Hi, I'm Severin de Wit, host of the TrustTalk podcast, where we dive deep into the fascinating world of trust. With a genuine passion for understanding the foundations and nuances of trust, I am dedicated to uncovering its secrets and sharing compelling stories that illuminate its profound impact. Join me on this captivating journey as we explore the transformative power of trust. Subscribe now and become part of the TrustTalk community
Hi, I'm Severin de Wit, host of the TrustTalk podcast, where we dive deep into the fascinating world of trust. With a genuine passion for understanding the foundations and nuances of trust, I am dedicated to uncovering its secrets and sharing compelling stories that illuminate its profound impact. Join me on this captivating journey as we explore the transformative power of trust. Subscribe now and become part of the TrustTalk community
Despite decades of research into trust measuring individual trust remains unsatisfying due to problematic survey questions that are used to measure social trust. There are two main methods used to measure trust, surveys and behavior observation. Surveys ask for people’s judgments about trust, while behavior observation looks at behaviors based on trust. The trust game is an example of the latter, where trust is measured by the amount of money sent from the trustor to the trustee and how both parties behave.
Trust reports by major consultancies and non-alignment
He suggests that non-alignment between the many surveys by organizations like Edelman, Pew Research Center, and major consultancies like Deloitte, PwC, EY and KPMG may be due to different survey questions, different time points for data collection, and different samples. The OECD Guidelines on measuring trust are helpful but could be updated with more recent knowledge. He believes that even though trust is emotional and subjective, it should still be quantified, and mentions his research on audio responses to measure trust. He also points out that definitions of trust are often detached from measurements of trust and discusses his work on finding a better fit between the definition and measurement of trust.
(…) we simply learned over time that the questions we use are to some extent problematic. So, for instance, the most popular survey question that we use to measure social trust goes along the lines: “Do you think that most people can be trusted or that you can’t be careful enough in dealing with people?” And this question contains concepts such as most people, And by now we know that people might interpret this question differently. This is a measurement problem, and we find such measurement problems across different trust survey questions.
Behavioral Trust
(…) So, for instance, I could do an interview with you because I trust you, and in sociology and political science, the most common method to measure trust is to ask people for their judgments in surveys. So we could ask them: “Do you trust your family? Do you trust your neighbours?” and the infamous generalized social trust question that I just mentioned is, for instance, “do you think that most people can be trusted or that you can’t be too careful in dealing with people?”. That’s one way, basically directly asking for these judgments. And besides that, we can also observe the behaviour and then conclude that certain behaviours we observe should be based on a high level of trust. So, for instance, I could observe a friend lending money to another person, and then I would assume that she trusts this other person because I’ve observed this behaviour and there’s actually a large literature that attempts to measure what trust researchers call “behaviourally exhibited trust”, in other words, behaviour that is based on trust.
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Trust isn’t only critical to developing personal relationships—it’s also the heart of successful organizational strategies. To thrive in the new age of trust, companies should work to build trust equity every day. Doing so, however, will require making trust measurable. In the 52nd episode of the TrustTalk podcast the host, Severin de Wit, talks with Deloitte‘s Natasha Buckley and Michael Bondar on how trust performance is researched and measured.
Trust drives enterprise performance and mitigates risk. Trust elevates customer and brand loyalty, which can increase revenue. It enhances levels of workforce engagement, which can result in increased productivity and workforce retention. They talk about the old adage that you can only manage what you can measure and how Deloitte measures trust to help clients make strategic decisions. Natasha and Michael also talk about how specific operating areas like superior customer service, delivering innovative solutions or protecting customer data significantly elevates trust in a brand, leading to higher performance.
We talk about digital engagement and digital transformation and why they are key drivers of trust, about AI and how it can help to validate information accuracy, how trust across different stakeholder groups can be maintained and the trust challenges that lay ahead.
Trust and organizational success
Michael Bondar about what trust means to organizational success:
Over the last three years, we have seen a tremendous amount of not just interest from media, organisations, leaders across industries and sectors and all over the globe, but real traction in terms of what trust means to organisational success, from financial performance to building brand loyalty and customer loyalty to workforce engagement and brand protection. Those are just some of the key elements of impact that we see trust having. And so for me, this has become my life and the team and I spend our days every waking hour thinking about how we can help organisations become more trusted.
we observed the importance of different organisational traits and their impact on resilience and the ability of the company or organisation to weather the crisis. These traits included organisational preparedness, adaptability, collaboration, accountability and trustworthiness. Organisations that demonstrated the traits were weathering the pandemic more effectively than those who didn’t. So for example, with respect to trust, CXOs recognized the challenge of building trust, but not all recognized that trust is actionable. So for example, more than a third of the responding CXOs were not confident their companies had succeeded in developing trust between leaders and employees. Those who were more confident, focused on implementing measures to improve communication and transparency with their employees and other key stakeholders
About Brand Protection and Trust
We see brand protection organizations that are impacted by negative trust events fall anywhere from 26 to 74% behind their industry peers in value. And their market cap can fall by 20% to 56%. Workforce engagement: we see nearly 80% 79% of employees who highly trust their employer feel motivated to work. And then customer loyalty. A critical measure of success, out of customers who highly trusted brand, 88% bought again from that brand and 62% buy almost exclusively from that brand. So trust is quantifiable and its impact is significant, as you can see by these numbers.
Interview on the TrustTalk YouTube channel (with subtitles)
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When companies or politicians break trust, it takes three equally important steps to repair it. As a professor of management practice at Harvard Business School and co-writer of the book “The Power of Trust: How Companies Build It, Lose It, Regain It”, (PublicAffairs, July 2021) Sandra Sucher takes us through some examples of apologies after broken trust that were ineffective, causing tremendous harm. UBER is a very competent company, yet they are losing customers due to a lack of trust, Volkswagen had its trust failure after rigging emissions test of their diesel cars, for which the CEO apologized, but did so unconvincingly, with great consequences.
But there are examples of successful trust repair. Who remembers Japanese-basedplatform business Recruit Holdings, who after a scandal showed how to repair broken trust, or the PWC gaffe from 2017, where employees mixed up the winner’s envelope, as a result of which La La Land was announced the Oscar winner, instead of Moonlight. Both did a remarkable job in restoring trust. In the interview, she explains what it took to restore those trust failures.
She talks about a study by Kurt Dirks who found that the NCAA basketball team won the most games due to the trust they had in their coach and about the way politicians can restore broken trust, about creating a trusted work environment for women, and the four attributes of trust repair.
In the book, Sandra Sucher and Shalene Gupta examine the economic impact of trust, and the science behind it, to prove that trust is built from the inside out.
The interview
In the TrustTalk interview, we talk about the four elements of trust repair: competence, motives, means and impact. About the last one Sandra says:
This is the sort of it doesn’t matter what the company intends, it’s really what’s the actual consequence of their actions. So I’m going to tell you a brief story about a female reliability engineer, her name was Susan Fowler, and in 2017 she wrote a blog post about what it was like at UBER after she left, and she recounted many really awful tales of sexual harassment not being followed up by the company. Now that’s not actually why I’m telling you this story is awful, as that was. She mentions in passing in this blog post that when she started in her division, women were 25 percent of all the reliability engineers. And when they left, when she left, they were three percent. Now, UBER didn’t set out to say, let me create an environment in which women are not happy to work, but the consequence of its practices, its policies, it’s the culture that they had, meant that this was a place that no woman worth her salt wanted to be involved with. And so that’s what it means to care about company impact. It’s the unintended impacts that worry us as much as the intended ones. And you can see this in all of the concerns that we have about climate change and the consequences of company actions. Companies don’t intend to pollute, but they do, and that’s what we expect them to take care of. We don’t care that their intention was not to do it. What we care about and trust them for is how well they actually try to remedy the effects that they have.
About competence:
So there are different kinds of competence. Of course, I’m an academic at this point in my career, so forgive me for this, so you can think about two kinds of competence, at least, that organizational scholars look at. One is technical competence. So am I good at the UBER stuff, right? Can I create that ride-hailing app? The other is managerial competence, and that’s my ability to adjust to changing circumstances and to manage relationships with different groups to accomplish my goals. Now, UBER is notably bad at that. It’s in the crosshairs of regulators and literally every country where it does business and for good reasons because they don’t like how UBER does business. And so thanks to some information you had shared with me, I’m aware of the fact that the Court of Amsterdam ruled in September that UBER drivers are not independent contractors. That ruling actually came out in the UK earlier in 2021. And it is something that the EU is now proposing, which is to classify gig workers as employees. So this is a very good example of unfair means, right, UBER treats these people as employees, but actually doesn’t want the financial consequences of owning them, having to give them benefits, having to give them vacation pay and things like that. And so that’s why it is that we think that they may not be competent in all the ways that they think they are.
About trust repair for politicians:
So I don’t actually think that repairing trust is going to be different for them. And what I mean by that is they would follow the same three steps, so the first thing they’d have to do is to acknowledge the harm and apologize for imposing restrictions that people have suffered under. People would want to hear that the politicians know that this has been hard and that they are really sorry for the fact that they’ve had to make these efforts to try to stop and limit the effect of the virus. The second thing is they should explain why it is that they were doing what they did, what trade-offs they faced, and why it is that they came down on the side of this versus that. People want an explanation of what it is that’s occurred. And if you can explain your reasoning, it builds confidence and trust that you have a process for thinking this stuff through and that it’s not random or something that you didn’t give very much thought to. And then in terms of an offer of repair, this is a question where I think politicians need to become more specific about the conditions under which they would allow the restrictions to be lifted. So that’s what people are looking for. They understand, you know, this is highly contagious, but reports are coming out now that this actually doesn’t make people as sick. So that’s going to require kind of a different calculus as people try to balance what it is of exposure to this virus versus actually having people get sick from it. But in any event, in my own university at Harvard Business School, my school has actually been quite good about this, they just came out with an announcement yesterday that said, week by week for the first three weeks in January, here’s exactly what we’re doing. Here’s why we’re doing what we’re doing, and here’s when we will be making the call as to what we’ll be doing the next week. And so if I’m teaching, which I’m not in that particular period of time, I would at least have the confidence in if I’m a student of knowing, OK, I get it. I know what I’m going to find out what’s going on. Now it is much easier in a controlled environment like a business school for people to do that, but I think the governments can actually at least help people understand the data that they are looking at to help them understand when it is that they might be able to lift restrictions so when case counts get below a certain level perhaps we could do that and I think that’s the kind of offer of repair of a transparency that I think we haven’t had to date.
You may also like Author Talks, where McKinsey Global Publishing’s Raju Narisetti chats with Sandra J. Sucher about her new book, The Power of Trust: How Companies Build It, Lose It, Regain It (PublicAffairs, July 2021).
Prefer reading while listening to the interview? Go to the TrustTalk YouTube channel
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