Corporations are waking up to the fact that the public does not trust them to act responsibly. Change that, and they will reap the rewards, says Alan MitchellAccording to worldwide research carried out for the World Economic Forum’s recent Davos meeting, there is a “dramatic” lack of trust among ordinary people in both global and large national companies. When asked who they trusted “to operate in the best interests of society”, people who said they had “little or no trust” in big corporations outnumbered those having “a lot or some trust” by ten per cent of the sample. Non-governmental organisations, on the other hand, recorded a positive balance of 27 per cent – and even the media managed two per cent. The figures were quite consistent across 46 countries, so it’s not surprising, perhaps, that the great and good chose “trust and values” as the theme of their annual bash.
Clearly, something important is going on here. But what is it, exactly? Considering the fact that the leaders of the world’s biggest companies have been strutting around for the past ten years clucking “shareholder value, shareholder value, we’ve got to put the shareholder first”, surely it’s hardly surprising that not everyone trusts them to operate in the best interests of society.
On the other hand, when it comes to the slippery concept of trust, there is a lot of contradictory evidence. A few years ago, for instance, the Henley Centre grabbed headlines with research showing that many of the UK’s top brands had higher trust ratings than bedrock institutions such as the judiciary, the media and even the church. The plot thickened when different pieces of research, focusing on individuals rather than organisations, produced very different results. While people don’t trust politicians in the abstract, they are far more likely to trust their own MP. Likewise, people invariably mark down “multinationals” but mark up familiar companies such as Nestlé.
The Future Foundation then tried to elaborate by divining different levels of trust at finer levels of detail: “Do you trust Dixons to treat its employees fairly, be honest in its advertising, to offer good value?” and so forth. The most interesting finding was that individual companies tend either to score well or badly across every dimension. The implication is that the general level of trust in a particular company has a sort of halo effect: once people are disposed to trust an organisation, they tend to trust it along many different dimensions.
Research in other areas raises more interesting questions. A few years ago, Nirmalya Kumar, professor of marketing and retailing at the Institute for Management Development at Lausanne, reported that successful (that is, trusting) manufacturer-retailer relationships displayed four elements: dependability (a belief that a partner is reliable and will keep to his word); distributive justice (a fair share of rewards); procedural justice (perceived fairness in managing the process of the relationship); and what Kumar calls “a leap of faith” – that to some degree or other each side will bear the other’s interests in mind.
Other business-to-business researchers point to a link between trust, expectations, transparency and verifiability. Dan Jones of Cardiff Business School’s Lean Enterprise Research Centre points out that when the Soviet Union and the US were at loggerheads during the cold war, nobody thought the problem could be solved simply by “the generous application of mutual trust – a term which seems to have no operational meaning”. Trust only becomes “operational”, he argues, when both parties have a clearly defined idea of what they expect each other to do, and have clear ways of checking that these expectations are being met.
So how does all this relate to the day-to-day world of brands? Here are some suggestions. The big challenge today is to shift beyond the “I trust it to do what it says on the tin” product trust that formed the foundation of all early brands, to the process-and-motive trust referred to by Kumar. The more companies move beyond pure arms-length money-for-goods transactions with anonymous consumer-buyers, and towards ongoing relationships with named individuals, the more important these other dimensions of “relationship” trust become. These could be phrased in terms such as: “I trust you not to misuse or abuse my personal data”; or “I trust you to treat me with respect and courtesy”.
Likewise, consumers have learned to extend the boundaries of trust beyond product performance promises to factors not included on the label, such as “Will it undermine my children’s health or destroy the environment?”
So nowadays, companies (and governments) have to build trust on many levels – not merely delivery-and-product trust, but process-and-motive trust too. Yet, as Jones points out, trust from low foundations can only be built with clear, highly specific promises backed by up-front honest verification – a process that needs to be iterated many times over, step by step. That is precisely what companies are discovering a need for across a whole range of unfamiliar territories – privacy, ethics, social responsibility.
In its early days, marketing stumbled upon a crucial circular truth that drove great brands forwards. The marketing purpose of trust may be to build transactions, but at the same time, one purpose of every transaction must be to build trust – because otherwise it risks having the opposite effect.
Now companies are discovering that the same logic applies to relationships. This is a shift from “product” honesty and integrity to “people” honesty and integrity which, if successful, creates the benefit-of-the-doubt halo effect discovered by the Future Foundation.
Such trust can only be built step by step, as the early brands were. The marketing purpose of trust may be to build relationships which deliver superior profits, but at the same time, every action and interaction within these relationships has to be judged not only by its immediate results, but also by whether it reinforces or undermines trust. The purpose of trust is to enrich interactions. But a key purpose of every interaction must be to enrich (process and motive) trust.
This is an operational and cultural challenge that few companies have yet come to grips with. Davos was just a very early beginning.
Alan Mitchell, firstname.lastname@example.org