In 2015, Facebook failed to protect the privacy of 87 million people whose data was obtained without their consent. The company not only bypassed data privacy regulations, but also undermined public trust. Harvard Business School (Harvard Business School) professor Sandra? Sandra Sucher said that “Facebook messed up” by failing to seriously consider the ensuing wave of anger.
In contrast, during the COVID-19 pandemic, Pinterest (photo-sharing website) took the initiative to prevent anti-vaccine activists from spreading misinformation on its website and effectively maintained the trust of users. This is a successful case.
In today’s new environment, companies need to do better at earning trust. The Edelman Trust Barometer (Edelman Trust Barometer) surveyed 34,000 people in 28 countries in 2018 and showed that in the past ten years, trust in companies has remained between 43% and 53%; 2021 Annual data show that trust in companies has risen to 61%, but most respondents believe that CEOs are not credible and do not believe they will do the right thing.
In order to win more trust, business leaders must “sincerely” establish trust with customers, employees and investors, create valuable products and services, act in accordance with good will, treat people fairly, and take responsibility for what they deserve Corporate social responsibility. At a time when the U.S. political landscape is complex and the COVID-19 pandemic has shaken the economy and caused widespread unemployment worldwide, companies may pay more attention to trust than ever before.
Su Che said: “There are more and more problems before companies. People are judging whether they trust a company based on these problems.” “The requirements for a company today are different from those of 10 years ago. Fortunately, the basic principles are still the same. ”
Key elements of trust
A few companies have performed well in building a strong sense of trust. For example, all levels of the Ritz-Carlton Hotel Company can provide customers with a warm, comfortable and personalized experience, whether they are executives, managers, housekeeping staff, waiters, etc., and are famous for this. Patagonia (Patagonia, the best-selling outdoor brand in the United States) has been constantly reviewing its business connotation and corporate social responsibility for a long time, from selling organic cotton and environmentally friendly artificial clothing to investigating the supply chain to avoid exploitation of workers. And to ensure an environmentally friendly stance.
Summary and analysis of these successful cases can be developed. Companies that are good at building trust often focus on the following four key elements:
Capability: Although every company needs to be capable, it simply means having technical know-how and management wisdom, and the ability to create and provide quality products. and service. Competence is the foundation, but “capacity is never enough to ensure trust.”
Motivation: Customers want to understand the company’s endogenous development motivation-why do they do this, besides their own balance sheet, whose interests do they serve? Su Che said: “Many scandals stem from conflicts between goals.”
Method: This not only includes a company’s business methods, but also whether it has adopted a “fair approach” to create fairness for employees and equal communication with the public, etc. .
Impact: The overall effect of the company’s practices and actions. In general, we need to see whether these effects are positive or negative for the economy and society.
If a company ultimately has a bad impact on the economy and society, then, whether it is intentional or unintentional, the public will hope that the company admits its problems and apologizes frankly, preferably both internally and externally. However, the data shows that the number of companies that do not apologize is shocking because they believe that if they apologize, they are “confessing guilt.”
The cost of losing trust
There are too many companies facing trust issues. Take Uber as an example. The company suffered a crisis of trust in 2017, when company executives were accused of sexual harassment and other abuses of employees. In addition, in order to launch ride-sharing services in 2014, Uber tried to poach drivers away from rival Lyft, which was “a complete mistake.” Although Uber later made some kind gestures, such as waiving the fare for passengers who were vaccinated against COVID-19, Su Che said, “The previous misconduct has been very detrimental. To completely regain trust, a lot of work is needed. Work”.
Let’s take a look at Wells Fargo, which is still repairing the damage caused by the 2016 large-scale false account scandal. Volkswagen is also trying to recover its reputation from the 2015 emissions fraud. Boeing, once widely praised It has not recovered from the 737 Max crashes in 2018 and 2019.
These companies must be patient. “The challenge of restoring reputation is that to eliminate a mistake, it takes a long time to be correct. You must stand on the right side of trust again and again to gradually restore trust.” Su Che said.
People often think that trust is an unrealistic concept. It is beautiful, but it is not necessary. It is not the case. The most direct consequence of losing trust is the economy. The “Economist” analysis of 6 companies including Volkswagen and Wells Fargo shows that once a company loses trust, it will lose at least 30% of its value in the short term. On the contrary, every 10% increase in trust will result in a 0.8% increase in value.
How to regain trust?
Although it is still unclear whether some companies can get out of the crisis of trust, researchers believe that trust is likely to rebound. Michelin is an example of regaining trust by constantly doing the right things.
In 1999, when the tire manufacturer announced its layoffs and reorganization, labor protests were triggered due to improper handling, which directly led to the promulgation of federal laws to prevent the recurrence of the “Michelin Incident”. The trust of generations disappeared. Now, after 10 years of hard work, the company has turned losses into profits, regained the market, and promised to work closely with employees at every step of the company’s development.
Michelin now puts forward the concept of “people are our most important asset”, attaches great importance to human management, and is committed to closely linking personnel management with corporate missions and value propositions to give employees a sense of ownership. Through a large number of innovations in personnel management, and a good motivation to promote personal development, constantly refresh their trust.
”Trust can make a company better.” Su Che said, “A company that can take this issue seriously can gain enough trust.”