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The proof of the value of trust in business is compelling PDF Print E-mail
Blog - Building Trust
Written by Karl Smith   
Saturday, 23 July 2011 13:49
A study conducted in 2002 by Watson Wyatt who surveyed 12,750 workers across all industries showed that high-trust organisations had a total return to shareholders (stock price plus dividends) that was 286 percent higher than low-trust organisations.  Another expert in the field Stephen M R Covey, highlights that trust always affects two measurable outcomes—speed and cost. When trust goes down, speed goes down and cost goes up. This creates a trust tax. When trust goes up, speed goes up and cost goes down. This creates a trust dividend.

It’s that simple, that predictable. For example, Sarbanes-Oxley was passed in response to Enron, World-Com and other corporate scandals. While Sarbanes-Oxley has helped maintain trust in public markets, this has come at a substantial price. All executives subject to Sarbanes-Oxley rules know the amount of time it takes to comply with its regulations, as well as the added cost of doing so.

Companies with high trust understand that valued employees, treated fairly and respectfully, will treat their customers well.  Set the example that you would like others to follow. Be honest about who you are and what you are about.   Ideally your business should encourage good business practices.  

The best way for consumers and employees to believe in your authenticity and develop trust with you is to communicate regularly, openly, and consistently. Trust takes time, but it is worth the investment which pays itself back in reciprocated loyalty, repeat business, and the power of referrals and endorsement testimonials. It is slower, but also cheaper with longer-term value.

Some practical tips:
  • Act with integrity: A person has integrity when there is no gap between intent and behaviour…when he or she is whole, seamless, the same-inside and out.
  • Take a sincere interest in others:  Beyond the business transaction, try to get to know your clients and employees.
  • Listen to what the consumer or employee thinks, wants, and needs. Frequently invite feedback and survey your customers. Listen and respond to them.
  • Be enthusiastic about your product or service: Again, your clients will be able to tell if you truly believe in what you are doing, or if you are only working for the paycheck.  .
  • Help your clients find solutions to their problems:   You do not want your clients to feel or act helpless.  Offer reliable assistance, but remember that your goal is to have your clientele manage things on their own and not have to call on you for everything.
  • Be honest and upfront:  Do not hide things from your clients.  If you are unsure about something, tell them.  But follow it up with research and an eventual answer.  Be clear about what you are realistically able to do and what may need to be outsourced to someone else.
  • Always follow-up to be sure your client is satisfied:  The periodic phone call or e-mail after the product or service has been delivered will set you apart from your competition.  Most new business comes in the way of a referral from a satisfied customer.
  • Exceed the customer's expectations:  Make sure that your customer wants to come back to you again and again because they trust you.
A word of caution - you cannot trust everyone in business. Trust should be earned in business and a business owner who trusts first and asks questions later can really get burned. Trust is the one thing that changes everything. Everyone in a company or organisation should work towards the building of high-trust business relationships.  

When the emphasis is on developing trust, then relationships become mutually beneficial.  The ability to foster high-trust business relationships is a measurable, definable component of all leadership, management and entrepreneurial success. Ironically, not many employers consider “trust building” as one of the key skills when they consider candidates for positions, says Smith. Fortunately, it can be taught and learned by changing our mindsets, getting the required knowledge, tools and techniques.

Copyright 2008 by Karl Smith
This article may be copied or republished with the following credit:
"By Karl Smith, founder of Business Networking South Africa, +27 (0) 071 444 2210 This e-mail address is being protected from spambots. You need JavaScript enabled to view it   “ This e-mail address is being protected from spambots. You need JavaScript enabled to view it "
 

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