A Letter from Chris Suarez
OWN IT AND APOLOGIZE
Earlier this week thousands of future Rivian truck and SUV owners received an email from the founder and CEO of the company. It notified everyone that the cost of the vehicle that they had pre-ordered had been increased. It simply attributed it to inflationary pressure on suppliers of materials across the world. I didn’t think too much about it. I was committed to the purchase, understood their costs had gone up, and had also already invested in the company considerably through stock. I would be lying however if I said I didn’t think it odd that a company would arbitrarily change an agreed upon price. With any contract, there is trust implied. I wondered how many people would cancel their pre-order and how it might affect stock price.
Just two days later, thousands of future Rivian owners received a second email. The email was pretty direct. It reversed the price hike for anyone that had a previous commitment to purchase. It included phrases such as:
“We failed to appreciate…”
“…the logic…was wrong and we broke your trust…”
“We also didn’t manage communications well.”
“The most important aspect of what we are building is our relationship with all of you. As we demonstrated earlier this week, trust is hard to build and easy to break.”
“I have made a lot of mistakes…but this one has been the most painful.”
“I am truly sorry and committed to rebuilding your trust.”
“We made a mistake … and what is important now is that we fix it.”
This founder and CEO owned it and apologized. His language displayed self-awareness, apologetic remorse, and immediate acknowledgment of the mistake.
We all like to look good and be right. Perhaps we usually do and are. But looking good and being right will usually get in the way of doing the right thing. In this case RJ Scaringe - CEO of Rivian - was able to step up within 48 hours and publicly apologize. He shared openly what he didn’t do well.
Most importantly he recognized by making this mistake he had lost the trust and potentially the relationship he had built with the thousands of buyers and future Rivian owners as well as investors. A break in trust is hard to rebuild and at times hard to quantify. In this case we know what it initially cost. Within the firs t48 hours, the stock price had dropped over 25% in value.
Upon receiving that apology, I immediately doubled down and invested further in the company. Was that opportunistic? Was it a buy low strategy? Was it a “be greedy when others are fearful” commitment as we’ve learned from Buffet?
Not really. It was the fact that I believe in leadership that is willing to say “We failed.” I believe in leadership that is willing to say “ I made a mistake.” I believe in leadership that is willing to say “I am truly sorry.”
Looking around corporate America as well as the world in general, those leaders are hard to find. I am a believer in the fact that over the long term, great leaders will always win. Honest and humble leaders will always build trust.
Does Rivian have work to do to build back brand loyalty - after losing some even before it had built it up? Sure it does. But owning it and apologizing is the right path forward and a step towards brand value. I am not brand loyal. I am leadership loyal. Taking ownership of mistakes is a way to earn my trust in you as a leader.
This message transcends business of course. In all great relationships we will make mistakes. We make mistakes with business partners, customers, employees, spouses, children. Being willing to look someone in the eye and say “I was wrong and I broke your trust” is the key to a long term relationship. The next step is equally important. As RJ Scaringe shared, “trust is hard to build and easy to break.” But anything worth building will be hard. So stepping up, owning mistakes, apologizing for them, committing to doing the right thing, and then setting out to do that hard work of rebuilding is a sign of a great leader.
Am I convinced the stock will rebound and get back to its 52 week high - now being some 73% below when it peaked? Well, I don’t give stock recommendations. I do however happily give leadership recommendations. My investment in Rivian is more a personal commitment to support good leaders and a vote of confidence in any company that is committed to doing the right thing.
I’ve always believed in a leader that owns it and apologizes.
Chris
