Honesty Is The Best Policy – Jessica Alba’s Honest Company Case Study
Honesty in business is easy when the seas are calm, and it’s smooth sailing. The true test of a business’ honesty and integrity comes when the storm clouds roll in, and it’s not longer just about your reputation, but actual money is on the line. Famed actress Jessica Alba created a baby product company aimed at being the most transparent company to date in that industry, only providing the highest quality natural products free of chemicals for baby care no matter what the cost. But would The Honest Company (its actual name) live up to its promise when actual money was on the line?
The True Test of a Business’ Honesty and Integrity Comes When The Storm Clouds Roll In
Recently, the company received reports that a shipment of their baby powder might be contaminated with bacteria. The fiscally motivated response would be to wait to see if any babies actually got sick before issuing any sort of expensive recall. This is how Chipotle decided to react to an E. Coli outbreak several years back. They waited to see if the claims were actually true and by then it was too late. Several customers got very sick, and the company’s stock plummeted 25% in just one day. Had the outbreak not been real, though, the company would have saved tremendous amounts of money by putting their customers before their profits
Jessica Alba Promised To Always Put Her customers First
The Honest Company didn’t care, though. Their promise was to their customers that they would always put them first before profits and that’s what they did. They recalled all of the potentially contaminated products with no regard for what it would do to profits. Customers responded. A few did leave the company as customers, but the overwhelming response was that they appreciated the company’s swift action to protect them and became defiantly loyal customers for life. By putting people before profits, The Honest Company solidified its position in the market as a company that could always be trusted.
We Were Put to The Test Too
In our business, we found ourselves in a similar situation recently that tested our commitment to our customers. We were helping our client Murray sell his home when a contract dispute came up between the buyer’s attorney and ours. What we thought would be smooth sailing had turned into a disaster. There was a clause the buyer’s agent had added into the contract that both sides interpreted differently. Our attorney told us we were right and their attorney said they were right and our client was in breach of contract. The bottom line was that Murray would end up having to forfeit $6,000, we would have to go through a several months long court process if we wanted the sale of the home to go through. It would have stalled the sale and prevented our client from selling his house for months!
Commitment Over Money. Always!
When we presented the issue to Murray, his exact words were, “I don’t understand Eric, you are the expert, you are representing us. We trust your advice. What went wrong here”? He was 100% right which is why our immediate response was, “Murray, don’t worry. You are right, and you can trust our advice. We don’t take this responsibility lightly which is why we are reducing our commission by $6,000. This means the buyer will get what he wants and we will close on the sale of your house by late next week. You will receive the exact amount of money we promised you would when listing your house for sale.”
Just Like The Honest Company We Walk the Talk
We still don’t know to this day which side was right or wrong, but that is not important. What was more important to us was putting our reputation and our clients first, before our profits and our bottom line. Just like The Honest Company, we don’t just talk the talk but walk the walk when it comes to our honest commitment to our customers. Today, Murray is one of our best repeat customer because he knows we can be trusted.