This article first appeared in The Edge Malaysia Weekly on April 24, 2017 - April 30, 2017
BUSINESSES today have to embrace the trust initiative and build their trust reservoir because there is an erosion of trust the world over, observes PwC Malaysia managing partner Sridharan Nair.
“There is a need for businesses to take on the mantle of rebuilding trust in these very volatile times, particularly when trust in institutions and governments is at an all-time low globally,” he tells The Edge.
He points out that this decline of trust in institutions has been happening for some time now, although trust deficit issues have become more visible recently. “There is much greater transparency today because of technology — more information is available. There is a lot more visibility of what businesses do and don’t do, whether it is governance, customer service or operations.
“Another reason public trust has eroded generally is the disparity and income inequality that is becoming more pronounced across the world. And that has emanated in more recent times from shocks such as the Brexit vote and Trump coming to power, to name a few. Edelman (a leading global communications marketing firm) conducts an annual trust survey called the Trust Barometer and in the most recent one, it describes the current situation as an implosion of trust. It essentially says society as a whole has lost faith in many institutions, whether it is government, business or media.”
Given the declining public trust and the fact that PwC deals with various businesses on a day-to-day basis, Sridharan, or Sri as he is popularly known, says the company felt that it could play a role in elevating the whole discussion on business and trust. After all, PwC’s own purpose as a global network of firms is “to build trust in society and solve important problems”.
The international outfit is taking the initiative to encourage Malaysian companies to make trust-building a priority in business as it believes credence is a premium that is increasingly difficult to nurture and protect.
PwC inaugurated its Building Trust Awards in November 2015, acknowledging 10 local public-listed companies for their efforts in gaining the trust of their customers and investors. This year, the awards are slated for September.
“What we are hoping to see from this initiative is a greater discussion on trust in the broader market and for corporates, a better appreciation of where they stand on the barometer of trust, and whether the companies would like to take that to the next level and involve the broader public and future leaders in the conversation,” says Sri.
Why businesses?
Sri says PwC believes that the subject of trust, while an implicit assumption in business, is not generating the level of discussion warranted for such an important matter. Thus, it wants more open deliberations on it and to raise awareness of the roles that businesses can actually play.
“We started the Building Trust Awards in 2015 and conceived a larger programme on building trust. We want to broaden that over the years, getting a bigger group of people, whether future leaders or the public at large, involved in the whole discussion.
“We think businesses and business leaders can play a larger role in terms of leading the conversation on trust and filling this void that you have across the world, as opposed to being a bystander and saying that trust is not at the forefront of what businesses are trying to do,” Sri explains.
As businesses are contributors to the economies across the world in a very large way, they are in an ideal position to drive the trust initiative, he adds. “They [businesses] are the ones that create jobs, they are the ones that are at the centre of innovation. Therefore, they are well positioned to shape a lot of discussions. They touch and affect the lives of many of us and society as a whole on a daily basis.
“As author and motivational speaker Zig Ziglar says, if people like you, they’ll listen to you. But if they trust you, they’ll do business with you. So, in the context of business, it makes a lot of sense.”
Interestingly, says Sri, surveys carried out over the years revealed the popular belief that the bigger the company, the less trustworthy it is. Bigger companies are also more closely scrutinised than their smaller peers when it comes to trust.
“People associate large organisations with being less trustworthy. That is the changing landscape. Primarily, taking the context of business, the view and lens that people have is, the larger you are, the more you are there to drive your profit motive but not beyond that.
“I think companies have recognised that and are making a greater effort to build trust. The example of some US business leaders going out of their way to speak up against a newly elected president with regard to some of his proposed changes to immigration laws is a demonstration of that,” he says.
The concept of trust has also shifted, thanks to technology and innovation. “Imagine booking a ride via an app and getting into this car and not knowing who the driver is. That is a good reflection of how people can trust something that affects them directly as opposed to something far away with a revered name but one that you don’t have a connection with. That is the changing lens,” Sri says.
Another interesting point gleaned from trust surveys is that the CEOs of bigger businesses are more likely to be scrutinised closely, he adds. “This is because they are associated with the profit motive. But there is an exception — the CEOs of technology and innovation companies. They are seen to be down to earth, as bringing real solutions to things that matter to us and as more transparent and agile. People relate to them a lot better.”
Trust, although intangible, can bring about tangible results, Sri notes. “The presence of trust in a business helps in terms of its performance and growth. For example, organic food. The fact that it is labelled and described as organic wins the trust of consumers. This concept that longevity — how long you have been in existence — equates trust is no longer valid. That used to be the case. The barometer of trust now is what people can see and hear and their personal experiences ... as opposed to this institution out there that is impersonal.
“Another example of how trust can drive businesses and growth is if you look at the more recent businesses that have flourished using technology and innovation as a base. Like ride-sharing or anything from cleaning and laundry to transport, they are selling the idea of trust at the end of the day. These are the fastest-growing companies in the world.”
He remarks that established businesses such as financial institutions are looking at how they can engender a better consumer experience using technology and, ultimately, to win trust.
“We believe trust should be the driver because it is not just a nice thing to put in your corporate responsibility report but also increasingly a yardstick of how people engage with you and judge you as a business — primarily from their experience as a consumer but also as an investor or employee. We think whether it is an established or growing company, trust is going to be the driver for businesses going forward, partly driven by this point of transparency.
“The second point why this is key is that only in a time of crisis do you realise the importance of having a reservoir of trust that you built with your stakeholders. Trust needs to be treated like a good friend — you shouldn’t take it for granted and you will only miss it when it isn’t there. From a business perspective, if you don’t have a reservoir of trust, at a time of crisis, you do not have something to fall back on.”
Citing Samsung’s phone recall as an example, he says, “It acted quickly, did the recall and was transparent on why the issues happened. The general view is that it preserved its brand loyalty.
“That’s why we think trust in business is an important factor; it helps to ultimately drive performance and growth … and although it is intangible and you cannot put a value on it, in times of difficulty or crisis, it has immense value.”
For more information on PwC’s Building Trust programme, visit www.pwc.com/my/trust
The Edge is the media partner for the PwC Building Trust Awards 2017
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