From WeWork to WeCrashed
In today’s commercial environment, there are many indicators of a successful brand; customer loyalty, brand identity, revenue growth, strong social media following, to name a few. However above all, trust remains the ultimate currency in the relationship between an organization and its stakeholders.
More Than Just Selling Products
In the complexity of today’s society there are now demands on brands to problem solve, not just sell products. Brand democracy has become the new normal, with approximately two- thirds of consumers relying on brands to be a voice of societal change as consumers vote with their wallets. Today’s social justice climate has brought demands for tangible actions, not just communication. When asked what role a brand should play, respondents gave the highest scores to brands as dependable provider (69%), reliable source of information (64%), and being an innovator or protector (63%). Building brand trust is a lengthy process that requires commitment and dedication from the brand. However, regardless of how long it takes to foster trust, that trust can be shattered in a matter of seconds.
From WeWork to WeCrashed: How a Confident Founder Can Con Investors and Crush Trust
Adam Neuman co-founded WeWork, a co-working space, that he marketed as a tech company destined to be the next big thing. With his imposing height, ego, and charisma, Adam convinced eager investors not to miss out on this tremendous opportunity. Thanks to media buzz, start-up employees and freelancers flooded over 50 WeWork locations sites that sprung up around the world. Neuman instilled trust in his stakeholders and his consumers that WeWork was the next Amazon… until it wasn’t.
Trust in this brand crashed when WeWork filed for an IPO in Fall 2019. The documents exposed that the firm had replaced signs of a viable business plan with a new age stream of consciousness. Indeed, WeWork’s valuation was built on the cult of Adam’s personality. Employees who had complained about mistreatment and wrongdoing including low pay, long hours and harassment, suddenly found an empathetic public audience willing to listen and judge WeWork for its bro culture and questionable ethics. Investors, clients, and employees started to flee. The media now brought WeWork skyhigh valuation back to earth. WeWork had failed to show a profit in its ten years of operations and there was no path to profitability either. The result was a failed IPO, Adam Neuman stepping down, and broken trust.
The Recovery Process
The Covid-19 pandemic decimated the office rental market as employees around the globe were forced to work from home further putting the co-working concept at risk. After a major leadership change and corporate structure overhaul during the pandemic along with a public reckoning for Adam, WeWork now looks poised to take advantage of workers eager to return to a social office experience. WeWork continues to regain consumer trust by acknowledging the misconduct of the past, and going public with a much lower valuation and reduced fanfare. WeWork also restructured their membership plans while offering consumers a high degree if flexibility as workers adjust to post pandemic office work. They committed themselves to meeting their customer’s every need and vowed to support their customers in every way. WeWork also introduced additional features such as weekend access for consumers to further prove their customer- centric business model.
Support for Ukraine
In March 2022, new CEO Sandeep Mathrani announced “at WeWork, our core values are meant to drive us not only in our work, but also in the compassion we show others”, advocating their support for Ukraine. In addition to their communication, WeWork took action announcing a partnership with the UN Refugee Agency through which WeWork will be supporting refugee efforts in Eastern Europe. The company is committed to providing workspace for the UN Refugee Agency to operate its business, and offering free space for displaced businesses and non-profit organizations helping with relief efforts.
Bringing Back the Trust
WeWork’s downfall resulted in broken trust and the potential for an impossible recovery. However, when brands deliver on the promise of apology, advocacy and action, they are rewarded with deeper, more resilient relationships with the consumer. As with any relationship in our lives, rebuilding trust begins with admission, the promise to do better, and visible activities.
