Trust is essential to business performance. Accenture research shows that its impact on competitiveness is tangible and measurable. Built through consistent competence, integrity, honesty and transparency, trust shapes relationships with customers, employees, suppliers, media and investors. It must be embedded in an organisation’s DNA, strategy and day-to-day operations.
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For many years, trust has been regarded as a ‘soft’ corporate issue, partly because it has been very difficult to measure. Although leaders intuitively knew that the level of trust within the organisation affected team performance and company value, there was no concrete evidence to support this. However, new research from Accenture has quantified the impact of trust on a company’s competitiveness. And the conclusion is that trust is anything but ‘soft’.
What is trust?
Accenture Strategy defines trust as “a consistent experience of competence, integrity, honesty, transparency, commitment, purpose and familiarity”. Trust acts as a lubricant that facilitates a company’s relationships with its stakeholders and, in doing so, creates shared value for the business. When there is an actual or perceived breach of trust, the impact on the business can be catastrophic.
Technology, social media and the digital economy have given rise to trust incidents that are increasingly visible to the general public. This greater transparency means that trust is a highly volatile and ever-present concern for business leaders. Leaders can no longer assume that major public relations interventions can address breaches of trust. Instead, business leaders need to intentionally create a culture that builds, maintains and preserves trust.
Trust must be embedded in the DNA, strategy and day-to-day operations of every aspect of the business because it affects relationships with all of the business’s stakeholders.
Customers
Increasingly, customers have more choice than ever before and are selecting providers based on alignment of values. Customer satisfaction occurs when a company’s products and services deliver on the brand promise, enhancing the value and trust associated with its reputation. Companies that cannot deliver on their brand promise or transparency will lose customers’ trust and, consequently, business.
A recent Accenture Strategy study of 25,000 global consumers found that, of customers who switched companies in the past year, 46 per cent did so because they lost trust in the company. And switching is not the full cost. Customers are willing to speak out, organise and boycott when their expectations are not met.
Employees
In the war for talent, a company’s reputation and actions are becoming increasingly important to jobseekers. Accenture Strategy research revealed that more than one-third of surveyed workers ranked reputation as one of their top three motivations for working for their current employer.
Trusted suppliers and partners.
Key players in today’s business value chain are trusted suppliers and partners, as they enable faster innovation cycles with greater flexibility. Recent Accenture Strategy research indicates that 84 per cent of supply chain executives say they will increasingly use distributed manufacturing networks (more third parties) to meet customer demands.
Media
The advent of social media has meant that the opinions of the general public are expressed in real time across all forms of media. This can have both positive and negative impacts on building trust, while also providing a forum where negative breaches of trust can be acknowledged and rectified.
Analysts and investors
Increasingly, analysts and investors are interested not only in a company’s financial metrics, but also in its reputation, social impact, sustainability and employee engagement. A joint report developed with the United Nations Global Compact found that 88 per cent of investors view sustainability as a route to competitive advantage.
Since trust affects so many aspects of a company, it is essential that leaders focus on how to build trust and embed it in the organisational culture. They must ensure that all company behaviours and actions align with the company’s stated values in the eyes of key stakeholders. This means ensuring alignment throughout the organisation and that everyone is working in the same direction.
The consequence of leaders failing to focus on developing a trust-based culture within the organisation is that it can significantly and negatively influence profitability and market competitiveness.
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