Trust is a concept we are all familiar with. In business, it has been a topic since the late 1900s. However, the concept really took off a few decades later, when Steven Covey published his bestseller ‘The Speed of Trust’ in 2006.
Nowadays, the ‘trust issue’ has become more relevant than ever. Recently, Fortune coined trust ‘The Most Powerful Currency in Business’, while Forbes dubbed it to be ‘The Most Valuable Business Commodity’. Exactly why has trust become such an issue? Why so many headlines? At the risk of generalizing, I would like to share three trends that stick out and explain our fast growing interest in trust.
There is no doubt that technological innovations are shaping everyday life. In business too we are experiencing change as innovations automate work processes and replace and change work descriptions.
Even though this digital process succeeds in improving products and services supplied to clients, many people struggle with digitization at work.
For some it is simply a lack of technological knowledge. More people struggle because they distrust change and question the advantages of the technological change. They simply do not trust that machines can successfully take over part of the work processes. They do not trust in the security of websites or other applications, which in turn explains the popularity of innovations concerning internet security such as Blockchain. These people do not trust that data are handled with confidentiality. They do not trust inventions that take technology to the next level – such as artificial intelligence. However, in order to embrace the advantages that these innovations are meant to bring, it is vital to learn how to trust machines and their highly advanced skills.
In an increasingly globalized, digitized and highly innovative world, the speed of work processes has not only increased, but is often the driving success factor of companies. Every work process – if not automated – needs to become faster and more efficient. Old hierarchy structures are not efficient anymore, as decisions are not made and changes are not implemented fast enough. Instead, market leading companies such as Google or Spotify show that working agile in project teams does not only increase the speed of processes, but also promotes innovation within the firm.
However, working flexible successfully, requires an important foundation: trust. As an employer / leader, used to the hierarchy structure, you need to stop controlling your employees’ work times and place and instead trust in their competence as well as the intention to deliver the results needed.
As an employee working in a flexible environment, characterized by differing roles according to projects rather than set functions, you need to be able to trust your colleagues to complete their tasks in time, in order to reach joint success in a project. Moreover, you will need to have trust in your own abilities – as greater flexibility often comes with greater responsibility.
A brand’s reputation is one of the most important factors for getting future clients & success. Research has shown that people are more likely to buy brands they consider ‘trustworthy’. Today, with the new generation of Millennials, a brand with a trustworthy reputation does not only deliver products in good and secure quality, but also shows social responsibility.
Internet makes it much easier to find all kinds of background information on companies. The amount of social media users (and internet in general) also means that a trustworthy reputation – however long it took to build – could be destroyed in days. It is therefore extremely important for companies to establish consumer trust – not only with regard to their product/ service (their competence to create something useful for the consumer) but also to their social responsibility, their integrity and intent to do something good in the world.
Although Internet makes it easy to acquire information, people find it more and more difficult to distinguish between ‘fake news’ and real events. Which media can we trust? Most of us have experienced our trust being broken at least once before. The danger is that because of this development we are becoming sceptical.
This is a harmful, because, as shown in Jeffrey Butler, Paola Giuliano & Luigi Guiso’s research The right amount of trust (2009), the cost of too little trust is at least as high as being overly trusting! The researchers in fact found that the cost of trusting too little exceeds the cost of trusting too much, even in sectors and countries that would normally not be considered trustworthy.
Take-home message: we would all be better off if we trusted people, friends and colleagues a little more. Where would you begin?
Lena Arndt is Junior Consultant at Pawlik Consultants Netherlands