“Trust is the currency of innovation. It’s only with trust that we can progress confidently into the unknown. And the unknown is precisely where innovation comes to life.”
This is the opening line of a new study on why businesses should invest in building the trust of their stakeholders or risk falling way behind in a world of increasing disruption.
Jointly done by Mastercard and Harvard Business Review Analytic Services, the report titled Trust: The Currency of Innovation adds that while trust can be defined in various ways when it comes to innovation, it is the belief in the reliability and soundness of a new idea brought to market.
The survey of more than 1,800 executives across the globe adds that just like innovation, trust blossoms when companies prioritise it, develop strategies to build it, track metrics that can show them when and where to change course, and then consistently apply those learnings not just over days and weeks but also over years and decades. Mastercard Chief Innovation Officer Ken Moore observes that the businesses surveyed underestimate the importance consumers place on these issues by up to 31 percentage points.
This is even as consumers feel that the degree to which they trust business factors into their purchasing decisions, with 76 per cent saying they won’t purchase from organisations they don’t trust.
More than 66 per cent say they would be willing to pay more to a brand they trust.
How so? The report explains that trusting customers are more likely to believe that a new product or service has been designed with their best interests in mind.
“Trusting employees are more likely to support new projects and new ways of working, confident that the company has their back. Trusting investors are more likely to fund innovation initiatives, and trusting partners are more likely to share insights and work through challenges,” the report adds.
And on the digital front, McKinsey in a new survey of more than 1,300 business leaders and 3,000 consumers globally, suggests that establishing trust in products and experiences that leverage AI, digital technologies, and data not only meet consumer expectations but also could promote growth.
“The takeaway from this research is clear: consumers are putting the safety of their digital identity in the hands of businesses they trust. Companies with digital products and services should prioritise measures that help maintain consumer trust. The practices we asked about for this survey, which we culled from best-of-breed institutions, suggest places to start,” noted McKinsey Partner for Washington DC Jim Boeh on the research dubbed Why digital trust truly matters.
Samuel Njuguna, the chief executive of Kenya’s Chumz.io (an online savings and investment platform) notes that it comes as no surprise that the digital world has given trust more credence as a powerful pillar of any business.
“Online rating of business through Google reviews and Yelp has given trust an online presence and a more tangible way for any business to be defined by the trust through a simple search online.”
“This is exactly how: Online strangers can see comments of other people who have used a similar service and this has meant trust whether communicated online or word of mouth continues to be a powerful means of determining how successful a business is or will be. Whether it’s friends sharing credible businesses and people asking their trusted friends which businesses are best for a given need they have,” he said.
Transsion Holdings Kenya Chief Executive Ray Fang adds that a company’s existence is tied to the level of trust it can earn from its stakeholders, more-so customers.
“Companies cannot run without the trust of their customers. Without trust, customers cannot bring any value to the company and vice versa. Companies earn trust from their stakeholders if they also strive the meet their needs,” Fang adds.
The executives and academics interviewed for the Harvard and Mastercard report also went ahead to offer tips for building - or rebuilding - trust.
Understand your customers
This comes from the effort to reach out to them to learn what is important to them and assess capabilities and core competencies to figure out where the business can make a difference, and then work to deliver on those capabilities to set itself apart from the competition.
Lean into purpose to deliver a positive impact
When customers and other stakeholders believe an organisation is prioritising the welfare of others, it reinforces the notion that the organisation isn’t putting self-interest above all else. That selflessness can drive trust.
Innovate to win trust and win trust to innovate.
This is an insight pegged on Mastercard’s first Business Innovators Index survey in 2019 which found that of the consumers who prize innovation, 48 per cent said they assigned a high priority to the continual development of new products, services, and features, while only five per cent reported it to be a low priority.
This year’s survey also reveals the importance consumers now place on another kind of innovation - companies protecting their health and safety amid a global pandemic.
This transparency helps show customers and other stakeholders that the business is acting in the way they have advertised - in other words, that you are authentic. Transparency also can be critical when an organisation is looking for funding and resources to pursue new ideas.
Integrity and empathy also matter
It simply means that if customers or employees don’t believe your organisation has the capacity to understand or feel what they are experiencing, within their frame of reference, they will find it hard to believe you have their best interests at heart - feeding a scepticism that can erode trust.
Diagnose broken trust accurately before rebuilding
It means that when trust is broken, it is critical to figure out the reason - a breach of authenticity, a failure of logic, perhaps a lack of empathy—and then respond accordingly.
Building or rebuilding trust is like any other business challenge
As with any business process, building trust requires planning, resources, measurable metrics, a willingness to correct course when something goes wrong, and a sustained commitment.
Position yourself as a partner, not a vendor
Especially important for business-to-business (b2b) organisations, the experts point out that positioning the organisation as a partner of the customer with skin in the game and a long-term interest in the customer’s success demonstrates an alignment that can help build trust.