Latest / Executive Careers with Fexingo: VP, C-Suite, and Senior Leadership Career Strategy / How Senior Leaders Rebuild Trust After a Career Misstep
Transcript
- Lucas: Let's talk about something most senior leaders would rather not discuss: the moment you make a career misstep so public or so costly that your professional credibility takes a real hit. Luna: It's the elephant in every executive networking room. Everyone has either had one or knows someone who has. Lucas: Right. And the conventional wisdom is either 'deny and wait it out' or 'issue a vague apology and move on.' Both are bad. Today I want to look at a specific case — a former Fortune 500 COO I'll call David — who had a regulatory lapse on his watch that cost the company roughly $40 million in fines and a 12 percent stock dip in a single day. Luna: That's the kind of thing that ends careers. How did he handle it? Lucas: He didn't try to outrun the story. Within 72 hours, he held a town hall with his direct reports, acknowledged the failure without blaming the team, and outlined a preliminary remediation plan. That alone set him apart from most executives, who typically go silent for a week while lawyers craft a script. Luna: But wasn't he worried about legal exposure? Usually the counsel says 'don't say anything.' Lucas: He was, and he worked closely with legal — but he understood that internal trust decays faster than legal risk materialises. His calculation was that losing his team's confidence would be more damaging in the long run than a slightly more complicated legal posture. And he was right. Within a month, his direct reports told the board he'd handled it better than they expected. Luna: That's the thing about trust — it's rebuilt through actions, not statements. So what did he do next? Lucas: He commissioned an independent audit of the compliance function — not as a PR move, but with a published implementation timeline. He also asked the board to tie a portion of his compensation to fixing the underlying issues. That's accountability with teeth. Luna: I've seen executives do the opposite — they quietly try to shift blame to a subordinate or a vendor. And that always leaks eventually. Lucas: Exactly. David's approach was the opposite. He actually took a 30 percent pay cut for that year voluntarily, before the board asked. That gesture — he told me later — did more to rebuild trust with the board than any presentation could have. Luna: There's a humbling dimension to it. You have to be willing to show you're not above the consequences. Lucas: And that's hard for senior leaders who've spent decades building a reputation. But the data supports it. I've seen studies showing that leaders who take tangible accountability — pay cuts, public commitments, transparent reporting — recover their credibility within 12 to 18 months. Those who try to minimise or deflect often take three years or never fully recover. Luna: I want to talk about the external piece too — how do you manage your reputation with clients, partners, and the broader industry? David must have faced that. Lucas: He did. And this is where he made a second smart move. He didn't go on a media apology tour — which can come across as self-serving — but he did personally call each of the company's top twenty clients and acknowledge the failure. Not defensive, not scripted. Just honest conversations about what went wrong and how he was fixing it. Luna: That's high-touch. And risky — some of those calls could have gone badly. But if you're the COO, you're the one who needs to own it. Lucas: It's a bet on transparency. And it worked — not a single client left during that period. In fact, a few said they respected the candour. One even extended a contract renewal early. Luna: That's remarkable. It shows that stakeholders often give more leeway than executives assume. The assumption is always that the market has zero tolerance for error, but that's not true if you handle it right. Lucas: Exactly. And this is a good moment to mention something I think is relevant here. You know, we spend a lot of time on this show digging into career strategy — what works, what doesn't — and a lot of listeners have told us these conversations help them navigate tough moments. If you've found value in the show, and you'd like to help us keep it free, ad-free, and independent, you can support us at buy me a coffee dot com slash fexingo. No pressure, just a nod to those who find the episodes useful and want to see more. Luna: Yeah, it's a small way to keep the conversation going. And now back to David's story — after those client calls and the pay cut, what happened with his internal standing? Lucas: Internally, he started holding monthly 'lessons learned' sessions with the broader management team — not just compliance, but operations, sales, everyone. He framed it as 'this is what we learned from a painful experience.' That shifted the narrative from failure to institutional improvement. Luna: That's smart — it turns a personal liability into a collective asset. People start seeing you as someone who can handle crisis, not just someone who caused one. Lucas: Exactly. And that's the core of trust rebuilding: you have to move from being the problem to being part of the solution. David did that methodically over 18 months. One year after the incident, the company's stock had recovered and actually exceeded its pre-incident level. Not solely because of him, but he was a key part of the turnaround. Luna: So what's the one thing you'd tell a senior leader listening right now who's in the middle of a similar crisis? Lucas: Two things, actually. First, act within the first 72 hours. Silence is interpreted as evasion, even if it's just legal caution. You can say 'we are investigating and will share findings by X date' — that's actionable, not evasive. Second, take a tangible personal hit. Whether it's a pay adjustment, a bonus clawback, or a public commitment to a remediation timeline, you need to signal that you bear real cost. Words alone don't rebuild trust. Luna: And if you're not in crisis yet, can you build a reputation for accountability proactively? So that if a misstep happens, you have some capital to draw on? Lucas: Absolutely. The leaders who handle crises best are the ones who, before the crisis, have a track record of admitting smaller mistakes transparently. They've already shown they can be trusted to own an error. That reservoir of goodwill — I've seen it make the difference between a board that fires you and a board that gives you a chance to fix it. Luna: It's like a trust bank account. You have to make deposits before you need to make withdrawals. Lucas: Perfect analogy. And the deposits are small, consistent: admitting when you don't know something, crediting others for success, taking blame for team failures even when it wasn't directly your fault. Those seem like small gestures, but they compound. Luna: So if a listener is starting from scratch — maybe they've just had a misstep and have no prior deposits — what's the first move? Lucas: Start with the most impacted stakeholders. Don't try to address everyone at once. David called his top twenty clients. You might start with your board, your direct reports, or your key external partners. Have the honest conversation, outline your plan, and then follow through. Trust is rebuilt one interaction at a time. Luna: And be patient. 18 months is a long time to stay disciplined. Lucas: It is. But the alternative — trying to shortcut it — almost always backfires. The leaders who rush to 'move on' without truly addressing the damage end up with a lingering credibility gap that hurts them in every future negotiation, every board conversation, every job interview. The investment in rebuilding is worth it.