development people had failed. The error in judgment was all mine. I said I had made a mistake. That gained me trust at TOMS. It also gave the rest of the staff a sense that they, too, could make mistakes—it’s all part of the learning process.

  Since then, whenever someone wants to push an idea through without a lot of solid thinking, we say, “Uh-oh, this could be our next Airstream shoe.”

  Another mistake I made eventually helped TOMS gain trust outside the company. When we started shipping shoes to major accounts such as Nordstrom, Urban Outfitters, and Active Ride, all of our shoes had a little piece of fabric on the sole—we thought it looked nice, and so did our customers. Once, however, we accidentally created a large batch of shoes—6,000 pairs, to be exact—with too much fabric. When you first put them on, the extra fabric wasn’t an issue. But after a few weeks it became well worn, and on a wet day the shoes became far too slippery. People were falling down in the rain.

  Our customers didn’t complain. But because we knew this was an issue and it bothered us, we went to all our retailers and told them outright about the problem—even though they didn’t know about it yet.

  TOMS then offered to take back all of the shoes, which was not only a huge financial issue for us but also alerted all of our accounts to a big slipup on our part—and since we were a small company that many of them already doubted, this was a scary move. But our willingness to tell these accounts about our mistake gained us a great deal of trust in the long run. From then on, these retailers knew that TOMS stood behind everything we made.

  Conversely, just as you should own up to your mistakes, you must allow room for your employees’ lapses as well. They’ll misfile claims, or lose orders, or damage goods, or insult a customer. Mistakes happen.

  But the cost of the employees’ slipups may well be less than the benefit of the personal growth they obtain from them and the value they provide to the organization. If someone in our customer-service department makes a $5,000 mistake, yes, that’s money down the drain. But it could also save us a great deal in the future.

  Why? Well, for one thing, that person will probably never commit that error again. And, best of all, we don’t have to train someone else to do that job—someone who might innocently blunder into that same $5,000 misstep. Now we have someone who is not only experienced but who knows the position’s potential pitfalls and is on guard against further mistakes.

  It’s even possible that some errors are built into the system itself and that someone is bound to make them no matter what. By allowing people to be open about these lapses, you can correct the system.

  If you extend more trust than you might normally be comfortable with—and more than most business books tell you to do—even though those mistakes will come with a price, over the long term you’ll be paid back with interest.

  On the other hand, it’s a different matter if the mistake an employee makes involves breaking trust at the company. Here is one area in which you must be ruthless. You must create a culture in which people know there is zero tolerance for breaking trust. Making mistakes, yes. Breaking trust, no.

  This next story is highly disguised to protect the innocent and the guilty. At one of my companies I had an employee whom I’ll call Jerry, who came to work for us just out of college but took to his job as though he had years of experience behind him. He always arrived at the office early, worked long hours, and was a great deal of fun.

  MISTAKE OF THE MONTH

  There’s a Detroit, Michigan, marketing and advertising agency that has taken the valuable lessons learned from making mistakes to a new level: Brogan & Partners gives out a “Mistake of the Month” award to the employee who has committed (and confessed to) the best error. The agency votes on the errors, and the winner gets a cash prize for honesty (sixty dollars). More important, the errors are then publicized throughout the company so that no one will make the same mistake again. Some of the mistakes include putting on a presentation at a client’s office without checking to see if the document was intact on the computer (it was a mess) and giving odd gifts to corporate clients. One such gift was a set of three leopard-print golf-club covers, which some clients couldn’t identify as such: One person thanked the company for the gift of the mittens but wondered why there were three.

  However, we soon began to realize that Jerry had a fatal flaw—he loved to gossip. Now, everyone in an office gossips to some degree, and sometimes gossip can actually be good if it’s well intentioned or is funny enough to relieve tension. And there’s no way any company can, or should, monitor its employees’ conversations. But what got back to me and others was that Jerry was actively bad-mouthing people in the company, including members of his team. Anyone whom Jerry didn’t like, or anyone with whom he felt competitive, became the object of his funny but mean-spirited gossip. It reached the point where several employees came to me in tears because Jerry had told stories about them that were not only vicious but blatantly untrue.

  I have always had a zero-tolerance policy for bad-mouthing other employees. Nothing destroys trust more. So in this case, although Jerry had made a mistake, it was a mistake we could not allow. We fired him.

  As painful as it was to fire a competent employee, the end result was an organization where trust grew even more. It made other staffers believe that we do what we say we do—refuse to tolerate anyone who disrupts our culture.

  You’ve got to prune your organization of people who violate company trust. This can be difficult, but it must be done. This goes especially for high-performing employees. In the long run, the success of your company is not based on the two highest-performing employees but on the trust you create within your entire organization. Company culture needs to be maintained at all costs.

  Because a major part of leadership takes place outside your organization, you must be sure that you have the trust of your customers, your vendors, and your donors—or whomever you depend upon for your survival. Everything you do in your organization should focus on growing, building, and protecting the trust of these people. If you lose that trust, you lose everything.

  The history of American business is filled with examples of companies that destroyed trust with their consumers, from the late telephone giant WorldCom to the retailer Kmart to the oil company BP, which ran ads touting its environmental bona fides but then ended up flooding the Gulf of Mexico with crude oil.

  Other companies, when under a trust siege, have responded quickly and intelligently. For example, in 1982, seven Chicago-area residents died when they swallowed cyanide-tainted Tylenol tablets. It was not Tylenol’s fault;
the tablets were poisoned after Tylenol shipped them to stores. But the police never caught the culprit and, in the hysteria of the moment, people became terrified of the name Tylenol.

  Rather than surrender the brand—the market leader in pain-relief medicine—owner Johnson & Johnson did everything it could to restore trust in the product. It spent a fortune alerting customers to the danger, it recalled $100 million worth of product containers, it exchanged already-bought bottles for new ones, it worked with law-enforcement officials on the case, it offered a six-figure reward to help catch the guilty party, and it changed the packaging on the bottles: From then on, all products that could be tampered with were double- or triple-sealed. The strategy worked. Tylenol remains a trusted brand.

  Some of the most successful business leaders of the century succeeded precisely because of the trust they created with their customers. Carl Sewell is another of my mentors and is among the most successful entrepreneurs of his era; his book, Customers for Life, is still a bestselling classic. In it, and in his life, Carl preaches that trust is one of the most important parts of a business, rather than, say, making money: “For our way of doing business to work, we have to convince you that there is something more valuable than money.”

  Stores such as Nordstrom are well known for their service, which places customers first. Stories abound at the company of employees who went far out of their way to help customers in ways that no other store would do. As told in The Nordstrom Way, by Robert Spector and Patrick McCarthy, a Nordstrom employee once noticed that a customer had left her airline ticket on the counter while shopping at the store; after calling the airline and discovering they wouldn’t reissue it, the salesperson left her job for an hour and a half and rushed to the airport, where she had the customer paged and gave her back the ticket. This salesperson was able to decide for herself the best course of action and leave her place at the store—and this is because Nordstrom trusts its workers enough to give them the freedom to make entrepreneurial decisions.

  Another way to build trust is to create a powerful promise for the customer. For example, some companies make money by selling the next generation of their product to replace older, broken ones, but certain brands have built their reputation on a lifetime guarantee. Customers trust this guarantee. Two of my favorite companies that do this well are Tumi, the luggage maker, and Orvis, the fly-fishing outfitter.

  One Tumi story I heard involved a customer who called the company about refurbishing his briefcase. The bag had special meaning to him because it was a gift from his father in 1992, and the customer had vowed to use it throughout his entire career; Tumi fixed the old, broken bag with no questions asked. (When the customer sent in the bag, he accidentally left two expensive silver pens in it. When the bag was returned, the pens were still there.)

  At Orvis, if you break a fly rod—even if you slam it in your car door—the company will send you a new one. Orvis once replaced a rod whose owner claimed he had broken it while defending himself from a rattlesnake. Another soon-to-be-divorced man returned home to find that his wife had cut all of his fishing rods in half with a saw; he, too, got new ones. In both cases, Orvis asked no questions.

  I have been a fly-fisherman for a long time and I travel constantly, so both brands are important to me. They both won my loyalty, and that of many others, of course, through these no-questions-asked guarantees. Bottom line: I trust these guarantees, so I invest in these products.

  Being open and forthright is even more important when your business has a philanthropic component—being clear about where your donors’ money will go is the best way to build their trust. A good case in point is the company called charity: water, run by Scott Harrison, who has taught me much about how to run an organization.

  Scott’s story inspires me as well. At the age of thirty-five he has already lived through many intense moments. The first took place when he was four years old: A carbon monoxide leak in his home resulted in his mother becoming an invalid for life, her immune system irreparably destroyed. Scott spent much of his childhood taking care of her.

  In fact, he grew up, he says, “the perfect child.” His conservative Christian parents taught him a rigid set of family values that he followed at home and in church. He lived those principles daily, taking care of his mother, cleaning, cooking, and going to services regularly.

  But at eighteen years old, “I rebelled against everything.” He grew his hair long, joined a rock band, and moved to New York City, hoping to become rich and famous. The rock band broke up four months later, but Scott became involved in the nightclub business and for the next ten years was one of the city’s most successful nightclub promoters and party planners.

  Still, at twenty-eight, Scott felt he was spiraling downward into a life of unbridled decadence. Then one day in 2004, while lying on the perfect beach in Uruguay with the perfect girlfriend, drinking the perfect cocktail, he realized how far he had drifted from the core values his parents had taught him. Deciding to return to theology to explore his faith and his life, he made a promise to God to serve the poor and began looking for volunteer opportunities in Africa.

  Scott applied to several humanitarian organizations; the only one that accepted him was Mercy Ships, a charity offering help to people in need in ports around the world. He went as a photojournalist. Soon he set sail for Liberia, an impoverished country just coming out of civil war.

  Two years later Scott was $40,000 in debt: “But my life had forever changed. I decided to dedicate the rest of my life in service to God and to the poor. Still, the more I discovered, the more I despaired.”

  When Scott learned that 80 percent of all disease on the planet was related to a lack of clean water and basic sanitation, and that 1.1 billion people did not have access to this most basic need, he decided to start a charity himself.

  Most people Scott knew were suspicious of charities. They didn’t trust the lack of transparency—but Scott thought he could fix that with a different model. Be bold, he thought. Be direct, be simple, be open. As clear as the clean water he wanted to make available to those in need. In fact, he named his charity for water.

  He then implemented the “100 percent model.” Every dollar charity: water took in from the public was to go directly to the field, to water projects. It would prove that all its work was real. Charity: water trained its field partners to use GPS devices and cameras so all of their projects could be put up on the Internet, allowing everyone who gave money to see exactly what that money was buying. The idea was to create a brand that everyone could trust—and one that looked good.

  Five years later, charity: water has raised $22 million from more than 100,000 donors around the world. It has given one million people access to clean water in seventeen countries. “We have solved about .01 percent of the global water problem. Our ten-year goal is to help one hundred million people get access to clean water by 2020.

  “It’s all about trust. People know that when they give us money it will be used to do exactly what we say it will be used to do.”

  Charity: water has administrative costs, with twenty-six employees in New York and Scott’s constant travel around the globe. But those costs are raised and allocated differently from the charity itself, so people who contribute to charity: water always know where their money is going.

  I first met Scott in 2007 when we were both in the early stages of getting our organizations going. He spoke with a deep conviction about giving people clean water, and he did it with an entrepreneurial optimism I hadn’t heard before. Scott has greatly inspired me to do whatever it takes to make TOMS a success, and he taught me important lessons about building trust throughout our organizations—and with those who join our cause.

  Our Korean distributor, Deejay Lim, hugging kids in South Africa. Because of Deejay’s incredible work, South Korea is one of TOMS’ biggest international markets.

  One of the ways we have done that is by taking our customers with us on our Shoe Drops, special trips to visit
our giving partners and learn more about their work. When TOMS was younger, we accepted online applications—thousands of people of all ages and backgrounds applied; among those who were chosen to go with us were eighty-year-old grandmothers and eighteen-year-old college students. All in all, we have taken fifty trips, bringing along around 200 people.

  By taking customers and other interested parties with us and encouraging them to post pictures and videos of their experience online, we develop trust beyond that group—it extends to customers who don’t get to go on a drop but stumble on a video or picture online. They see us doing exactly the work TOMS promises to do.

  We’ve also made it clear to our customers from the very beginning that our company is not like most others in the social-impact sector—we are a for-profit company. Our goal is to help people and to make money doing it. We have never hidden that from anyone and in so doing have paved the way for a new type of social venture.

  As should be obvious by now, building trust is not only a business strategy or even just a nice thing to do. It is mission critical. Whether you’re starting a corporation, a social enterprise, a nonprofit, or are working within an existing organization where you have a degree of autonomy, begin your new venture by stating your goals clearly and regularly. The more you articulate where you are going and what you are doing, the more your employees, customers, and funders will feel they can be a part of your goals, ensuring that they will trust the company’s vision.

  Let’s review some tips that will help you win trust with all of these groups.

  To foster trust within your organization:

  For example, compliment publicly and criticize privately, but do both directly. If an employee makes a mistake, say so. Don’t tell other people, or pretend it didn’t happen, or cover up for him or her. People are putting their livelihoods in your hands as a leader. When you offer honest, constructive criticism, they’ll feel more comfortable putting that trust in you.