The big business trust continuum: How to retain the trust earned during the pandemic
How do we rebuild trust? It’s a question that’s been exercising our leading business minds in recent times. Few, however, would have anticipated the answer could be ‘through a global pandemic.’
Yet as we approach the end of a singularly remarkable, confronting and exponentially tough financial year, this is the unexpected reality with which we grapple. We should be clear that for all its many diabolical effects – and more may be yet to come – COVID-19 has also done much to restore trust in Australian business.
Trust, of course, is a complex concept. In the context of business it’s therefore useful to break it down into the three key qualities that build trust: ability, integrity, and humanity.
Perceptions of ability – the capacity to deliver goods and services and meet goals and responsibilities – have long been positive in Australia. If you invest a dollar with a major Australian bank, you expect it won’t get lost. When you flick a switch you expect the lights to come on. Most Australians think most major businesses are ‘able’.
Perceptions of integrity – doing the right thing by adhering to commonly accepted ethical and moral principles – has had some serious body blows, especially those delivered by the banking Royal Commission.
Perceptions of humanity – demonstrating genuine care for those affected by an organisation’s operations – has been the weak spot for most organisations in recent years. Survey after survey has indicated people don’t believe modern Australian corporations are genuinely interested in anything aside from profit at all costs.
But it is corporate humanity that has shone through since March. By creating an urgent public health challenge transcending traditional business concerns, the pandemic required Australian business to connect with core purpose and show its humanity. It’s a demand that has been seized.
Demonstrating humanity, building trust
Take the supermarkets. Typically cast as a villain, suddenly most Australians became acutely aware of how much they depend on the local supermarket for the essentials of life. The majors responded by building swiftly and impressively on their capacity, creating over 30,000 new jobs to meet unprecedented demand and working innovatively to manage supply chains to ensure essentials remained available. Crucially, they were also able to demonstrate their humanity by focusing on serving vulnerable populations, reconfiguring their online delivery services to prioritise the elderly, people with disability, and those in mandatory isolation. Delivery of ‘basic boxes,’ essential goods at cost, also helped boost trust.
In telecommunications, the major telcos responded by suspending disconnections and late payment fees, and providing extra data and discounted plans. The sector is now supporting thousands of disadvantaged students and teachers with free internet access and hardware to assist online education.
The banks were able to defer and extend loan repayments, waive fees, and, crucially, increase access to credit. In response to an inundation of hardship calls, they hired hundreds of extra staff to help process the backlog of requests and help customers navigate support packages and online banking tools.
In the energy sector, the Energy Network Relief Package was launched to support households and small businesses by rebating or deferring bills. Multiple energy providers have further committed to keeping struggling customers connected to the grid and offered new hardship programs for those in financial stress.
More broadly large businesses demonstrated humanity through their immediate efforts to protect the health and safety of their people. It was big business that led the charge in banning non-essential travel and supporting and operationalising work from home measures. Many introduced special COVID–19 working arrangements to enhance flexibility and support parents and those with carer responsibilities.
And while employment has taken a hit, many of the nation’s largest businesses implemented policies designed to protect as many jobs as possible inducing internal redeployment, across the board ‘shared’ pay cuts, or reduced work hours. Executives and directors have also taken major salary reductions.
The size of Australian big business has been regularly criticised. Yet the COVID–19 crisis has revealed how scale can help businesses work cooperatively with government to reliably fulfil their societal purpose at times of heightened need.
The real trust challenge lies ahead
Yet while we are now allowing ourselves to hope that the peak of the health threat may be behind us, the trust threat for business lies ahead.
Although exhausted directors and managers will be loath to hear it, navigating through the immediate crisis was probably the easier part on the trust front.
Just as approval ratings for federal and state leaders have risen markedly, a similar effect should be expected for business reputation.
The loan holidays currently being extended by banks will have to end. Likewise the bill reprieves offered by telcos and energy companies. As local grocers and butchers struggle to regain their feet, supermarkets may find themselves re-cast as unsympathetic Goliaths.
And all of this will take place against the backdrop of an economy staggering back after serious crashing, along with a nervous community feeling unlocked, but for some also unsafe.
This environment will provide the true test for big business: how to maintain the trust earned during the crisis.
There are, of course, no easy answers. Strategies will vary greatly by sector. But if trust is to be safeguarded and preserved, there are four general principles that can be usefully applied.
1. Prioritise the most vulnerable
The humanity of a business is primarily judged on the impact it has on its most vulnerable stakeholders, whether they are customers, employees or suppliers. Yet although the public may demand that businesses simply ‘do the right thing’ for those who need it, in reality the proposition is complex.
Supporting the most vulnerable demands that they are first identified. And vulnerable people are often more vulnerable because they have not been visible to decision makers.
Times of crisis call for a reassessment. Those already vulnerable will likely remain so because their particular characteristics, like age, health, and socio-economic status make them susceptible to the spread of disease. But others may be becoming vulnerable for the first time due to job loss.
For businesses genuinely interested in supporting the vulnerable, the first and most important part of the task will be to really listen and understand their needs and situation. Only from there can actions and policies be formulated that authentically show genuine care and concern.
2. Ensure customers have a sense of control
The exceptional emergency circumstances that characterised the early stages of the pandemic are now subsiding. But a lack of communication and structure about how we transition to the ‘new normal’ will make people feel uncertain and out of control.
The worst way for business to approach this is to assume there will be a moment when things can just abruptly switch back to how they were. That is setting up unrealistic customer expectations when no one knows for certain what the future holds.
Yet while customers will understand there won’t be perfect choices available, they will want some choice – a chance to exercise agency. This involves recognising that customers’ needs and circumstances may have shifted through the pandemic.
Businesses can build trust by thinking about how they can provide meaningful options to customers, to strengthen their sense of control.
3. Be transparent about how decisions are reached and why it is fair
A core way to show humanity and respect is to explain, transparently and honestly, how a decision was made and why it was decided to be the most fair and reasonable course of action. Following fair and consistent processes when making decisions that impact others is always important for trust, but particularly so when tough choices need to be made.
This might seem obvious, but the norm for Australian big business in recent times has too often been to present a decision as a mysterious fait accompli. The underlying assumption seems to have been that open or honest explanation equates to weakness or indecisiveness. This attitude has no place in today’s dynamic environment.
4. Continue to embrace agility
Along with bringing humanity to the foreground, the crisis has also shown the remarkable capacity of Australian business to move swiftly and decisively when necessary.
This flexing of unused muscles has been timely. In recent years, we’ve seen boards increasingly taking a risk averse stance which has stifled innovation. Yet what we’ve seen over the past months is agile decision making.
Most universally this has been seen in the innovations to allow people to keep working flexibly. Much of this has been enthusiastically embraced and could help drive a more agile culture. Wherever possible boards should remember the fluidity they are capable of in crisis and retain that ethos as we recover.
But although rapid moves and constant momentum have been central to surviving the crisis so far, the key to ensuring trust gains are not squandered will ultimately rest on staying focused on the fundamental questions:
Why are we in business? What is our purpose? What is our societal function?
Answering these questions bravely is not purely about ethics; it must also be about how businesses deliver on their responsibility to those who invest in them. As companies turn their mind to year end reporting, now is the time to think about how they will tell their story to investors, and explain how following the principles outlined here will bring out the best work in their employees, build loyalty and increased opportunity with customers, enable efficient use of resources and drive greater returns longer term.
Many companies have sacrificed short term profitability in the interests of the long term resilience of our overall economy. How they maintain discipline in focusing on long term value creation, and how well they explain to shareholders what they are doing and how they are looking after the needs of all stakeholders will distinguish between those who do, and don’t, really bake in the trust gains from the crisis.
Businesses should be proud to make profits, to earn good returns for shareholders which in turn will enable them to attract and retain funds for investment to grow the economy, jobs and prosperity for all Australians and to meet the needs of customers. This is the virtuous circle which will underpin how we rebuild out of this crisis and which will make Australia strong again.
Because how we grow matters.