Saul Klein is dean of the Gustavson School of Business at the University of Victoria.
An auto maker fakes emissions data. Cellphones spontaneously combust. A pharmaceutical company hikes prices on life-saving drugs. A bank issues credit cards and opens new accounts for customers without their knowledge. These are only a few recent examples of the flaws and foibles we see daily. Much as these examples reflect poorly on the individual companies involved, they also have ripple effects on our economy and society as a whole.
When the daily news is a litany of corporate mistakes and misconduct, it’s hard to maintain one’s faith in the system. Our trust in business is shaken.
A few days ago, the Gustavson School of Business released its annual brand trust index. We seek to illuminate the other side of the story, where brands build and maintain our trust. We show that trust is important for business success and highlight the brands that do well. We trust brands for the functions they perform, that are reliable, that are of high quality and that provide good value for money. We trust brands that treat us well, that respect our privacy, that communicate honestly and that respond well to our concerns. And we trust brands that demonstrate a broader set of values, that respect and protect the environment, that contribute to local communities and that care about societal well-being.
Those businesses that do a good job of building trust through their actions benefit from consumer recommendations. By demonstrating this virtuous cycle, we hope to encourage more businesses to avoid short-term pressures and invest in building stronger relationships with their customers based on trust. Such investments pay off for individual businesses, but also pay off for all of us in creating and sustaining the type of societies in which we all want to live.
Trust is one of those foundational elements in our lives that is critical for all interaction but that gains our attention only when it is absent. Trust is both a glue and a lubricant; it holds societies together and smooths interactions. Without trust, we see societies splintering into different factions or even spiralling into conflict. Without trust, we see increasing control and regulations put in place to safeguard people against the actions of others.
Trust is something that is critical for business to focus upon. To the extent that businesses violate consumer trust, they pay a price in the marketplace. Collectively, however, such actions also undermine trust in our economic system as a whole. It is the excesses of corporate misconduct that feed the suspicion that the system is unfair. Such excesses stimulate calls for greater protection and encourage a sense of alienation. When Mylan dramatically raises the price of EpiPens, a life-saving treatment for severe allergic reactions, or Volkswagen gets caught faking vehicle emissions data, there are broader consequences on how business over all is trusted.
Whether we look at trust in institutions, such as business or government, trust between organizations or trust within organizations, it is an essential ingredient. Trust has profound implications for how our society functions and the trust that people have in each other, and we all have a vested interest in preventing its erosion.Report Typo/Error
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