Trust: How to get it back after the Global Financial Crisis

Trust: How to get it back after the Global Financial Crisis

Trust: How to get it back after the Global Financial Crisis

Trust in leaders

The 2013 Edelman Trust Barometer reinforces the crisis of confidence in leaders themselves, with trust in business 32 points higher than trust in its leaders to tell the truth. This means the lack of trust ignited by the crisis has grown personal, with the onus now on leaders themselves to start restoring it.

Michael E. Porter, a leading authority on company strategy and the competitiveness of nations, says that the legitimacy of business has fallen to levels not seen in recent history. One of the dangers he cites is that this diminished trust may lead governments to set policies that further undermine competitiveness and sap economic growth.

Trust needs to be restored by the financial services firms themselves, not only to avert the intervention of more government regulation, but also to keep in line with customer expectations.

Trust in companies

The crisis has also strained the trust between companies and their employees, which can be measured by the amount of gossiping, venting and complaining that goes on under the surface. Most leaders are too weak to address this because they are scared of conflict, and don’t know how to build the trust that resolves it, in turn, creating a vicious cycle.

Financial services firms must earn and maintain the trust of their employees by acting with integrity to get to the truth of what’s causing a problem, and then fixing it. Once this is done, the onus can shift to employees to deliver. This is essential to rebuild the trust that is the foundation of our system, and strengthen it through effective processes that sustain it.

Trust is the key commodity in business. It may not have been so in the past, but it is today.

In the 1500’s: Nicolo Machiavelli argued in his book The Prince that cruelty restores order and obedience.

In the 1800’s: Businessmen were able to ignore social justice to increase profits.

In the 1980’s: “Greed was Good” on Wall Street.

In 2013: Companies no longer have such control over markets, customers or employees and need new tools of engagement.

Our global system too is now so interdependent that our interests are becoming aligned. Financial services firms need to serve customers and communities better in order to serve their own interests.

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