Trust is the willingness of one party to rely on another partner to deliver what is expected. Trustworthiness relies on employees as well as management policies and practices designed with the customer’s best interests at heart.
A few years ago, the global financial services group, Deloitte, referred to trust as currency. Deloitte stated that trust is an exchange of value. Deloitte defined trust as “… our willingness to be vulnerable to the actions of others because we believe they have good intentions and will behave well towards us.”
Whichever way you define trust, to succeed – to win, organisations must build trust and generate Trust Capital. “Capital” means “… money and/or other assets and resources that contribute to the health and enduring profitable growth of the enterprise.”
In general, most brand-businesses focus on three forms of organisational wealth: Financial Capital, Intellectual Capital and Human Capital. But, Trust Capital is a critical fourth component.
Financial Capital is the money used by a brand-business to buy what it needs to make its products. Financial Capital is the money allocated to provide services to the sector of the economy in which its operation is based.
Intellectual Capital is the combination of three things. 1) Intellectual Capital is the organization’s intellectual property including trademarks, patents, licenses and brands. 2) Intellectual Capital is the brand-business’ unique processes, databases and infrastructures. 3) Intellectual Capital is the brand-business’ special customer, franchisee/owner-operator and supplier relationships for building and maximizing the organization’s wealth.
Human Capital is the collective skills, knowledge or other intangible people-assets of the brand-business’ individuals.
Human Capital is the “people talent” of the brand-business helping to create economic wealth.
Trust Capital is stakeholder confidence in the leadership, credibility, integrity and responsibility of a brand-business to deliver its promises of value to its stakeholders. Trust Capital is a value-creating asset. Trust Capital is an intangible asset that increases the power of marketing expenditures and reduces the cost of new brand introductions.
Trust Capital is what the organisation draws on during troubling events, mishaps or crises. Trust Capital is a most valuable asset in those occasions when a brand needs to defend itself during unexpected, unfortunate situations. Generating and accumulating Trust Capital in a trust reserve – a Trust Bank – provides a trust buttress helping to weather crises of character.
Although an intangible asset, Trust Capital is an asset that strengthens brands, bringing stability, organisational confidence and the generation of future potential earnings. We have seen brands demonstrate how easy it is for trust to become mistrust in a matter of moments. Whether there has been a disaster or a crisis of mismanagement, having a full Trust Bank reserve of Trust Capital stabilises the situation, helping organisations return to their trusted relationships with stakeholders.
When it comes to trust and building Trust Capital, here are four actions to take;
1. Create a Trust Agenda.
It is critical to produce the right results by doing the right things in the right way. This principle applies to every stakeholder relationship. In order to grow trust and generate Trust Capital, the CEO must have a corporate strategic platform based on a
Trust Agenda. This Trust Agenda addresses issues such as:
• How will we build trust across our geographies, our brands, our people, our shareholders, our franchisees, our partners, our suppliers and our local communities?
• How will we build trust chains throughout all of our relationships, internal and external?
• How will we ensure that we include corporate responsibility is integrated into all of our decision-making?
• Are we a good global and local corporate citizen?
Having a Trust Agenda allows an organisation to be a steady force for good while not standing still.
2. The CEO must be the CTO (Chief Trust Officer)
The CEO cannot delegate the leadership necessary for building trust and generating corporate Trust Capital. Trust Capital-building is, primarily, a CEO responsibility. The CEO is the Chief Trust Officer. Chief Trust Officer is a fundamental, ongoing, leadership responsibility. Trust building begins at the top. The CTO role must not be delegated.
The role of Chief Trust Officer is more than a title. CTO is an indispensable, trust-growing and Trust Capital-building task of major cultural and financial significance inside and outside the organisation.
3. Do what you say you will do.
Do what you say you will do is the foundation upon which trust is built. It is a cliché to say that actions speak louder than words. It is a cliché because it is so true. Nothing kills trust more than promising and not delivering.
4. Build Leadership, Credibility, Integrity and Responsibility.
• Leadership must be demonstrated, not merely claimed. The brand-business must be a thought leader. Is your brand-business perceived to be innovative? And, are you growing in size?
• Credibility means your statements and actions are plausible. Be dependable. Be capable, competent and an expert in your field. Provide superior complaint resolution. Be a trustworthy source of information.
• Integrity means having customers’ interests at heart. Be accountable for actions. Behave ethically.
• Responsibility provides competitive advantage. Demonstrate good corporate citizenship. Corporate Social Responsibility is not a separate division within the organisation. It is a way of doing business.
Last line
Building trust must be a brand-business priority. Accruing Trust Capital is essential for high quality revenue growth for profitability and success. Without trust there is no brand value. Without brand value there is no shareholder value. Trust Capital leads to high quality revenue growth. Businesses want brand-businesses that businesses can trust. Trust is must.
