05th Oct , 2022
Any good business coach will tell you that trust is the basis on which good corporate businesses and relationships are founded. Trust depends on the reliance on integrity, strength, ability, surety and the confident expectation that things will be done properly. Only by maintaining the highest trust and standards can businesses confidently move in the right direction.
However, trust in businesses has slumped due to a number of factors, including large-scale data breaches becoming commonplace worldwide and the prevalence of “fake news”. This lack of trust is central in many current high profile global issues, including globalisation, climate change and political disruption.
In Australia, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has found misuse of customer trust as a central theme in its finding. Similarly, in New Zealand, questions around consumer trust were also raised in the New Zealand Reserve Bank and in the Financial Markets Authority’s report on the conduct and culture of New Zealand life insurers. This low level of trust begs the questions: Why should we trust? Who can we trust? Can we trust anyone?
Trust forms the basis of all human relationships. There are also business benefits of high-trust relationships, such as higher revenue and lower costs, more profit, and increased commitment by employees to the business. These benefits of trust come from being ethical and acting with integrity. Ultimately, it’s important to do the right thing because it’s the right thing to do.
Since technology increasingly plays a central role in how we deliver services, business leaders now face new challenges in maintaining trust with customers. The increased use of technology itself may not be damaging trust, but the accompanying reduction in face-to-face contact could be contributing. At International Business Mentors, we find that people still value the old-fashioned values of open, honest and ethical behaviour in all business environments.
There are many spin-offs to good corporate behaviour:
Unfortunately, as mentioned above, over the last few years we have seen many high-profile organisations around the world act improperly. This has resulted in a loss of trust that has damaged their reputations and relationships with their customers, suppliers, shareholders, bankers, staff and their broader community stakeholders. The resulting damage from this loss of reputation has been significant, from which some businesses will be lucky to survive even with the best business growth strategies in place.
The aftermath of such scandals evokes continual battles to win back trust, repair the damage and recover the substantial drop in financial performance that typically results. Innocent businesses will often be tainted in an industry when high profile organisations in their sector have been found wanting. Scandal is hard to overcome, and prevention would be better than the cure and also cost less. Good reputation should help optimise the performance of the business.
Protecting business reputations and maintaining a high level of trust is paramount to allow businesses to prosper long term, and a loss of that trust can be catastrophic in the short term.
When faced with critical business pressures, our judgement may become compromised, which is a fact of life for all business owners and people in leadership. To have an impartial and experienced business coach or mentor act as a sounding board can help you maintain critical balance in your business and steer through difficult areas potentially impacting reputation.
There are many ways that a business coach or mentor can help you:
Always be forward thinking when making decisions and consider the risks, benefits and potential hazards of the decisions, including how these are made and the appropriate communication strategy with all stakeholders.
Consider one key corporate objective to become, remain and be seen as a good corporate citizen, with a good and ethical culture. Meeting this objective will take commitment and discipline from you and your whole organisation. The good corporate citizenship will require your strategy and mission, leadership, behaviour, business dealings, interaction with customers, public, government agencies, the environment, policies and practice in business, all to be done with a higher purpose in mind. This should aim to support and foster a safe and sustainable business that contributes positively to society and customers, as well as making great returns to your shareholders and looking after your own people. It’s about defining, imagining and then doing the right thing, which business coaching can assist with.
Corporate legislation around the world tries to encourage high levels of good corporate behaviours in specific areas, such as foreign bribery and anti-corruption laws − laws which continually get updated and overhauled. These types of legislation seek to control such unacceptable behaviours with substantial penalties. Your policies and practice need to be cognisant of these types of laws and ensure that you have policies and procedures in place to comply and not incur the potentially severe financial penalties or imprisonment that may be imposed. And of course, to avoid the severe impact on your business reputation and dilution of trust generally.
Community expectations for good corporate citizenship are increasing. In their daily interactions, consumers that trust your organisation and your brand tend to be loyal but are quick in this age of social media to jump ship if reputational damage becomes apparent and has been spread.
On business reputation and trust as a business owner or leader, you must continue to learn and stay ahead of legal and community expectations. That requires approaches to increase your awareness of the expectation and consider a gap analysis of your actual practice or performance. This is another area in which a business coach or mentor can assist by offering informed and robust debate. Our mentors do not give lip service but will point out aspects that they see as potentially damaging when it comes to policy, trends, decisions or behaviour.
Managing reputational damage is a difficult exercise. Once mistakes have been made and reputation is damaged, action is required. The right communication is critical when you own up, apologise and act to fix the problem to contain the damage. The specific actions will vary according to the size of the business, what went wrong and if there are any legal implications. ‘Sorry’ can be the hardest word, but it can also be the saving grace with reputation. Speaking to major customers and a good selection of other customers to get feedback and communicate the action that will be taken will go a long way to solving the problem and getting customers back on side.
Your business should adopt a strategy of compliance, transparency, honesty and care, always acting in the best interests of your key relationships to reduce the risks of damaging reputation and instead foster trust and relationships. Trust needs clear values, and a purpose beyond just financial targets. To be trusted, you need to commit to and communicate your clear purpose. What people should trust in your business?
Clear purpose and values will help build trust with your own people and help your business to define priorities and fortify your desired culture. Clients of International Business Mentors say that they built trust and culture with their people by being transparent about their strategy and values.
In our age of breath-taking technological change and scepticism, it is the traditional and time-tested values and behaviours that remain the basis to building trust. These values and behaviours include being ethical, honest and acting with integrity, building face-to-face relationships, and communicating openly. These values build trust and generate business benefits, and they’re the basis for interacting positively with customers and employees. Even though technology induces increased changes, it is good to find that one thing has remained constant – old-fashioned values are the basis for future trust.
With the support of a business coach or mentor from International Business Mentors, you can feel confident that you will have done everything possible to avoid the damaging risks associated with loss of trust. Contact us now to develop your own trusted business coaching relationship and start experiencing the benefits.