Building trust in a climate of distrust
Reputations across the country require rebuilding, and so do does the meaning of trust, writes Six O’Clock Advisory's Ellen Donald.
From crises in sport to banking and aged care royal commissions, it’s been hard to ignore commentary on trust in Australia’s public discourse this year. It’s been all around us, somewhat all-consuming, and it’s not, at all, about to dissipate.
Not surprisingly, the concept of trust, and its fierce influence on reputation, is now being taken more seriously in Australia’s boardrooms, with the Australian Institute of Company Directors revealing that more than 80 percent of directors are in favour of tougher penalties for corporate misconduct.
Photo by Bernard Hermant on Unsplash
As many organisations and leaders turn their attention to how they can restore, rebuild and strengthen trust, they also need to dissect how they can address and repair feelings of distrust, a far more damaging sentiment.
If not before, the adage that actions speak louder than words should be ringing loudly through the corridors and boardrooms of Australian businesses, big and small.
Trust deficit
Earlier this year, while addressing world leaders at the UN General Assembly, secretary-general Antonio Guterres highlighted what he described as a case of “trust deficit disorder” that is afflicting the world.
And, here at home, the inaugural Deloitte Trust Index – Banking 2018 found only one in five Australians believe banks act ethically, and three-quarters believe banks don’t take responsibility for their mistakes, nor keep their promises to customers.
We’ve watched that sentiment closely as it’s played out through the interim findings of the financial services royal commission. It’s fair to presume the reading will be as rough during the upcoming royal commission into aged care as it was for the Modern Slavery Inquiry’s spotlight on unlawful charities and supply chain malpractice.
It’s little wonder that Australians feel distanced and maybe even defeated by the behaviour of our (once) corporate and institutional icons.
Measuring distrust carries more weight
A landmark study by Roy Morgan published recently proposes a somewhat contrary take on measuring trust by looking at which organisations people trust, and the extent to which they trust them. Importantly, the Roy Morgan Net Trust Score (NTS) measures not only trust, but also distrust.
As Roy Morgan CEO Michele Levine points out, this is significant in that if a customer is satisfied with a firm, it doesn’t necessarily follow that they will advocate for it. An unhappy customer, however, can quickly translate into lost business – exacerbated by a growing culture of citizen journalism and easy access to social media channels.
In essence, measuring distrust offers a clearer understanding of why some companies grow, while others stagnate or decline.
Trusted organisations not immune
This year’s Roy Morgan study ranked the ABC among the highest NTS. Whether or not this changes in the wake of the recent leadership turmoil remains to be seen. The widespread public discussion generated by former CEO Michelle Guthrie’s dismissal is a reminder of the need for a risk mitigation strategy – even when trust is high.
Quick fixes may sometimes work, but more important to earning and maintaining trust is a commitment by leaders to fostering mutually-beneficial relationships that put customers ahead of profit.
As EY Fellow for Trust and Ethics Clare Payne puts it: “It would seem that the drive for trust is often just a thin cloak for the continued pursuit of self-interest and, more specifically, the pursuit of profit.”
Consumers demand substance from business leaders
Consumers are savvier than ever, and information – in all its forms – is ubiquitous and instantaneous.
That means organisations – from start-up to established – need to be prepared to be open in the way they engage with their customers and, indeed, all of their stakeholders. It’s about demonstrating through their actions by saying what they will do and doing what they say. In other words, walk the talk.
It’s not necessarily easy, but it’s leadership at its most real.
Former New South Wales Premier, now NAB chief customer officer Mike Baird put it best when he said reputation “arrives like a tortoise and leaves like a hare”.
Understanding what causes trust, and distrust, provides an opportunity for organisations and their leaders to start the journey of rebuilding mutually-beneficially relationships with consumers. And if slow and steady wins the race, then longer-term strategies are the key to yielding sustainable outcomes.
Ellen Donald is a consultant at Six O’Clock Advisory.
Well said Ellen. And the quotes referenced from EY and Mike Baird are, sadly, spot on. A good way to view trust is like a bank account. Strong brands make regular deposits over time. This helps keeps their trust account solid and even means they can afford a withdrawal once in a while and still stay ‘in the black’. On the flip side, poor brands make infrequent deposits, leaving them at risk of going ‘into the red’ the moment they experience a trust withdrawal. Keeping your brand “P&L” healthy is about finding ways to regularly build your trust account.
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