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June 15, 2009 9:00 pm
Is trust a renewable resource? We have to hope that it is. If trust cannot be restored from its current sickly condition then leaders will soon find their task becoming almost impossibly difficult. The old quip about knowing when the boss is lying – his lips move – will be the new conventional wisdom. Managers will take their place alongside politicians, second-hand car salesmen and journalists as yet another undesirable element: social outcasts.
Many are gloomy about the chances of greater levels of trust returning to corporate life. If you are viewing the world from London, which is a global centre of excellence for cynicism, it is hard not to be. But trust is declining just about everywhere. The most recent findings from the Edelman trust barometer, a well-established annual survey, found that 62 per cent of “upper income, highly educated” people in 20 countries had less trust in corporations than they did a year previously. I doubt if averagely educated, average income people would be any more trusting either.
This much you know already. But can anything be done about it? Last week, I went to a seminar in cynical old London in search of help.
The session was hosted by a workplace consultancy called Involve, which was presenting some new data contained in a report that had the encouraging title “Trust: all is not lost”. But after interviewing 180 company directors the consultancy had to report evidence that confirms the pessimists’ prejudices.
Six out of 10 directors felt that their customers had lost confidence in them over the past year. But only four in 10 said they thought their organisation was taking serious steps to try to generate and maintain trust.
Some good practical advice was on offer at the seminar, from David Lowden, until last autumn chief executive of Taylor Nelson Sofres, the market research company that has now been acquired by WPP, and from Olivier Mariée, group marketing and communications director for the French insurer Axa in the UK. Officially the proceedings were off-the-record, but the two speakers were happy for me to summarise their comments.
Mr Lowden explained how his company had become the subject of unwanted attention from WPP last summer, after a proposed merger with the German research business GfK had been abandoned. TNS’s leadership faced a dilemma. They wanted to mount a defence against a hostile takeover bid. They wanted to keep serving their clients properly. But they also wanted to reassure an anxious workforce that was, unsurprisingly, in danger of losing trust in its leaders. Were any of their bosses going to stick around if the going got really tough? Why should anyone stay in those circumstances?
Mr Lowden said a big communication effort was required to try to steady his colleagues’ nerves. Rumours are almost always negative, he pointed out. Only candour can squash them.
Admitting to the organisation that even he, the CEO, had no idea what the future held for him personally, but that he saw no reason to panic, seems to have helped preserve morale, Mr Lowden argued. The company did not disintegrate.
TNS’s board reluctantly recommended accepting WPP’s (twice improved) offer in October. Since then, TNS’s now former CEO pointed out with some pride, its performance has held up well and even outshone that of its new parent within the WPP empire.
Axa’s Mr Mariée explained how his business has been trying to establish trust as a key market differentiator – a big ask at a time when the public has lost faith in financial service providers of all kinds. Axa has invested in an intensive, if fairly conventional, cultural change programme, getting line managers and call centre staff to understand how crucial it is that they deliver on the basic promises they make to customers.
More unusual is a new chatroom on the company’s intranet called “Our space”, where employees are encouraged to put blunt, challenging questions to their senior managers. Answers have to be provided. This has been very effective, Mr Mariée believes, in making the abstract concept of trust more meaningful internally.
Few subjects are causing managers more anxiety right now than the question of trust. Without it, businesses will struggle to recover. But trust is so hard to pin down. It involves an emotional rather than a rational response. It is a judgment rather than something that can easily be measured. Do you trust what those employee surveys on trust are saying?
But can something so intangible really have an impact on the bottom line? Ask the pharmaceuticals company GlaxoSmithKline. Trust features as one of the five key pillars in its code of conduct for doing business.
Just more corporate hot air, you might feel. But at the end of last week, GSK announced plans to cut the prices of many of its leading medicines in emerging markets: a trust-building and, in time, a profit-building exercise.
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