An Annual Monitor (Edelman PR’s “Trust Barometer”) conducted each year in the US reports that fewer than half of all Americans (46 percent) “trust” business – an eight point drop from last year.
“In the wake of the financial market meltdown at the end of 2008, we have gone through a series of corporate crises during 2010 – from oil spills to product recalls affecting the leading enterprises in five sectors to the near-bankruptcy of five nations in the EU,” Edelman CEO Richard Edelman wrote. “The result is an even more profound shift in the expectation of companies to operate with increased transparency and in a manner that delivers profit while improving society, captured by my client Indra Nooyi, CEO of Pepsico, in her phrase, “Performance with Purpose.”
The bottom line appears to be no surprise. People want businesses to operate with integrity. They hold ethics in high regard. They respond positively to businesses, of any size, shape or colour, that clearly demonstrate a high level of morality in all that they do.
Edelman’s Barometer reports “Banking and financial services are now the least trusted industries of the 16 we review annually. The reputation of banks continues to plummet, especially in the US, UK and Ireland – down nearly 50 points in the US in the past three years to a new low of 25 percent”.
Therefore, people clearly perceive a lack of morality, ethics and integrity in banking and financial services. No surprises there except, perhaps, the quantum.
Respondents in the survey also gave a strong signal of what their expectations are of business in order to earn their trust. For example, along with credible CEOs, companies that can make the case for their positive, social activities are positioned to win approval, according to the study. In the US, for example, some 85 percent affirmed the statement: “Corporations should create shareholder value in a way that aligns with society’s interests, even if that means sacrificing shareholder value.”
In other words, profit should not be the be all and end all. It is vital, yes, but it should not be earned at the expense of any stakeholder group, be that customers, staff, suppliers or the wider community. In short, this simply reaffirms a principle that is as old as business itself – that a business exists and functions within, not apart from, a community and it should be held to account for its behaviour in, and contribution to, that community.
It is not stretching this philosophy too far to say that, on one level, the terms shareholder (a person or institution with a direct financial interest) and stakeholder (any other individual or group who is affected by the operation and performance of a business) should be regarded as equally important.
So what does “trust” really mean in business and, in particular, in the SME sector?
In my opinion, trust is the result of the behaviours in which a business engages, and virtually every behaviour on the part of every person in a business will either contribute to, or detract from the level of trust enjoyed amongst any or all stakeholders. Indeed, trust is one of the fundamental elements of the concept of “Brand”. A Brand may look exciting, sexy, contemporary, energetic, creative and innovative (characteristics that many marketers seem to think are increasingly important today) but if there are elements of its behaviour that fail to engender or, worse, cause doubt to emerge on, the “trust” dimension, then the Brand is a house of cards.
However, this does not mean that dull, boring, grey, conservative and stodgy are Brand characteristics that will, by contrast, engender trust.
As I have already said, it is the sum total of all the behaviours of a business and its people that will determine the level of trust enjoyed by that business or that brand.
A good start point for an SME to address this issue and ensure that trust (and other values) are key components of all that they think, say and do, is to ask themselves two questions (preferably involving as many stakeholders as possible in the process):
“As a business that is committed to serving the communities in which we operate – What will we always do? What will we never do?”
Under each of those two headings, you should identify the characteristics and behaviours that you believe will best reflect your values, your ethics and your integrity – both as a business and as a group of people operating and working in a business that is committed to being a successful and participatory member of your community (whether that community be the local suburb or the entire country).
For practical reasons, craft the answers as bullet points and limit them to six bullet points under each heading. Then publish them. Put them on the wall where they can be seen by everyone. Add them to your website. Promulgate them on your social media sites. Add them to the back of your invoices. And make darn sure that the behaviours in which your business and its people engage are always utterly consistent with them.
Why? Because trust matters. And trust is profitable. People do business with people they trust and people they like.
But then we’ve always known that. Haven’t we?
Brian Meredith is CEO of The Marketing Bureau (www.themarketingbureau.co.nz). Email [email protected]
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