Trust is dead. Long live trust: do you have what it takes to survive in a "Trust Economy"?

Author:Kempner, Michael W.
Position::CHIEF CONCERN - Survey
 
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In the midst of economic uncertainty and ongoing threats to our financial system, every company's executives and stakeholders must contend with an unfortunate side effect of the meltdown: Trust is dead. This is evident from Wall Street to Main Street. We see it in the performance of the stock market, the decline of consumer confidence and in the fear and uncertainty that affects employee performance and decisions. Trust is the currency between any company and its various stakeholders, and arguably the most critical bond. Without it, no business relationship can endure, let alone succeed. Clearly, the actions of a few major institutions have shaken the confidence of business leaders, investors, customers and influencers to the very core.

Stories abound of ethical breaches and financial malfeasance. Take the supermarket CEO who used an online pseudonym to bash a competitor his company later acquired. It backfired when the Federal Trade Commission filed an antitrust suit to block the takeover. Or the financial executive who declared his company healthy and above reproach, and announced its demise the next day. It is no surprise that trust is dead, yet businesses can't operate in today's "Trust Economy" without it.

The MWW Group and Chief Executive magazine recently surveyed CEOs on the pivotal questions of trust, reputation, integrity and performance. The results were striking--and quite surprising. On matters of trust, three in four executives acknowledged that financial mismanagement contributes greatly to the loss of investor confidence. But fewer than half (47 percent) say CEO behavior is the most important reason stakeholders lose trust in a company, and 73 percent rank a CEO who maintains a low profile just behind a leader with a track record of business success in terms of C-suite desirability. In this atmosphere of public skepticism, CEOs must genuinely believe their business behavior matters and now, more than ever, be out front, championing the company, its brand and its values.

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How can trust and corporate reputation be restored at a time of such market tumult and dissatisfaction? First, through deliverables--the quality and integrity of products or services, company vision and innovation, and financial performance. Second, through corporate social responsibility citizenship and philanthropy, Third, and perhaps most importantly, by focusing on the intangibles: integrity, leadership, transparency, credibility...

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