The consequences of promises

Consequences always follow promises, and the nature of the outcome is determined by whether you keep or break them.

At first glance, broken promises appear to exert a more significant impact. And indeed, the hurt caused deserves attention. Less examined are the gains from keeping them.

It’s easy to overlook the rippling benefits of kept commitments when high profile breaches of promise dominate news headlines — Volkswagen lying about emissions, Rio Tinto literally blowing theirs up, and recently companies pocketing ill-gotten Job Keeper payouts.

Breaking a promise can undoubtedly lead to tangible consequences …

To date, Volkswagen’s craven behaviour has cost them 35 billion dollars in lost value and fines and a footnote to their reputation they will never shake.

Rio Tinto appears to have escaped more lightly with some changes to the leadership lineup. However, suppose more come to light, such as recent revelations about indigenous artefacts dumped in 1992. At some point stakeholders may weigh the relationship costs, making it more difficult for Rio Tinto to do their work.

The interplay between promises and consequences is always easier to see on an individual level.

If I break my promise, you may avoid me in the future. Or, if our relationship has enough goodwill in the bank, you might give me another chance.

Promises are their own form of capital. When kept, they expand beyond the specific agreement, becoming social capital that I can use to do more work.

For example, x person or company promises to do y. When they follow through and keep it, z person or company on the other side of the agreement gets y and increases their confidence in x So, next time z needs y, they go to x, tell a friend who also buys y, lowering the cost of sales for x.

The cumulative effect means x can now use the gains from keeping their promise for other things, perhaps improving their products or hiring more people.

Now reverse the story. X person or company promises to do y. When they don’t, z person or company on the other side is deprived of y
and has less confidence in x. So, next time z needs y, they look around, also telling friends not to go to x to buy y.

The effect is now reversed, depriving x of sales and the valuable social capital grown by strong relationships. So now, x must spend more to replace z and their friends with people who don’t know about the broken promise.

The consequences of a promise may cost a customer, or turbocharge confidence, ding up a reputation, or make it shine. But the impact rarely stops with those outcomes which only multiply over time.

When I see organisations struggling with churning customers or going gangbusters, my first questions are always what promises are they making and how are they keeping them (or not).

Considering the consequences of promises benefits people and companies in numerous ways. Perhaps most usefully by helping them see the longer-term gains or costs.

After all, a brand is the ongoing result of all promises kept and broken.

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Michel Hogan is a brand counsel, writer and speaker. She advises organisations on the risk to their purpose and values or making the wrong promises — with a bountiful brand as the result.

Contact Michel at michelhogan.com, buy her latest book –The Unheroic Work, and follow her on Twitter and Linkedin.