Why We Don’t Trust Companies Part I
People don’t trust companies very much.
Sure, we trust some companies more than others, and sometimes we trust them more than government (sometimes not), but when you think of someone you trust, a corporation tends not to come first to mind.
There are three simple, powerful, obvious reasons for this – every one of which tends to get ignored by corporations. Who then wonder why they’re not trusted.
Reason 1: Trust is Heavily Personal
Very few companies bother to make a simple distinction – that between trusting and being trusted. It takes both to create trust.
Only people can do trusting. To trust another is an act of will, not of policy or odds-making. Corporations, notwithstanding what Mitt Romney and the US Supreme Court ruled, cannot in any intelligible manner be said to “trust” others. It’s a human thing. So right there, half of trust can only be done by humans.
The other half, trustworthiness, also applies largely to humans. We might say, “I trust the sun will rise tomorrow,” but when it does, you don’t get much credit for your courageous risk-taking. You may trust Amazon to predict your book preferences, but that doesn’t mean you’d trust Amazon to make sales calls for you or set you up on a date.
Trust is hugely contextual, and the few contexts in which we “trust” a company tend to be very bloodless, relying largely on predictability of behavior. And it doesn’t run deep.
Trust is personal, and companies aren’t. Sorry, companies.
Reason 2: Companies Don’t Understand Trust
I noted above that companies rarely distinguish between something as basic as trusting and being trusted. Therefore, if they score low on trust surveys, they can’t tell whether the solution lies in being more trustworthy, or in being more trusting.
By default, most of them implicitly assume the issue is trustworthiness. This means they completely pass up opportunities to create trust by trusting their stakeholder constituencies, or by valuing the propensity to trust within the organization. Worse, they may even harm trustworthiness by assuming that it requires greater internal controls, thus limiting employees’ ability to be trusting.
Trust is contextual, and companies tend to be very vague about it. Sorry, companies.
Reason 3: Companies Choose Trust Tools Badly
Most companies confuse trust with reputation. They view it as a communications problem, something to be handled by PR, especially in times of crisis. Trust problems are addressed by amping up the messaging.
Most companies, if they think about increasing trust, will instantly phrase the issue in terms of measurement. How do you measure it, what metrics can be developed to track it, and how do we manage to the metrics?
Most companies, to go along with their metrics, favor processes and policies as a way of increasing trust. We will review this 4 times, no Xs will go out without Ys, we celebrate Q and we will not tolerate Z.
But trust doesn’t work that way. Since trust is personal, it is transmitted largely through character, role-modeling, values, conversations, personal transparency, integrity, constructive confrontation, public praise and shaming, and mutual respect. How many corporate programs can you identify that use those as tools?
The one communications policy that positively affects trust is transparency; yet it is often sacrificed for message control, which predictably reduces trust. Reputation doesn’t drive trust – trust drives reputation, in any sensible time-frame past a fiscal quarter or two.
The measurement of trust is simply not as important an issue as companies make it out to be. We don’t measure love, and love seems to do fine without it; in fact we would be suspicious of people who purport to be able to measure love, much less do it quarterly, monthly and weekly. You do not need to measure trust in order to manage with it – see the list above of how it works.
Finally, policies and procedures are inherently impersonal. Other than creating greater predictability, is it any wonder they don’t affect trust? In fact, if you get enough policies and procedures, it makes everyone confuse compliance with ethics, and you end up with reduced trust.
There are many reasons we might not trust a company, or companies in general. But the biggest reasons are because we’ve defined the problem wrongly at the very outset.
Charlie- great stuff! The view must be inspiring you 🙂
Thanks Charlie – that answers a question that’s been niggling away in my head for some time.
Do you think we used to be more trusting of companies in days gone by? If so, I wonder why? Did they used to be more personal but moved away from that and lost us in the process?
Sonja- that’s part of it. Other reasons- a less “trusting” world in general, media focus on the negative and crisis of the day, speed at which news travels, inability to hide with increasing social dialogue, siloization within companies, leadership that ignores the impact of building a trustworthy culture on the bottom line, etc. etc.
trust started to be lost when managers started using the phrase, “It’s not personal, it’s business” instead of dealing with the issues they and their companies faced in an honest and open manner
Great points Charlie. Too often we overlook the basics.
The problems in my experience seem to come from a sort of pride in managers having risen above the day to day contact with actual customers. I remember one marketing manager telling me, no he hadn’t actually run his new marketing initiatives past any clients because the days when he had to call on customers was part of his past role and now thank God he no longer had to bother with the whims and unreasonable demands of punters. Since our clients were Senior Managers, Directors and CEOs of the FTSE top 1000, it pretty much told you what our organisation’s approach to being customer orientated was really like. As opposed to wht it said in PR releases.
Large organisations get focused on their own metrics and goals, and tend to manage from the inside out. I was also told the whole organisation was marketing led, not sales led. You’ll notice that marketing led is not at all the same as market led. Lastly, in virtually all major corporates I worked for, every year we gor reassigned to new territories/ new accounts. The reason for that was all about internal promotions, reorganisations, and new market secorisation. The justification was always that, it was important the sales people stayed objectively focused on our goals and targets, and it would be counter productive if the sales people started to identify with the client too well ( this was described as “going native” – where the client starts to feel you are more like one of their own team than an employee of the supplier). It demostrated a fundemental lack of understanding of the role of relationships with the client and the value a close bond delivers to both the supplier and the customer. But coming from managers who believed they have finally risen above the need to actually speak to clients (paradoxically, the source of revenue that paid their salary) – it isn’t surprising that trust is so poorly understood or managed by large organisations. I was often to wonder whether these managers would have been happier born hundreds of years earlier as barons and dukes and the rest of us were mere peasants ruffians. Roll on the French Revolution!
Chris,
Brilliant. I’m going to go back and read that again. You really do a nice job of chronicling just how the rot begins, and how pervasive it gets. After awhile, we can’t see the water in which we are swimming, and we begin to get bamboozled by the sound of our own buzzwords.
Great bunch of insights thanks.
Interesting stuff. You could argue (a la Joel Bakan in The Corporation) that Corporations inherently can’t and shouldn’t be trusted.
Thinking in trust equation terms: the managers in a corporation are legally bound only to act in the best interests of the shareholders. In theory they should only be considering their own interests, their customers interests, or other stakeholders interests to the degree in which serving them also serves the interests of the corporation.
Of course, managers “break the rules” – they’re human. But theoretically, they should only ever be acting in the self-interest of the corporate.
Scary stuff.
Ian,
Right on point. Stay tuned for my next post. By the way, the obligation to serve only shareholders turns out not to be a legal requirement, even though it’s commonly assumed to be. I’ll get the right reference and add to this comment a bit later.
Ah. Bakan argued it had been established by case law I think. We passed a Companies Act here in the UK in 2006 which I think superseded case law and established the responsibilities of Directors – but other than that I don’t know any more!
HBR The Myth of Shareholder Capitalism 2010
http://hbr.org/2010/04/the-myth-of-shareholder-capitalism/ar/
Aha! Very interesting indeed. So we’re all acting on something that’s not really true :~
when did employees stop being stakeholders?
Sonja
I think what has happened with the banking sector in the UK in particular gives us a good window on how trust has definitely reduced over recent years. Firstly, they changed their focus to the very short term, and secondly, they started to see customers as people to be sold to, at whatever cost, so they could hit ever increasing sales targets. In short, they became very self orientated and lost all sight of the customer….the rest, as they say, is history
David- some would argue that the only reason the banking sector (in any country) has lost trust is because investors have lost money. Those who have not lost money do not view the banking sector as untrustworthy.
Thanks David and Barbara – I lost no money but view the banking sector with deep suspicion. Even their attempts at engaging me with seemingly good questions such as “How’s business?” I know to be templated, inauthentic and a lure to get me to take up a loan I don’t need or want. Banking, the press, cheating sportsmen, fake TV game shows – there are no end of examples where profit triumphs over principles. No wonder we don’t trust!
absolute nonsense; people don’t trust bankers because in the last ten years most bankers have done nothing to warrant that trust; local level up to wall street. They are in business simply to make the most money they can, the idea of being a trusted advisor and helpmate went out the window when they the bankers started getting measured by how well their stock was doing. Daily Show did an excellent, and funny piece about the difference between US and Canadian banking systems, and the perceptions of people on the street about each….take one guess who was most hated, US or Canadian banks?