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Businesses put an awful lot of effort into meeting the diverse needs of their stakeholders — customers, investors, employees, and society at large. But they’re

by dkarl 7y ago

Businesses put an awful lot of effort into meeting the diverse needs of their stakeholders — customers, investors, employees, and society at large. But they’re not paying enough attention to one ingredient that’s crucial to productive relationships with those stakeholders: trust. Wow. This slime was almost enough to put me right off reading the rest of the article. It's transparently about putting the "needs" (greed) of investors and shareholders above the "needs" (privacy, safety, etc.) of customers, but let's pretend we're doing a great job for everybody and the only thing that has gone awry is a subjective feeling in the minds of people who are bothered by our actions. Even after reading the rest of the article, I think maybe the opening sentence should have put me off reading it, because despite all the right things being said about betrayal of trust and a puppy in an overhead storage bin, you're still reading it all in the context of an opening sentence that said, "Don't worry, you're reading the Harvard Business Review, we know you're a good person and doing a great job and you shouldn't really have to bother with this."

MereInterest 7y ago
Agreed, and I got the same feeling right from the title. This is not a trust crisis. This is a trustworthiness crisis.
- iNate2000 7y ago
  Didn't the article repeatedly advise that the best way to earn trust was to do the right thing?
ssivark 7y ago
> Betrayals of trust have major financial consequences. LOL at the tone-deafness of the article. Why would/should people trust a bureaucracy that tries to put profit above people? The other funny thing is whether readers trust advice from B-school professors. Arguably, a lot of the current ails of modern business (including the public's lack of trust in them) result from following wisdom professed by B-school faculty in MBA courses. > So our need to trust and be trusted has a very real economic impact. More than that, it deeply affects the fabric of society. If we can’t trust other people, we’ll avoid interacting with them, which will make it hard to build anything, solve problems, or innovate. They've got the priority order backwards.
- nradov 7y ago
  Have you actually attended MBA courses? That's not what was taught in mine.
  - ssivark 7y ago
    I've attended several lectures & discussions, and read a few standard recommended books (by no means am I claiming thoroughness). Though my comment was a touch flippant and used a broad brush, I was basically paraphrasing what I've heard from Clay Christensen and Rebecca Henderson (both HBS faculty) on why large organizations make certain typical mistakes, derived from contemporary wisdom (also taught in B-schools).
- AnimalMuppet 7y ago
  Maybe they're trying for a different audience. If you're one of the greedy slimeballs, finding out that being trustworthy rather than a slimeball can pay might change you a bit. At least, it might change your external behavior in a positive direction.
dredmorbius 7y ago
What the article -- one of a five-part series -- brings to the discussion are a few points I find useful. And applicable to the tech and startup scene generally. There's a definition offered of what trust is. Not quite the same one I'd use, but a useful touch point. (My definition would emphasize belief extended in the absence of firm knowledge, and hence risk. I find etymology illuminating: https://www.etymonline.com/word/trust#etymonline_v_17902 https://www.etymonline.com/word/trust#etymonline_v_17902 ) There is the multidemensional nature of trust relations among business stakeholders, and the inherent conflicts among these. Several comments here are focusing negatively on one interpretation of this part of the message, missing other aspects. Yes, I do think the balance has swung too far, but considering why and what to do might be useful. I think a key point is actually that there are not shortcuts to acquiring trust, or to regaining it when squandared, and high costs to trust-mining. There are numerous references and case studies. The Economist article looking at eight cases of business trust betrayals leading to (despite claims to the contrary in comments) very measurable outcomes, includinga long-termreduction in business valuation by a third, to the tune of $300 billion. https://www.economist.com/business/2018/03/28/getting-a-handle-on-a-scandal https://www.economist.com/business/2018/03/28/getting-a-hand... Several of the mentioned cases are tech companies, and everybody's favourite Blue Social Network is mentioned, as are Uber and Equifax, among others. There's the tendency of some businesses to attempt to mine trust, essentially attempting a risk arbitrage, particularly using my definition of trust. This generally ends poorly And there area few examples given of how trust can be regained -- the J&J response to a third party's exploiting their product to poison numerous people (killing seven), Honeywell and Michelin dealing with recession (or profit) and layoffs, and Recruit Holdings directly addressing corruption. Not cheap or easy or fast (pick ... none), but ultimately effective. The biggest omission here is what the benefit of trust is: a tremendous amount of efficienct throgh goodwill. David Gerard made this point, regarding Bitcoin, in a 2017 FT interview: "Decentralisation is the paramount feature in bitcoin, but it turns out that that's a bad idea that's really, really expensive, because it turns out that a tiny bit of trust saves you a fortune." https://m.soundcloud.com/user-544122300/gerardpod https://m.soundcloud.com/user-544122300/gerardpod Going back further in history, John Stuart Mill observed in 1848 that: "There are countries in Europe . . . where the most serious impediment to conducting business concerns on a large scale, is the rarity of persons who are supposed fit to be trusted with the receipt and expenditure of large sums of money". https://archive.org/details/in.ernet.dli.2015.216033/page/n153 https://archive.org/details/in.ernet.dli.2015.216033/page/n1... The preceding quote and other observations at Naked Capitalism: https://www.nakedcapitalism.com/2012/05/george-washington-lack-of-trust-caused-by-institutional-corruption-is-killing-the-economy.html https://www.nakedcapitalism.com/2012/05/george-washington-la...
IOT_Apprentice 7y ago
Perhaps listening to the authors might provide more clarity: https://www.marketplace.org/2019/07/25/scandals-apologies-and-trust-issues-the-aftermath-of-a-corporate-crisis/ https://www.marketplace.org/2019/07/25/scandals-apologies-an...
- dredmorbius 7y ago
  My original source for this, as it happens.

by dkarl 7y ago

MereInterest 7y ago

Agreed, and I got the same feeling right from the title. This is not a trust crisis. This is a trustworthiness crisis.

iNate2000 7y ago
Didn't the article repeatedly advise that the best way to earn trust was to do the right thing?

ssivark 7y ago

> Betrayals of trust have major financial consequences. LOL at the tone-deafness of the article. Why would/should people trust a bureaucracy that tries to put profit above people? The other funny thing is whether readers trust advice from B-school professors. Arguably, a lot of the current ails of modern business (including the public's lack of trust in them) result from following wisdom professed by B-school faculty in MBA courses. > So our need to trust and be trusted has a very real economic impact. More than that, it deeply affects the fabric of society. If we can’t trust other people, we’ll avoid interacting with them, which will make it hard to build anything, solve problems, or innovate. They've got the priority order backwards.

nradov 7y ago
Have you actually attended MBA courses? That's not what was taught in mine.
- ssivark 7y ago
  I've attended several lectures & discussions, and read a few standard recommended books (by no means am I claiming thoroughness). Though my comment was a touch flippant and used a broad brush, I was basically paraphrasing what I've heard from Clay Christensen and Rebecca Henderson (both HBS faculty) on why large organizations make certain typical mistakes, derived from contemporary wisdom (also taught in B-schools).
AnimalMuppet 7y ago
Maybe they're trying for a different audience. If you're one of the greedy slimeballs, finding out that being trustworthy rather than a slimeball can pay might change you a bit. At least, it might change your external behavior in a positive direction.

dredmorbius 7y ago

What the article -- one of a five-part series -- brings to the discussion are a few points I find useful. And applicable to the tech and startup scene generally. There's a definition offered of what trust is. Not quite the same one I'd use, but a useful touch point. (My definition would emphasize belief extended in the absence of firm knowledge, and hence risk. I find etymology illuminating: https://www.etymonline.com/word/trust#etymonline_v_17902 https://www.etymonline.com/word/trust#etymonline_v_17902 ) There is the multidemensional nature of trust relations among business stakeholders, and the inherent conflicts among these. Several comments here are focusing negatively on one interpretation of this part of the message, missing other aspects. Yes, I do think the balance has swung too far, but considering why and what to do might be useful. I think a key point is actually that there are not shortcuts to acquiring trust, or to regaining it when squandared, and high costs to trust-mining. There are numerous references and case studies. The Economist article looking at eight cases of business trust betrayals leading to (despite claims to the contrary in comments) very measurable outcomes, includinga long-termreduction in business valuation by a third, to the tune of $300 billion. https://www.economist.com/business/2018/03/28/getting-a-handle-on-a-scandal https://www.economist.com/business/2018/03/28/getting-a-hand... Several of the mentioned cases are tech companies, and everybody's favourite Blue Social Network is mentioned, as are Uber and Equifax, among others. There's the tendency of some businesses to attempt to mine trust, essentially attempting a risk arbitrage, particularly using my definition of trust. This generally ends poorly And there area few examples given of how trust can be regained -- the J&J response to a third party's exploiting their product to poison numerous people (killing seven), Honeywell and Michelin dealing with recession (or profit) and layoffs, and Recruit Holdings directly addressing corruption. Not cheap or easy or fast (pick ... none), but ultimately effective. The biggest omission here is what the benefit of trust is: a tremendous amount of efficienct throgh goodwill. David Gerard made this point, regarding Bitcoin, in a 2017 FT interview: "Decentralisation is the paramount feature in bitcoin, but it turns out that that's a bad idea that's really, really expensive, because it turns out that a tiny bit of trust saves you a fortune." https://m.soundcloud.com/user-544122300/gerardpod https://m.soundcloud.com/user-544122300/gerardpod Going back further in history, John Stuart Mill observed in 1848 that: "There are countries in Europe . . . where the most serious impediment to conducting business concerns on a large scale, is the rarity of persons who are supposed fit to be trusted with the receipt and expenditure of large sums of money". https://archive.org/details/in.ernet.dli.2015.216033/page/n153 https://archive.org/details/in.ernet.dli.2015.216033/page/n1... The preceding quote and other observations at Naked Capitalism: https://www.nakedcapitalism.com/2012/05/george-washington-lack-of-trust-caused-by-institutional-corruption-is-killing-the-economy.html https://www.nakedcapitalism.com/2012/05/george-washington-la...

IOT_Apprentice 7y ago

Perhaps listening to the authors might provide more clarity: https://www.marketplace.org/2019/07/25/scandals-apologies-and-trust-issues-the-aftermath-of-a-corporate-crisis/ https://www.marketplace.org/2019/07/25/scandals-apologies-an...

dredmorbius 7y ago
My original source for this, as it happens.