The past few weeks have been very positive. Yes, I genuinely believe they have. The heady combination of the Eurozone Crisis, mis-selling of PPI and other banking products, and now the Libor rate-rigging scandal have made consumers really think about what’s important in business. Trust, ethics and integrity in business have really made the headlines, and that has to be good news. Social Responsibility practitioners and advocates believe that winning businesses compete on values and ethics, not solely on price and profit. We’re now seeing a whole new wave of consumers questioning what is really important and changing their purchasing behaviour accordingly. People are demonstrating quite clearly that they have just ‘had enough’. Many consumers have had their trust destroyed, and they’re taking action.
But unlike price and profit, just how measurable is the value of trustworthiness and integrity. I imagine that amongst other ethical financial institutions, The Co-Operative bank is this week measuring the positive value of its trustworthiness in relation to customer acquisition and retention. It is reported that the bank, which focuses on values, ethics, honesty and integrity, has seen an increase of 25% in new account applications online in the past week. Most businesses would consider that as a successful measurement of trust.
Is trust the same for everybody?
Trust is when we believe that the person or persons (ie. Company or organisation) that is/are trusted will do what is expected or promised. But is trust a one-size-fits-all? The trust that your clients, employees and other stakeholders will place in you as an individual and as a business will depend on many factors including their social background, income, ethical values, religion, past experiences, and more. Further, does your company deserve your clients’ trust? Do you consistently strive to over deliver and exceed clients’ expectations? Do you always demonstrate integrity, trustworthiness, transparency and accountability in your day-to-day operations? These are challenging objectives to fulfil. When there’s an opportunity to generate slightly more profit at the expense of your values do you consider it (even just a little)?
Demonstrating trustworthiness and integrity is vital to the long-term success of your business. In the words of the most successful investor of our time, Warren Buffett says:
“It takes 20 years to build a reputation and 5 minutes to ruin it. If you think about that you’ll do things differently.” Simple.
Social Media and trust
In his excellent book ‘Who cares wins’, David Jones discusses how social media has empowered consumers and in turn this is significantly influencing how companies behave and communicate with their stakeholders. If your business betrays the trust of your clients, it is now very easy for them to use social media to punish you – very publicly. As Jones points out: “ The danger of being one of the companies punished by empowered consumers for failing to do the right thing far outweighs the downsides of changing to be a better business.”
Social media offers businesses an immensely powerful opportunity to communicate with its stakeholders – its clients, employees, communities, suppliers and other business partners. It also gives companies a chance to demonstrate that it is exceeding expectations and creating purpose beyond profit. It’s a trust-building opportunity.
Can we trust in the future?
Will events of the past decade or so result in legislation to ensure greater levels of trust? I think we have already begun to witness tighter regulation, particularly in the financial services sector. Perhaps a better route would be for businesses to ensure that their stakeholders commit to robust ethical codes of conduct. I call this taking Personal Social Responsibility. As individuals, and as part of a business and the wider economy, we must act with the highest levels of personal integrity – always. In the words of Martin Luther King Jr. “The time is always right to do what is right.”
Recent research carried out by Edelman illustrates that trust in CEOs and governments has plummeted. Only 38% of those interviewed in the research believed that information coming from CEOs was credible. That’s down from 50% last year. For a full report on the trust survey please click here
Organisations such as Ethicability are advising large businesses , governments and regulators on how to embed ethics into their organisations. The philosopher Albert Camus said that: “Integrity has no need of rules” – well that may be the case, but I fear that avarice has tempted many of our business leaders to act in ways that fall well-short of ethical. A business will only succeed over the long term when it earns and builds upon the trust of consumers, employees, communities, and other stakeholders.
If you are interested in further research into business ethics and trust, there is a useful reading list here.