Dan Collins founder of Fresh Group and co-author of Trust Unwrapped, A story of ethics, integrity and chocolate suggests that rather than being a diminishing corporate value ‘Trust’ is in fact the crucial ingredient for surviving the recession.
It’s all very well promising to tell the truth but truth is subjective; my truth might be different from your truth. X Factor Supremo Simon Cowell is well known for telling the truth even when it hurts;
“Harshness to me is giving somebody false hopes and not following through. That’s harsh. Telling some guy or some girl who’ve got zero talent that they have zero talent actually is a kindness”
Most of us would rather withhold some truths than risk upsetting someone, and then of course there are times when it’s commercially beneficial not just to withhold the truth but to present it in a slightly better light than it deserves
Several well known coffee shops display posters and leaflets espousing the benefits of fairly traded coffee, but when you ask the Barista to make you a Fairtrade Latte, he has to sheepishly explain that the Fairtrade blends are only available in the filtered coffee. The espresso mixes would doubtless cost considerably more if they were Fairtrade certified.
And its not just coffee shops who have misled us. Trust in banks has all but vanished; we no longer trust politicians, police officers or school teachers. According to a survey of opinion in 20 countries by Edelman, public trust in business leaders has plunged to new lows. Nearly two-thirds of those surveyed said they trust corporations less today than they did a year ago.
The plunge was most dramatic in America, with only 38% saying they trust business to do what is right (a 20% drop from last year) and just 17% say they trust information from a company’s chief executive.
Does this really matter though, do consumers really want to trust businesses to tell the truth or do they just want their products quickly and cheaply?
The success of brands like Body Shop, innocent and even the Co-operative Bank suggests that an increasing body of shoppers and savers are looking to invest their money into more ethical products.
And these aren’t hippy cottage industries, Body Shop changed hands for £650m in 2006, innocent grew from £500 worth of fruit to a £100m turnover in 8 years and the Co-operative Bank has just absorbed Britannia Building Society, making it one of the largest financial services organisations in the UK and without doubt one of the most secure.
Whilst trust in established brands like Nike, RBS and Nestle stumbles space is created for Howies, Nationwide and Green & Blacks to grow brands that reflect values that match those of their target audience.
Affiliation is a key driver to brand loyalty and whilst having the same vacuum cleaner as Mrs Jones next door was once the incentive most of us would rather have one of James Dyson’s now because he seems like such a nice man, unlike that other lot who ran some dodgy promotion a few years ago involving free flights to America with every Hoover sold.
And if you’re thinking this is just some new fad in response to the appalling behaviour of the banks and the trend towards Corporate Social Responsibility, its not. In 1999 - Warren Buffett - thought to be the world’s richest man - bought the North American furniture retailer Jordan’s from Barry and Eliot Tatleman for a rumoured $250 million in cash – without a contract, on a handshake.
A risky agreement given Buffett likes to keep existing management in place when he acquires a company and especially so with Jordan’s as the Tatleman brothers not only ran the business, they are famed for fronting the company’s TV advertisements, Barry and Eliot are the brand.
When Barry Tatleman was asked by a reporter why the billionaire had taken them at their word he replied ‘it’s a new concept in business, it’s called trust’.
Going back to the Credit Crunch its widely believed that some banks and heavily indebted businesses are now being funded not by city slickers but by Middle Eastern oil wealth, of which there is a great deal, not just because of oil but because Arab businessman do business very differently from the West.
Firstly Islamic law prohibits the lending of money for interest and so their businesses operate without debt! An astounding fact, given the growth, independent of oil that places such as Dubai have achieved in recent years.
Perhaps more challenging for hard nosed Western business people is the fact, that, like Warren Buffett, deals are done on a handshake.
That handshake will not come before there is mutual trust but once established the agreement lasts, not just for the length of the contract, it last for a lifetime.
For your chance to win a copy of Dan's co-authored book, Trust Unwrapped, A story of ethics, integrity and chocolate, email us at email@example.com and tell us why trust is important to your business.
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