In modern business, trust is not just a moral imperative; it’s a fundamental asset that can make or break a company’s success. As businesses navigate a world of increasing complexity and connectivity, the importance of building trust within teams, with customers, and with the public at large has never been more critical.
Externally, trust translates into customer loyalty and brand reputation. A PwC survey found that 87% of consumers stated they would purchase more from a brand they trust, while 82% would recommend that brand to others. Moreover, the Edelman Trust Barometer reports that businesses are now expected to be a leading force in societal change, with 76% of respondents believe that CEOs should spearhead change instead of relying on government intervention.
Trust Turned Usha International’s Fortune
Usha International Ltd. (UIL), a prominent Indian home appliance brand, underwent a significant transformation by prioritising trust across the organisation. Partnering with consultants, UIL redefined its strategy to align with evolving market trends. The USP of this transformation was building trust at all levels of the organisation. The consultancy team worked closely with UIL’s management and employees to co-design a new strategy and process backbone. They focused on understanding the changing market dynamics and aligning the company’s practices with these new trends.
A significant part of the transformation involved revamping UIL’s distribution model. Traditionally, UIL sold their products to wholesalers, who then distributed them to individual retailers. However, the consultancy team and UIL’s sales team decided to go directly to rural retailers to understand their expectations, constraints, and needs. This led to the development of an efficient system that allowed retail stores in remote areas to access products they previously couldn’t.
The trust built through this close collaboration and the willingness to adapt to direct feedback from the ground level turned the company’s fortunes around. From a loss-making business, UIL has transitioned to industry-leading growth in recent years. The high level of trust established with people at all levels of the company not only enabled future profitable growth but also expanded the reach of Usha’s products to small villages that were earlier dependent on urban wholesalers.
Transparency & Integrity: The Key Drivers
Companies that are open about their processes, successes, and failures are more likely to be perceived as trustworthy. This transparency extends to data handling, where 92% of consumers say companies must be proactive about data protection. Integrity, too, plays a vital role. Businesses that consistently act in ethical ways, even when it’s not the most profitable route, earn the respect and trust of their stakeholders. How a company responds can either erode or strengthen trust.
The Competitive Advantage
Trust can be a significant differentiator in a marketplace where products and services are often similar. A Forbes article highlights that companies with high levels of trust see 2.5 times more revenue growth than companies with low trust levels. Furthermore, the Harvard Business Review notes that trusted companies outperform their peers by up to 400% in stock market returns. Trust isn’t just a feel-good factor; it has real financial implications. The World Economic Forum estimates that the level of trust within a country’s economy could account for as much as 35% of its GDP. On the flip side, a lack of trust can be costly. The Association of Certified Fraud Examiners reports that businesses lose an average of 5% of their revenue to fraud each year, often stemming from a lack of internal trust and oversight.
While trust is intangible, it can and should be measured. Specific tools provide insights into how much trust exists within an organisation and its customer base. These metrics can guide strategies to improve trust and, by extension, performance.
Trust is a powerful business asset that yields a multitude of benefits. It enhances collaboration, drives customer loyalty, and can lead to superior financial performance. In a world where trust can be quickly eroded through a single tweet or news story, the imperative for businesses to actively build and maintain trust has never been greater. As we look to the future, the businesses that prioritise trust as a core component of their strategy will be the ones that thrive in an increasingly interconnected and transparent world.
