While both businesses and the public agree that it is possible to build trust purposefully yet authentically, some leaders believe that if you focus on doing the right thing and stay true to your mission, then trust will follow.
We argue that you should in fact focus on trust-building first as it is a tangible and measurable asset. Delve a little deeper, and it becomes clear that to purposefully build it, you must have the following building blocks in place:
1. A purpose is not a fluffy textbook term
Successful companies are built not from the ground up, but from the purpose up.
Consider the findings reported in the Journal of Business Research: consumers are more loyal to a business when they aren’t just buying into a logo, but are also “buying into a set of values”.
Brands with this level of self-awareness, will have the culture, internal values and behaviours which inject legitimacy into their trust-building.
2. Everyone has a role to play
Some companies are tempted to toss the “trust-building thing” over to marketing, advertising, or public relations. While those groups are essential to the process, they cannot carry the torch alone. Everyone inside your organisation must be involved, including senior management. All it takes for a “trust leak” to happen is just one gap amongst the many touch points between your business and its many stakeholders.
3. Delivering on your promises
Once you have a purpose, and everyone in your organisation is on board, then commit to providing sincere, total experiences.
For example, the CEOs, survey participants and focus group mentioned the importance of delivering quality products and services. Consistent with PwC’s Trustworthy Organisation Model, the 2014 Authentic Brands Study by brand consultancy Cohn & Wolfe revealed that consumers prioritise “high quality” (66%) and “delivering on promises” (70%).
In short, authenticity isn’t a destination—it’s a journey. And, step by step, your journey must focus on defining and expressing authenticity through stakeholder experiences that are, at once, authentic, intentional, and wholly integrated. Why? Because people don’t want to hear your intentions—who you say you are and what you say you do. They want to experience them.
Clear and present benefit
Transparency is absolutely necessary for any organisation, large or small. Your stakeholders will demand it. But transparency for transparency’s sake alone will not meet the mark, as the world becomes more and more discerning.
To compound matters further, there are many levels to transparency. Are we talking about disclosing financials, business goals, compensation and benefits? Or perhaps it’s being transparent about crises when they hit you and the actions you are taking in response? It could also be about sharing your principal risks, key performance indicators for your top management and other sorts of ‘sensitive’ data. Some companies will feel more comfortable being open about these areas than others.
There’s also the question of whether there can be too much transparency. What works for one company may not work for another.
So how can organisations be transparent in an effective way, to the benefit of both their own business and their stakeholders?
1. Communicate frequently and consistently
In a crisis, for example, your best defence is to not just be upfront about the crisis but to communicate early on and often. That way, you get your side of the story out and don’t allow for speculation or others to define the story for you.
2. Know your stakeholders and prioritise their needs
For instance, in the case of Buffer sharing employee salaries openly and to a lesser extent, the EPF example of open performance rankings. While these work for the organisations in question, it may not necessarily work for others; many of us may want to know how rewards are determined but are we ready to share our own pay package and ratings with the rest of the world?
Similarly, take the situation of an internal crisis involving employees. This will require management to clearly communicate to all staff the issue and developments/steps taken at hand. But do they need to make the situation known to the public? Perhaps not, if it’s not something that really impacts those outside the company.
3. Go back to the basics
This is perhaps the simplest but most important of the steps. If you can, hand-on-heart, answer these two questions in the affirmative, then you will likely be all right: “Can you sleep at night?” and “Will your actions today hold up in the scrutiny of tomorrow?” So, as Dato’ Seri Johan recommends, start preparing for a future in which transparency is taken up a notch, and ensure your actions will still pass muster by those future standards.
Are CEOs the face of trust? The answer is yes. And no.
CEOs do have to go about setting the right tone and they do have to create a strong and consistent culture across the organisation. A CEO who has integrity, who walks the talk, and who does what is right by his people - these are all good traits of a leader, but today these traits are a given. So what do we expect of CEOs who are leading their businesses into a future that’s characterised by constant disruption and change?
Addressing expectations by drawing on your own sense of purpose
As CEOs grapple to address the wider range of stakeholders they have to serve today, they are also preparing their businesses for the more complex customers of tomorrow, PwC’s 19th Annual Global CEO Survey tells us. If they do not do so, they fear losing the trust they have worked so hard for. Today, CEOs tell us that their customers and other stakeholders want them to do more to tackle society’s important problems. And their response has been to focus even more strongly on customer needs; but also to draw on their companies’ own sense of purpose – what they stand for – to define a more comprehensive view of how their businesses operate within society. Some CEOs are taking concrete steps to align this broader mission to their company’s core goal of profitability.
Driving long-term behaviour
But does the burden rest squarely on the CEO’s shoulders? Perhaps more importantly, as Malek Ali points out, if the CEO is primarily rewarded on short-term goals and meeting immediate pressures, we can’t be sure that the CEO is always acting in the best interests of the business. So the market and regulators too have a role to play in the demands they place on business leaders.
As one focus group participant said, “Sometimes shareholders are not long term – [they] look at the ROE for the next quarter, analysts put pressure on a quarter-by-quarter basis… The question is, how strong is the leader under this kind of pressure? Would they have the foresight and have the strength and courage to still want to do the right thing?”
Some examples of legislation which drive more long-term behaviours can be found in the US and the UK. In the US2, the Federal regulator is looking for ways to legislate more long-term behaviour. A recent proposal under the Dodd-Frank Act will allow companies up to seven years to claw back executive bonuses if they have hurt the company. The rules would also allow firms to hold back more than half of executives’ pay for four years. This is part of the government’s efforts to reform Wall Street after the financial crisis.
In the UK rules were passed last year which means senior U.K. bankers will have to wait seven years to collect their annual bonus payments in full. The Financial Conduct Authority Chief Executive Martin Wheatley said: “This is a crucial step to rebuilding public trust in financial services, and allows firms and regulators to build long-term decision making and effective risk management into people’s pay packets.”
So, do big businesses have an advantage over small businesses when it comes to building trust?
Probably not. As the business leaders and focus group participants acknowledge, trust is dependent on many variables, which increase in complexity the larger your business is.
It’s common that as you grow in size, you will inevitably pull away from your roots and reduce the level of personal attention you’re able to deliver, due to the need to employ economies of scale to achieve efficiencies.
A focus on trust to differentiate your business, no matter its size
As we have said in earlier parts of this thought leadership, we believe that you need to ask yourself:
1. whose trust is most important to you and your purpose as a business?
2. how do you tailor your efforts to them?
There is a real opportunity for businesses in Malaysia to differentiate themselves in this exciting emerging market. You will need to pay attention to different stakeholders at different points in time to honour your commitments to them as a business. How much trust you need from them too, will differ in line with your growth needs.
As your business expands, you will find that you may need to collaborate or form alliances with businesses of different sizes to help you continue meeting the individual needs of your customers and other stakeholders. This will again test how well you grow a culture of trust. But regardless of your size, once you have built that reservoir of trust with your stakeholders, you will find that you will be in a much stronger position to make your next move, whether it’s to scale up your operations, diversify into other areas or to start something new.
So can a one-size-fits-all model for building trust work? The answer is no.
Trust is too dynamic to be prescriptive. While we recommend a proactive approach to assessing and nurturing trust, there is no one formula to doing it.
You can’t manage what you don’t measure
But there is a logical pattern of steps you can follow:
1. A good starting point would be to gauge your company’s level of trust with various stakeholders. Whether it’s via our Trustworthy Organisation model or an internal tool, it’s good to get an independent view of how much your stakeholders trust you, in what areas you are falling behind your peers, and what is driving these perceptions.
2. Using these insights, you can then see whether your current state of trust (your trust profile) actually matches your business strategy and goals. You can then determine a trust strategy to help you achieve your business objectives.
3. The insights also help you determine which stakeholders are critical to your business goals and thus focus your trust-building efforts towards them accordingly.
Of course, any model or strategy you employ for trust building needs to be flexible and scalable to address your business’ evolving needs.
But remember that any model for that matter would not be able to help you measure or manage your trust efforts adequately if you are merely looking to comply or to fulfil minimum requirements. It always helps to go back to the drawing board by asking: how does trust put you in business and why do you need to continue trusting in trust to stay in business?