Building Trust in the New Economy

2009 was the year the rules changed. The ‘who cares?’ attitude that seemed to dominate so many of our businesses, and personal interactions, up until then finally faced a reality check. Suddenly, large numbers of us started to care.

We cared about whether our life-savings and investments would still be around for us to draw on so we could enjoy a comfortable and happy retirement. We cared that our order books were shrinking and our debtors were taking longer to pay, or not paying at all. We cared that the jobs we were in, and the businesses we ran, would continue to generate income so we could keep paying the bills and live the life we’d become accustomed to.

We watched as companies, large and small, with apparently enviable reputations, crumbled and fell, unable to climb out of the holes they’d got themselves into in the ‘easy-come, easy-go’ years before the crunch. For the first time in a long time, or even living memory, hundreds of thousands of people found themselves facing a life of uncertainty and distress.

The world changed and a new economy emerged. Doubt became a major influencer and the level of trust we had in companies and individuals became critical. Would they deliver on their promises? Did we feel confident enough to do business, or engage with them? Could we trust them?

Confidence is often an early casualty in recessionary times. In its place doubt can spread through the economy like a virus – causing people to abandon even long standing businesses, radically change their spending habits, and question the notions of value and worth. Far from being an old-fashioned value of dubious worth, trust made a come-back in 2009 – big time.

The global economic crises that tipped many countries into recession caused many of us to re-evaluate both our own, and others’, economic, commercial and social behaviour. Much of what we previously accepted as ‘the norm’ came under fire for being inappropriate, out-of touch, and even immoral.

The currency of trust became as important an asset as dollars and cents – if not more so. And like the oxygen of cash, without trust, our success, and continued existence, is threatened.

The impact of loss of trust should not be underestimated. Research carried out in New Zealand in 2009 by Hayes Knight’s Sustainable Advantage found 75 per cent of respondents no longer buy from businesses they don’t trust. More than half – 55 percent – said they had stopped buying from a business they didn’t trust in the previous six months, and 61 percent of them then urged family and friends to do the same.

On the up-side, 75 percent of those interviewed said that hearing good things about a company from family and friends influenced their purchasing behaviour. People do business with people, or more specifically, people do business with people, and companies, they trust.

Approximately 400 years ago philosopher Joseph Hall said:

“A reputation once broken may possibly be repaired, but the world will always keep their eyes on the spot where the crack was.”

Wise advice for 2010 and beyond.