Sometimes we in business think of trust as a soft skill. A nice-to-have at best, a wussy distraction at worst, compared to the ‘hard’ realities of the competitive, market-driven bottom line out there.
Nothing could be further from the truth.
The truth is, trust is the most fundamental form of capital.
There is of course financial capital: the retained earnings on the balance sheet, the asset strength, the bond ratings you earn. But financial capital is just an end result of other forms of capital.
Brand equity, for instance. Or human capital. Or customer loyalty. Or your company’s reputation. Now those, many people would say, are the true sources of capital.
Yet, think again.
· Brand equity minus trust is just name recognition.
· Human capital without trust is mere contract labor.
· Customer loyalty absent trust is no more than convenience.
· Reputation without trust is just notoriety.
Trust isn’t incidental to capitalism, it’s the key ingredient. Capitalism without trust is just a floating flea market at best, a weakly regulated casino at worst.
Soft skills? Wussy? Not if you’re interested in the creation of long-term economic and social well-being.
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