Losing your reputation

The ultimate risk for a public institution

Totonto street car on dedicated path

A recent strike by Toronto Transit Commission workers presents an interesting case demonstrating how unexpected behaviour can swiftly damage reputation.

From sigh of relief to gasp of disbelief

Last week, city of Toronto residents, collectively, took a huge sigh of relief. The city and union officials, representing the Toronto Transit Commission (TTC) workers, had just negotiated a deal that promised to advert a crippling strike.

Granted, the deal had to be ratified by the union executive and accepted by members. However, given that the deal seemed generous, and that negotiations seemed long and arduous, most residents did not expect a strike. Union spokespersons had also made it clear that any possible strike would be preceded by 48 hours of notice.

So when transit workers walked off the job on Friday evening (April 25th 2008), without notice, creating havoc for thousands of people whose plans depended on the service, the collective sigh of relief became a gasp of disbelief. A diverse mixture of views and emotions about TTC workers, union leadership, and city officials got thrown into a public pot that started to brew early Saturday morning.

Risk in the glare of public opinion

Public transit in Toronto generally has had the support of a wide constituency–thousands of daily riders, businesses, urban planning gurus, environmentalists, and even drivers who appreciate less traffic congestion. However, this support was about to evaporate.
Promptly on Saturday morning, Ontario’s Premier called for a rare Sunday emergency sitting of the provincial legislature. On Sunday, then, the legislature met and ordered transit workers back on the job. It was a rare vote with unanimous support of members and all parties. Surveying the damage From a reputation point of view, TTC workers created huge damage for themselves and the venerable transit institution. Reputation is based on trust or confidence. In this situation, trust encompasses the public’s confidence that management and workers are operating professionally with due regard for public interest and safety.

A rogue strike that clearly put workers’ interests ahead of public interest, even raising questions about the personal safety of stranded passengers who were asked to leave stations on Friday night, undermines this trust. It undermines the claim of being professional. Professionals, after all, receive specialized training to deal with consequential, uncertain situations — to deal with risk. Professionals also ascribe to an ethical code designed to eliminate conflict of interest. The client’s interest comes first; conflict of interest is to be avoided. When it is present, it’s a mark of professionalism to reveal the conflict so that the client can make an informed decision.
What does this mean for the institution?

In recent years, TTC has fought hard and been able to attract capital-investments from all levels of government for upgrades to the system: new buses, new streetcars, more service on surface routes, dedicated streetcar routes and extended subway routes. Supporters of the TTC would like even more investment. However, this damaging strike, predictably, has stalled that agenda. Investors, public or private, mitigate against the risk of making bad investments by entrusting their funds in the hands of managers and institutions in which they have high confidence. It will be harder to invest in the TTC of the future.
Trust and risk are uncomfortable partners

The lesson to be learned is that trust and risk are uncomfortable partners, but they are partners . Risk is uncertainty about a situation. Trust, on the other hand, is certainly about .. something. Risk and trust are partners because we need to be able to trust, at least, some minimal things in order to deal with uncertainty. To live in a state of having no trust and no confidence would be damaging to sanity for an individual and tending to anarchy for a nation.
In relation to public institutions, especially those with regulatory responsibilities, citizens are asked to trust that these institutions will act in expected ways concerning matters of uncertainty (risk) involving public interest or safety — a way that embodies principles of fairness, transparency, logic, ethics, law… and effectiveness. If events undermine one or more of these principles, trust in the institution goes down and its ability to carry on with its mandate is marred. The loss of reputation for any type of organization is a most significant failure, compromising its ability to carry on with its mandate.

The three pillars of reputation

Reputation has three pillars that must be in agreement. These pillars involve seeing, hearing and acting. We form opinions based on what we see and hear about the institution, from any source. Ultimately, actions speak louder than words, and the organization’s actions need to be true in every instance of communication. When actions are not true, trust is diminished and reputation suffers.

TTC workers took action that made it very clear to the public whose interest they were putting first. And the public, via its elected representatives, responded with an order to return to work.

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