Trust has always been important in business. But through the increasing prevalence of the profit-first motive, and the ways in which the internet and social media highlights events, it has become even more compelling. In what do we trust our business leaders, is now the pressing competitive issue for many businesses.
Active Knowledge Questions:
If you were to ask your customers, employees and suppliers, how much, and in what, do they trust you, what do you think their answers would be? And would that answer underpin or undermine the competitive fitness of your business?
What Is Trust?
If you were to say you trust someone you are expressing a personal belief that they are honest, sincere and will do not anything deliberate that harms you or goes against your interests. But how far can we take this definition of trust into the business world?
In a world in which self-interest is so prominent and accepted, that is actually a very big ask for many business leaders. In so many ways, today there is an acceptance, an expectation, that everyone will put their own personal interests first. It almost becomes the basis of trust, we trust each other because we both recognise that each of us will put our own interests first.
But in reality, self-interest, especially in leadership, is the antithesis of success.
We are also seeing many instances where customers are defining aspects of trust, which are directly challenging the profit-first, self-interest motive that has led many businesses and their leadership teams for decades. Some examples are:
- ‘I expect a bank to help me build my personal wealth, first and foremost, rather than their own profits.’
- ‘I expect food manufacturers to only sell me products, which are healthy for me, even though it may cost them more to produce.’
- ‘I expect social media companies to protect my personal information and privacy and not use this data to profiteer.’
These are aspects of trust which I believe go to authenticity. Are you, as a leader, in your business, true to what you say you are?
Businesses and their leaders are now being called out on their business practices, with social media giving a new force to those voices, leading to government intervention, increased regulation and significant reductions in the market value of those businesses.
I do not believe that business leaders have yet developed a response for these calls for change that align their profit-first motive driven by financial markets and a portion of their shareholder base and, in some instances, their own remuneration structures. But there is a simple response, which will deliver better outcomes for all.
Trust And Competitiveness
Trust is built from the inside out. It starts with your leadership team and the relationship they build with all those who work within and with your business. This is the core of trust in your business. From that core permeates everything that your business does, including the way it interacts with your customers. Fail to build the relationship of trust with that core group and you will go no further.
The building of this trust starts with the way you think of the competitiveness of your business. What do you think drives the competitiveness of your business?
Leaders often think of their competitive strength in a tangible context. It’s what they own, what they control and what they can sell. It lays in the physical locations, brands, platforms, communities, IP, rights, machinery etc. These are assets that can be readily owned, controlled, valued and sold. But they are not the source of competitive strength in your business and their value is superficial, at best.
There was a person who founded the business, who identified the perfect locations, negotiated the leases, who imagined, designed and created the machinery, product, brand, platform or community that allows you to compete effectively today. There is also one or more individuals in your business who continues to maintain and evolve that ‘asset’ so that it remains relevant to the customers who you seek to serve. These people are the source of your competitiveness.
Without the human element in creating, sustaining and evolving your business’s competitiveness, there would be no business. Your business is only competitive because of those who work within and with it and the talent and effort they bring to bear on it
These individuals represent the core of your competitiveness. There is a symbiotic relationship that exists that must be nurtured between leadership and the employees if that competitiveness is to grow.
This is a partnership dependent upon trust.Trust for today and tomorrow. An enduring trust. Not trust for convenience. Any business premised upon a profit-first motive is doomed to breach this trust as, ultimately, they can only see employees as a cost centre to be controlled and minimised.
A business that sees their people as the core of their competitiveness fundamentally changes the way in which it engages with them and the relationship it builds. The building of this relationship requires worthy leadership.
As this relationship is built, you begin to view your team as humans and look to unlock their potential.
Profit Is An Outcome
The one thing that all business leaders should trust in, is that profit is an outcome. They should understand that focusing on profit is not necessarily going to deliver more profit.
The greatest fallacy of our time is that businesses exist to profit. Make profit your motive and you will spend every day solving problems, fighting fires and listening to everyone else’s complaints. A profit-first motive feeds self-interest, politics, and short-termism. It saps the competitive strength out of any business. Yes, of course, you must make a profit to grow your business and be sustainable. But it mustn’t be your reason for being in business, it drives the wrong imperatives when it comes to competitiveness.
Understand how to make your business competitively fit and profit will be a natural outcome, and all the problems that a profit-first motive creates will disappear.
Businesses are made to compete. They compete around the value they are able to deliver to their customers by achieving a relentless focus on their customers.
Compete As A Motive
Create a motive of being competitively fit in your business and trust will naturally flourish. Being competitively fit requires that you recognise and work the competitive engine that exists in your business. This engine reflects the elements at play in your business that set the floor and ceiling to your competitiveness and, therefore, the floor and ceiling to your profitability.
If your motive as a business is to compete to your greatest potential, then:
- There exists a relentless focus on your customers, their needs and delivering the greatest value possible.
- You recognise that your people are the source of your competitiveness and you look to their human potential for growth.
- Your leaders are worthy and place their self-interest last, if at all.
Your customers trust you, your people trust you, your leadership team trust you, you have underpinned your performance, lifting it to an entirely new level, and profits are better than ever. Business success starts with trust.
An entirely new level of performance.
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All the best in the success of your business,