Trust: Restoring the Declining Currency of the Marketplace

Issue 3.2 | October 2011

In this Article: restoring confidence in the marketplace by building business that is trustworthy.

by Jonathan Wilson

The alarming possibility of a decade or two of economic stagnancy across the globe is driving many players, in governments and businesses, to flail about this economic quagmire in a panicked search for a way out. Hints are there is a third amount of quantitative easing on its way in the US. In Europe governments and business dither about sovereign defaults and further debt-leveraging initiatives for banks and countries. But while the Euro destabilizes and the US dollar trembles at the brink of possibly its final decline, there is another, very powerful, currency that is equally at stake: trust.

Business builds on trust. When the currency of trust is in decline, it is a sign that the marketplace is indeed in very bad shape. If trust is regained, business can rebuild, and only that will enable the economy to right itself.

The Anatomy of Trust

As between your business and another, or your sales team and a customer, or between partners in an enterprise, so with the marketplace as a whole: trust serves as both glue and grease. It enables a healthy marketplace to thrive with dynamic and meaningful business interactions. Trust is the glue that cements relationships, thereby enabling the kind of stability needed for a healthy marketplace. Equally, to switch to a very contrasting metaphor, trust is the grease that enhances the responsiveness, quality and creativity of business interactions.

Considering trust between individuals will help bring home its nature and its significance. As to its nature, when you trust someone, it is usually for at least one of these three reasons: you believe in their safety, their reliability and (or) their ability. As to its significance, when there is trust between you and an individual, it results in an unblocked back-and-forth flow of high quality information that powerfully aids effective collaboration. When we trust each other, the barriers we normally erect to protect ourselves come down, and the willingness to give to and help each other – and to do so spontaneously and timeously – goes up. Trust serves as a catalyst for tremendous creativity.

How to Undermine Your Own Business

A recent Canadian study in the Journal of Organizational Behavior reveals that while many companies invest heavily in knowledge-sharing software, it does not achieve the desired result of great collaboration and innovation. The general lack of trust in these environments motivates employees to hide their knowledge.

I once worked with a group of executives who came together every few months from across North America for their strategy meetings. Listening to their conversations over meals and during work sessions, I realized that, although they respected each other’s particular competencies and enjoyed each other’s company, they did not trust each other. This was made obvious by their interactions. On several occasions, one or other of them introduced business-critical information to the discussion that was months old. Often it had informed a significant decision by that executive. Judging by the startled responses of the other executives, however, these successive revelations were breaking news! It became clear that each withheld information because he didn’t trust his fellow leaders to act on that information in an appropriate way. You can imagine how severely this hampered the effectiveness of the team to make timely decisions or develop robust solutions that benefited from everyone’s creative input (fortunately they were tired of the distrust and open to taking corrective measures).

Building Business by Building Trust

As protestors occupy the business districts of capitals around the developed world, they convey their cynicism about the marketplace and their anger at having been, as they see it, exploited. While Communism’s failure is still recent enough to give such protestors some pause about what to offer as an alternative, there is a definite (and understandable) bent towards the view that Capitalism is bad.

The trust deficit, however, is a clear indication that it is not that Capitalism is bad per se but that it is broken. Those who influence the direction of the marketplace have shown themselves to be, to one degree or another, unsafe, unreliable and/or incompetent. But rather than gripe and tweet about the failings of big business and government policies, for you and me to act as leaders in this situation we have to take responsibility for the condition of our marketplace and do something about it. Within our own sphere of influence – with our colleagues, employees, customers and other stakeholders – we need to build our businesses on foundations that, over time, will be proven trustworthy.

To be seen as safe, our business has to be done in a manner that is demonstrably service-oriented. When it endeavours to create value, which is ultimately what the marketplace is about, it needs to consider all affected stakeholders. To be seen as reliable, our business has to be reliably good, not just reliably clever. Instead of, for example, trying to game the system with complex financial instruments (in the name of sophistication) that in fact obfuscate the self-serving interests that inform them, what comes out in the wash in the future has to show that our business initiatives were driven by the deepest understandings of what constitutes value. And of course, our business needs to act with a pragmatic competence that addresses the dysfunctions in the marketplace rather than pursue expedience and self-protection at the expense of others.

Economists look for confidence in the markets. To the markets’ detriment, policy makers and business leaders have sought to build confidence artificially. True confidence will come only when business – starting with your company and mine – has proven itself to be safe, reliable and competent.

Another soul insight from www.soulsystems.ca.