Building Trust in Business

The key role of Sustainability Manager

In a transparent, globalized world, the challenge for business is to meet shifting expectations of the general public, suppliers and customers regarding societal outcomes and value creation. The sustainability manager plays a key role in building trust and involvement of suppliers and customers by engaging them on the basis of Intentional Trust. Insufficient focus to achieve this in a credible way will lead to irrelevance and disputed existence of (the) business.

Organic as Brand – Have you talked to the shop owner as to what he/she understands this to be?

Recently, we had two good friends over for dinner and, you know how it goes, at any given time the ‘state of the world’ is the inevitable topic of conversation. Effortlessly we were grazing through the banking crisis (WW since 2008), the horsemeat scandal (EU 2013), the melamine ‘contamination’ of milk powder (China since 2012), and of course my personal favorites, the degradation of natural ecosystems and the problems around plastic pollution of our oceans.

When I reflected on this animated discussion the next day, it occurred to me that there seems to be a general feeling of impatience. Worse, there seems to be a lack of credibility and confidence in the ability of governments and companies to address these unexpected and undesirable outcomes of our society. The general public increasingly understands the impact of their personal choices in consumption on people and ecosystems close-by and elsewhere in the world. The dissemination of information and knowledge through the internet provides convincing arguments for action. However, governments bicker over positions of power, and companies are reluctant to act under pressure of shareholder value and relentless global competition.

Trust seems to be something we have ‘too little’ of, but in general it is no exaggeration to say that trust makes our society run smoothly. Trust is relevant on a personal, relational level and at the level of outcomes.

On a personal, relational level, trust is about whether a person is seen as someone who has the right values, motives and intentions. Let’s call this Intentional Trust. In other words ”is this is a trustworthy person?”. Here, trust is not necessarily about the outcome, but about personal compatibility, intention and goal alignment.

Trust in terms of outcomes, or System Trust, is about the (reasonable) belief that a taxi driver takes you from A to B without robbing you, that traffic lights work, that the ATM in will dispense money correctly, and that for example the food you buy at the grocery store is safe and delicious. This form of trust is based on a belief that ”impersonal systems and actors” generate expected outcomes. This type of trust creates a sense of predictability, stability and security, and an understanding of how society ‘works’. This also means that differences in social and cultural context may result in different levels of trust and expected outcomes. System Trust basically answers the question: ”does ‘the system’ produce the outcome that I expect? ”.

We are witnessing a weakened System Trust as a result of changing expected outcomes and values, and societal structures that seem unable to sufficiently support these in a rapidly changing, globalized world. In response, a growing general public clusters within networks of action based on shared goals, commitment and personal Intentional Trust. A reduced willingness of the public to rely on impersonal structures does not mean that System Trust is (becoming) irrelevant. Cooperative networks based on Intentional Trust, however, will increasingly support these in order to generate sustainable outcomes.

A number of societal trends contribute to this development. First, the various crises have led to a significant change in the expectations of society itself. The outcomes of these crises caused a rock solid societal belief of ‘infinite economic growth and material well-being’ to start shifting towards the realization that ‘we’ are on an unsustainable path of development. A growing part of the general public is in search for sustainable values and expectations about outcomes in accordance with the principles of sustainable development. These principles are based on a balanced consideration of economic, environmental and socio-cultural interests.

Christine Lagarde[1], managing director of the IMF, mentions the emergence of a new generation ”driven by urgency, democracy and global reach of social media”. In a “world that is flatter, more closely-knit, more interconnected than ever before in history”, the value set of this new generation includes ‘openness and collaboration, inclusion and fairness, and accountability and transparency’ (also review ‘PATIO’[2]).

A second, perhaps more important, trend is the increased recognition that the ‘societal structures’ do not seem able to keep up with a global context of rapid change and innovation, and support new value patterns and sustainable outcomes.

Which level of Balance Sheet leverage still serves the interest of society?

System Trust is further eroded by the perceived inability of some companies to ensure ethical behavior (eg banks) or, for example, to ensure food safety due to their highly complex and impersonal supply chains (eg. the meat industry). The report “Engaging Consumer ‘s Tomorrow” by the World Economic Forum and Accenture[3] concludes that 66 % of U.S. consumers do not trust corporate green claims, because they are seen as ‘marketing talk’. ‘Don’t worry, research has found no evidence that the ingestion of plastic by fish is bad for the fish or for humans who eat the fish’, is the message of some. No evidence of danger interpreted as no danger. Not a very scientific, nor a very trustworthy claim, but it sells products. In the transparent, connected world in which we now live, we can wait for an exception that requires explanation.

A final trend, as a result, is the public skepticism about the ‘global liberal market’ as panacea and democratic institutions that claim ‘to represent the public interest’. The availability of information coupled with the realization that impersonal societal structures are not sufficient in supporting sustainable outcomes, pushes the individual citizen increasingly from a role of ‘passive consumer‘ in a role of ‘active participant’.

This ‘activist’ citizen is organized within recognizable ‘networks of Intentional Trust’ in search for real impact. These, mostly local, networks are characterized by a common goal, cooperation and compatibility to get things moving. Examples include the rise of the ‘DO – Democracy’[4] in Dutch urban areas and the emerging concept of collaborative consumerism.

So, what can business and individual organizations do to move with these societal trends and not lose their relevance? First of all, of course, investing in the societal structures themselves can strengthen System Trust. The question, though, is whether more regulations, more controls, more laws, tougher penalties and more protocolisation will be effective in an increasingly complex and rapidly changing globalized world. A companies’ interaction with suppliers and customers from a position of risk mitigation through a ‘straitjacket’ of protocols, contracts and laws stifles creative, innovative and sustainable cooperation. Precisely the kind of cooperation needed to face up to the challenges facing society and business today.

Companies that truly embrace the new societal reality, and commit to building Intentional Trust have a more promising approach. Cooperation combined with a refocus of the business model (the outcomes) towards the expectations of the community it serves, enables the organization to build trust and generate expected sustainable outcomes. Eric Trist[5] highlights the need for cooperation by noting: ”we act as systems in creating large-scale problems, but we act as individuals in an attempt to solve them”. The systemic nature of the challenges facing our society mean that effective solutions will also be systemic in nature.

In a recent McKinsey[6] study suggests (rightly so) that ‘traditional’ Corporate Social Responsibility (CSR) programs will not be successful in building trust. Instead, traditional CSR programs actually further undermines the credibility of the core activities of the organization.

A similar argument by the Kirkman Company[7] points out the need for CSR and the sustainability manager to shift attention from peripheral and incremental organizational improvement to the core activities of an organization. Moving CSR out off the headquarters, and embedding it in the core business itself can generate true value, trust and credibility. CSR, in other words, really does have potential beyond a glossy annual CSR report and some (albeit important) social initiatives.

The work of the sustainability manager should revolve around two questions. The first has already been mentioned above and focuses on the core activities of the organization. Why does our organization exist, what is our purpose and intention, and which sustainable outcomes can our business model generate? Secondly, and importantly, it is crucial to take a systemic approach in generating these outcomes. Who are the most important (external) stakeholders in the community that the organization serves? What are their values and expectations about sustainable outcomes, and how we can work together in taking advantage of opportunities that match these expectations? Trivisi[8] calls this ”business with a wide angle lens”.

Examples of inspiring new business models can be found everywhere. Patagonia Outdoor Wear[9], for example, launched the ”Common Threads Partnership”, the ‘promise’ in which the company and its customers promise to work together to ‘reduce, reuse, repair, recycle and rethink’. An interesting first step in recognizing that the selling/buying ‘more’ products is not the answer and that ‘behavior’ and ‘intention’ (also by the customer!) are fundamental in generating sustainable outcomes. Desso[10] has introduced new leasing products, where Desso retains ownership of carpeting and assumes responsibility for recycling and reusing the materials in new carpeting. Closing the product chain has led Desso to develop carpeting that can be recycled up to 100 % according to Cradle-to-Cradle principles.

Patagonia and Desso are two examples of how companies have designed a process of cooperation with their stakeholders. The goal is to generate sustainable systemic outcomes (from purchasing to use and recycling) and to build credibility and Intentional Trust.

Establishing authentic cooperation on the basis of Intentional Trust begins with the organization itself. Involving an external stakeholder community places different demands on the organization and its employees. Preparing the organization is the basis for successfully building credibility and trust. Sometimes this will mean a real culture change in the organization, often an investment in training and development of employees, and a focus on attracting the right people. A real 180-degree with respect to the current cheap, cheaper, cheapest trend.

Made on the spot, but how trusted or enabled is the person making the taco to comment about the freshness and origin of the produce?

Building trust and commitment externally means building trust and commitment internally. Depending on the organization, this is done step by step. A number of effective tools are available to support the process of engaging and activating employees by actually doing, rather than just training. Learning by doing, one step at a time, in order to cultivate the right organizational dynamic for building trust.

A second step would then be to set up partnerships with external stakeholders. Authentic collaboration is taking small and large steps towards sustainable outcomes in open dialogue and accepting the uncertainty that goes with it. For organizations vulnerability, transparency and real intent are true builders of Intentional Trust.

The organization can set-up this external cooperation themselves or have them managed and moderated by an independent third party. This can be either in a periodical face-to-face setting or by tapping into one of the available on-line platforms, with individuals (professionals, mothers, neighbors, critical customers, suppliers and sometimes all together in one person) aligned towards generating sustainable outcomes.

“Building Trust” is about authentic cooperation based on openness, vulnerability and intention. Vulnerability here is not a weakness but a strength. ”Vulnerability is taking emotional risk, transparent and uncertain. It is the birthplace of innovation, creativity and change.” Building Trust needs to become part of the DNA of an organization, it’s business model, and the people working in it. It is the starting point for your day-to-day activities, not a ‘project’ on top of your already busy schedule. Building Trust is done one step at a time.

Generating sustainable outcomes requires us, society, business, you and me, to start moving together. The alternative, no movement (and no progress) on the major challenges that lie ahead, is undesirable.

Peter de Ruijter

Sustainable Development Engineer @ design2sustain