People perceive the world today as a very untrustworthy place. Statistics indicate that only 46 percent of survey respondents trust business to do what is right. Furthermore, only 20 percent of Americans trust the country’s financial system. The federal government’s inability to hammer out a deficit/debt solution, and the ongoing European Union debt crisis, has led to an historic lack of trust in government as well, leaving the world seemingly without trust.
The headlines and statistics leave no doubt that the world is in a trust crisis. Yet, paradoxically, trust is more important than ever. The bottom line is directly connected to trust. The 2009 Edelman Trust Barometer shows that more than three-quarters of informed respondents refuse to buy products or services from a company they distrust. Even more eye-opening, high-trust organizations outperform low-trust ones in total returns to shareholders (stock price plus dividends) by 286 percent. From 1998 to 2010, high-trust organizations outperformed the market by 288 percent. Trust has become the new currency of the global economy.
There is a direct connection between trust and prosperity because trust always affects two key inputs to prosperity: speed and cost. In low-trust situations, speed goes down and costs go up because of the many extra steps that suspicions generate in a relationship, whereas two parties that trust each other accomplish things much quicker and, consequently, cheaper. The authors call high trust a “performance multiplier.” High trust creates a dividend, while low trust creates a wasted tax.
However, trust affects more than just prosperity. It has a positive impact on creativity, health, emotions, and overall well-being. Trust dramatically improves employee engagement, leading to such benefits as increased innovation. Trust also improves joy, which has become more and more important to people. The authors point out that Denmark, the most trusted nation on earth, is also the happiest country in the world.
In the same way that trust quantitatively changes prosperity, it qualitatively affects energy and joy. Some examples of flourishing high trust companies are Wipro, a large IT company in India, and Zappos, the Internet shoe retailer. These are just two of thousands of teams and organizations fueling the renaissance of trust.
Trust has many facets, one of which is creating a climate that benefits all stakeholders not just shareholders. PepsiCo, where CEO Indra Nooyi started a movement for the company “to deliver sustainable growth by investing in a healthier future for people and our planet,” is one of the many examples of companies trying to improve the world just as much as the bottom line. The CEO of GlaxoSmithKline, another example of a business with an enlightened sense of corporate responsibility, Andrew Witty, says “If you don’t have the trust of the societies you serve, you don’t have a long-term sustainable business model.”
However, even as people come to realize the importance of trust, there may be reasons why they find it difficult to trust. It all has to do with which glasses they are wearing.
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Each message is backed with statistical study and results which reflects the depth and understanding of the subject. Interesting reads!