Can Anyone Be Trusted?
Business Voice, March 2004
‘Trust Me’ said the Prime Minister when we went to war with Iraq. It was an appeal that allowed him to gain a majority vote in the House of Commons. Many of the electorate gave him the benefit of the doubt. But a high proportion of the population remained deeply suspicious. What has unfolded since has merely confirmed their doubts that politicians are not to be trusted. As the late Bob Monkhouse used to say, we expect comedians to tell us jokes and politicians to tell us lies.
Corporate leaders have also had a pretty rough deal over the past couple of years. Enron and a few other major scandals have tarnished the reputation of the whole of the business community. A MORI/FT survey conducted last summer revealed that a majority of employees did not trust their bosses to tell the truth. They also expected their companies to renegade on their pension obligations.
But that was last summer. Now it looks as though things are on the way up as far as the reputations and the trustworthiness of business is concerned. That is if we are to believe the findings of Edelman trust Barometer that, through telephone interviews with 1200 opinion leaders across the world, surveys attitudes towards business and government. It’s published findings a couple of week’s ago discloses that trust is improving in Europe and the United States compared with twelve months ago.
That’s the good news. But if we look more closely at the findings there is still cause for concern. For a start, the rise is up from 35 per cent to 40 per cent. Movement in the right direction but only by five per cent and still less than fifty per cent. Suspicion is still most directed towards US owned companies.
Perhaps we should not be surprise by these results. We live in an age of suspicion when we no longer believe at face value what people tell us. In the past we would have accepted without question our doctor’s diagnosis of our health condition. Today if it is bad news, our first reaction is to rush for a second opinion. We no longer believe what our teachers tell us. We no longer accept anything told us in the classroom as ‘the truth’. In fact a good education is regarded as one that encourages us to question and to challenge our everyday taken-for –granted assumptions.
This is reinforced by the media which tells us not to believe what governments and politicians tell us. But today this has now been extended to embrace business issues. Jeff Randell, Business Editor of the BBC is to be congratulated for putting business matters on to the news agenda. Before him, these were hardly covered in news bulletins or appeared in TV programme schedules. There may have been Sir Harvey Jones but that was about it.
But to do this business issues have to be either entertaining and/or newsworthy. This means the programming outcome is either The Office or editorial matter that is more likely than not to depict business in a less than favourable light. There is bound to be a tendency to focus on the bad things: plant closures, redundancies, fat cat pay rises corporate scandals and so on. On the other hand good news does not make Big News stories.
It is no wonder that talented young people are more reluctant to get jobs with large companies. Their teachers and the media do not paint an exciting picture of life inside the corporate zoo. I do not know of one school teacher who is excited by enterprise and the business world. This is hardly surprising in view of the fact that graduates become teachers not because they want to help young people but more so that they can stay out of the clasp of corporate life themselves. In no school do I know where business studies are given high status. Too often this subject area is taught by the more mediocre members of staff who have as much enthusiasm for their subject as the supporters of Stockport County, losing at home to Chesterfield on a wet and windy Saturday afternoon.
And so how does business re-build trust in a national culture that is essentially anti-business? As with most things in life it is not rocket science. It means that business, and especially big corporations have to behave themselves in honest and straight forward ways. It is no good them behaving like Tony Blair and saying to their employees ‘trust me’. That carries no weight in this day of cynicism and suspicion. Companies have to work for the trust of their employees. This means it is no longer enough for companies to engage in superficial internal and external PR campaigns in which the express their commitment to sustainability, the environment and other fashionable objectives. Companies have to practice what they preach. Otherwise, the merely reinforce the cynicism that their staff are likely to have in the first place.
To build trust, companies need to have open and transparent decision-making processes. They need to have measurable performance indicators of their commitment to their publically-declared corporate values. The salaries of their top executives have to be explained according to more precisely-related performance targets that incorporate the interests of all stakeholders-employees and others-and not just the short term narrow interests of their city institution shareholders. Twenty-first century employees have very different expectations from their companies than the industrial workers of the old age companies of the twentieth century. Social responsibility, public accountability and good corporate governance are at the core of these.
But why does corporate trust matter? Why should it be an issue? Because in this inter-connected global economy, national and corporate competitive advantage is dependent upon constant innovation and change. Employees simply do no come up with the new creative ideas that underpin this if their do not trust their bosses.
© Professor Richard Scase