The economy of trust

I have patiently sat through hundreds of PowerPoint vendor briefings (doesn’t anyone know Tufte?), conducted hundreds of vendor reference calls as part of my research activities, talked with tens of hundreds of clients, and found a disturbing pattern, a lack of trust between the market (customers) and those that serve the market (vendors). Interestingly enough it is never mentioned as a corporate strength, core value or mission statement; you would think that creating a high-level of trust would be important. It is also rarely mentioned by customers as one of the strengths of dealing with a vendor.

I believe that trust is an invaluable aspect of all types of relationships and as a manager I believe that maintaining a high-level of trust can make the difference between success and failure, ultimately it is one of the keys to excellence. This can easily be extended to the vendor to customer relationship as well.

I recently read the Speed of Trust by Stephen Covey and I thought I would post some thoughts on the book. He notes that the traditional business formula is: (Strategy x Execution = Results) he proposes that there is a hidden variable (Strategy x Execution) x Trust = Results. He states that a company can have an excellent strategy and a strong ability to execute; but the net result can be torpedoed by a low-trust tax (real, measurable, and extremely high) and multiplied by a high-trust dividend. He claims, and I agree, that this makes a powerful business case for trust, assuring that it is not a soft, “nice to have” quality. So why do so many vendors seem to lack the trust of their customers? How come “trust” is not part of the corporate culture of most companies?

He lays out the 13 behaviors that are essential to relationship trust. How many of these do you, or your organization, posses? Would you say your customers “trust” you as a vendor?

Character-based behaviors
1. Talk straight
2. Demonstrate respect
3. Create transparency
4. Right wrongs
5. Show loyalty
Competence-based behaviors
6. Deliver results
7. Get better, continually improve
8. Confront reality
9. Clarify expectations
10. Practice accountability
Character and Competence behaviors
11. Listen first
12. Keep commitments
13. Extend trust

There is a lot more to the book than the above, but I would imagine that most companies, when they truly look at themselves, could not honestly say they have integrated most of these into their corporate culture or demonstrated these to their clients.

Advertisements

6 thoughts on “The economy of trust

  1. This is already a factor in corporate calculations. A corporation can take a write-down for a loss of “goodwill” which is also called reputation which is largely based on trust.

  2. Isn’t this is a factor used to calculate loss as a result of lost trust, reputation or goodwill. It apparently does nothing to encourage corporations to foster trust, if anything it provides them “insurance” for those times they are dishonest. Instead of asking how can trust increase our value they can ask how much can we misrepresent the truth, deceive or break trust, before it impacts our bottom line. Rothman makes some good points that basically “The IT business has become such a “game” that no one trusts anyone anywhere anymore.

  3. Pingback: Rich Mogull Fully Endorses this Blog… « Observations of a digitally enlightened mind

  4. It seems easy to cultivate trust only in certain “categories.” (Guilty here.) I don’t completely understand why we do this but it can be helpful in a group discussion (as a facilitator for instance) to point out those areas where trust already matters, the behaviors required to build and maintain and then make links. Regardless the type of organization, trust is critical to long-term business success and I agree it’s much more than nice-to-have.

    Best regards,
    Mike

  5. Pingback: The Importance of Trust | Change Management Consulting

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s