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The basis of trust in organisations and brands

by Innovationbubble | 17th August 2017 | posted to Insights

 

In the past few years several surveys have shown that roughly two thirds of the public (i.e. potential customers) do not trust businesses; and over two thirds of employees do not trust their bosses. In the past, these finding might have produced a shrug and a “so what!” from certain executives at some organisations. However, there is now generally an increased awareness of the strong relationship that exists between ‘trust’ and several of the key business performance metrics.

The report from the Institute of Business Ethics (Dietz and Gillespie, 2011) demonstrated how ethical business practices and positive judgements of trustworthiness can affect a business. It clearly pointed out how TRUST underpins effective working relationships and in turn has a major influence on organisational and Brand effectiveness.

The findings showed how a high degree of trust will:

  • Lead to positive attitudes and behaviour among staff
  • Improve the functioning of project teams and work groups; increasing overall organisational performance (particularly in the areas of creativity and innovation)
  • Enhance the reputation of the business (Brand)
  • Help to attract and retain top talent
  • Help to attract and retain a loyal customer base

 

There follows the obvious questions such as, “Where does trust come from? How can it be developed? Can it be identified, defined and measured?”

 

Generally speaking, ‘trust’ is something that is ‘felt’, and although we may ‘think’ about whether to trust someone or a brand, the major influence in the decision-making process is always an emotional one.

 

A typical model of trust (see Jones and George) contains these two elements (thinking and feeling) where positive feelings influence the decision space and produce the conditions for a favourable evaluation (and of course vice versa, when negative feelings bias the evaluation unfavorably). The ‘emotional halo’ that colours the decision making is a product of previous experience (with the brand or person) and the immediate influence of mood/emotion. In other words a current negative experience (if not dealt with satisfactorily) can change/undo a positive Brand attitude that has been accumulated over many previous positive interactions.

 

 

 

Building trust between a brand and customers (or employees) is a complicated process. As could be expected when dealing with a concept that is multidimensional, there are many definitions, but a brief overview is presented here, with the hope of giving some insight into the strategies for generating, nurturing and managing trust.

 

The dimensions influencing ‘trust’ are:

  1. Competence/Performance: does the Brand/organisation have the ability to do what it says it will do? How believable are the claims and promises? Will the organisation follow through? How dependable/reliable is the organisation?
  2. Openness/Honesty: How much information is shared and how accurate is it? Are the communications from the business sincere? Is the business willing to admit to mistakes/being in the wrong?
  3. Concern for Others: ‘Others’ include employees and customers. News of poor treatment of employees will quickly damage Brand reputation. Disregard for customers leads to dissatisfaction and a process of stigmatisation by WOM and/or social media.
  4. Identification: The extent to which the business (Brand) values coincide with those held by the employees and customers. This dimension will indicate the degree of engagement of employees and customers with the organisation/brand, and whether it is worthwhile expending energy on maintaining the relationship.
  5. Satisfaction: The extent of previous positive experiences. It is a primary law of human psychology that negative experiences will reduce/curtail the behaviour eliciting that feeling, whereas the opposite is true; a positive experience tends to increase/reinforce the behaviour, (note: essential for repeat business)!
  6. Transforming Relationship: in such a relationship, both parties spontaneously engage in behaviour that benefits the other, even when nothing in return is offered. Such relationships are difficult to generate but they are essential to developing and enhancing trust. Part of this ‘Transforming Contract’ between organisations and their stakeholders is their commitment to responsible behaviour towards society and the environment. (This increasingly involves point 4 above).

There is general consensus that as TRUST increases, risk-taking, collaboration, innovation and creativity, authenticity and strength of relationships increase; the need for control, close supervision and monitoring decreases. This is set out in the table below:

 

Table 1: The Consequences of Trust

Low Trust (COSTS) High Trust (DIVIDENDS)
Bureaucracy Increased Brand Value
Political Culture Increased performance
Employees disengaged More innovation
Staff turnover Improved collaboration
Customer Churn Loyalty from customers
Fraud Better work atmosphere
Sabotage Extra-role performances

 

Enhanced levels of trust will reduce the likelihood of negative consequences for the business e.g. litigation, regulation, strikes, boycotts, negative publicity etc. Whereas breaches of trust are implicitly felt as acts of betrayal; they are associated with incompetence, indifference, lack of care and insincerity.

Organisations wishing to examine the level of trust in their business will need as their starting point some sort of measure. This can then be used to identify the strength and weaknesses in the individual dimensions (identified above) that contribute to ‘trust’. Ideally, such a measure would also access both the thinking and emotional influences on the trust relationship.

Below are a few examples of  items that might be found in a traditional trust-survey that measures conscious levels of trust. Readers wanting to discuss ‘trust’,  its measurement and nonconscious aspects in more detail should contact: nudge@innovationbubble.eu

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Examples of scale items for measuring Trust

  1. This organization can be relied on to keep its promises.
  2. This company often misleads people.
  3. This organisation always ties to take advantage of people.
  4. This brand is known to be successful.
  5. This company listens to what I have to say.
  6. The company believes the opinions of people like me are important.
  7. I could not care less about this brand.

 

  1. I feel a sense of loyalty to this business.
  2. I am happy with this brand.
  3. Most people enjoy dealing with this company.
  4. I don’t consider this to be a particularly helpful organisation.
  5. I think this business succeeds by exploiting others.
  6. I only hear from the organisation when it wants something.
  7. The company avoids accepting any responsibility for errors or faults.
  8. The business is more concerned about making money than anything else.

Author: Nigel Marlow