Rebalance inequalities to build the trust you need to win in ecosystems

 

The situation: Employees have been taken for granted for too long. Rampant and widening pay inequality between those at the top and those in the ranks is just one measure of an unequal world spiralling out of balance. CEO compensation rose 1,322% between 1978 and 2020. Typical worker pay? 18% (Source: The Economic Policy Institute (EPI). The pandemic – and the resulting Great Resignation - coupled with the rapidly emerging business paradigm of HFS OneEcosystem, is creating a perfect storm ready to sweep talent and partnerships away from those who focus only on shareholder value and towards those prepared to align themselves with a wider group of stakeholder needs; employees, partners, society, and our planet, among them.

Employees have become mercenary – moving from gig to gig for money and perks. The only weapon leaders have to resist with is more money and more perks. That’s a sticking plaster of a solution that lasts only until the next better offer.  It does not resolve the worst attrition rates many have seen in our lifetimes – and it never will while you make the cost to change so low.

Stand for something to believe in to earn loyalty beyond the paycheck

To prove worthy of loyalty beyond the paycheck, you must set out a purpose that partners and employees can believe in. Fail to deliver on that purpose and your rivals will scoop up your best talent with nothing more than a bag of gold and flexible working.

Nine in 10 leaders realize the need to reposition their organization to unleash people in the post-Covid world (with 50% boosting talent development spend, and 48% retraining managers and leaders (source, HFS Research, 2021, sample 400 Global 2000 enterprises). Just as critical is the realization that in OneEcosystem, the impact we make reaches way beyond the boundaries of our own organization. In 2021 HFS Research found that among 158 C-level executives in Global 2000 enterprises, 9 out of 10 predicted ecosystems would be even more critical in the post-COVID-19 world.

Establishing a purpose will prove the difference between success and failure in the emerging HFS OneEcosystem. Here success relies on businesses building long-term relationships of trust and mutual benefit in networks of stakeholders.

Purpose attracts customers and builds stakeholder networks of trust

Purpose is just as important in attracting and retaining customers. Accenture found 62% of consumers want companies to take a stand on issues that they are passionate about, (Source: Accenture).

Fortune found 64% of consumers say a company’s primary purpose should be to make the world a better place (Fortune, 2019). Not only does doing the right thing attract consumers, employees, and partners, it also convinces them to put their money where their hearts are. US consumers are more likely to be loyal (83%) to brands that lead with purpose. And 72% say they feel it is more important than ever to buy from companies that reflect their values. (Cone/Porter Novelli 2019)

Grow talent pools, and your market – by standing up to tackle inequality

Purpose isn't a mission statement on a wall, it is lived through actions. You must act now to demonstrate what matters to you. Because the pandemic has exposed the deepening ravine between rich and poor, taking action to tackle inequality has become a prime purpose target with which to attract employees, customers, and partners.

Of course, stakeholders want more than just your alignment with them on inequality.  Sustainability, inclusion, diversity, and philanthropy all matter just as much. So think of this as a start. And since Inequality limits access to education and therefore the size of the talent pool you can draw on – as well as constraining market size, it would seem a worthy win-win place from which to start.

Brutal inequality got worse during the pandemic

The pandemic has thrown the reality of brutal inequality into sharp relief. During the first two years of the pandemic, Charity Oxfam found (January 2022) that the world’s ten richest men (note, all men) more than doubled their nest eggs from $700 billion to $1.5 trillion. Between them, they have six times more than the poorest 3.1 billion people have between them (the global population is currently estimated at 7.9 billion).

In 2020, CEOs of the top 350 firms in the U.S. made $24.2 million, on average. They earn a ratio of 351:1 versus a typical worker. In 1965 that figure was 20:1. This isn’t just a problem of Jeff and Elon’s making. You get to own it, too.

Crazy, and rising pay gaps are not the only route to success

Does it have to be this way to build a successful company? U.S. credit card processing services company Gravity Payments shows there is another path. It raised the company minimum salary to $70k for all 120 employees in 2015 – including the CEO. It has almost doubled in size since, with 90% employee retention.

And when revenues fell 50% almost overnight in the early part of the Covid crisis, staff volunteered to take a pay cut to keep the business afloat. By July 2020 the company was back on an even keel. And boss Dan Price paid back everyone who had sacrificed part of their pay in the interim.

Inequality kills someone every four seconds – and locks out millions more from opportunity, and out of our demand-ravaged talent pools

Disposable income (or its obvious lack) makes a real difference when facing the ravages of inflation. UK average energy bills are going up 54% (BBC, February 3, 2022), food bills are soaring more than 10% (so far). Now food banks are an alarmingly normalized part of day-to-day life for many with 700,000 families using them in 2020 alone (source, The Trussell Trust).

Globally the impact of inequality is real, and it is harsh – particularly among the poorest 3.1 billion. Oxfam says (in its report, Inequality Kills) that while a new billionaire was created every 26 hours since the start of the pandemic, one person every four seconds dies as a result of inequality – lack of access to healthcare, hunger, gender-based violence, and climate breakdown. Many millions more are shut out of opportunities – limiting the talent pool just as the world’s economic recovery faces growth-crippling skills shortages.

Bottom Line: Start to set things right with measures and rewards that prove you care, to reap the benefit of the networks of trust your purpose attracts

Leaders must now make a stand, demonstrating what they and their company stand for, through their actions and through how their performance is both measured and rewarded.

We have to stop rewarding pure bottom-line outcomes as if they come guilt-free. Instead identify measures that better reflect our business’s role in creating a safe and just space for humanity. In doing so you will show the world the purpose you prioritize, attracting those customers, employees, and partners who will form the networks of trust your success in HFS OneEcosystem depends on.

Start with what you can control. To reduce basic wealth inequality within your organization take a lead from the UN Sustainable Development Goals. These suggest that by 2030 income growth of the bottom 40% of the population should be at a higher rate than the ‘national’ average. Substitute ‘company’ for national and make a start today.

Why we should embrace GDPR

The General Data Protection Regulation due to come into force next May should be regarded as the biggest hint yet for companies to reshape themselves for the digital world - aligning with The 10 Principles of Open Business.

Rather than fear at the number of sticking-plasters that need to be applied to support business as usual, forward-thinking companies will be taking the hint; data ownership is no substitute for genuine relationships.

That's the real message of GDPR - stop hoarding data to exploit customers.
In fact it's very difficult to see in a post GDPR-world why any customer would choose to allow a company to retain their data unless (and they have to be transparent about this) their is a genuine and positive partnership defined in their data notices.

Of course companies can (and many should) spend time, trouble and money ensuring compliance by (for example);

• Appointing a Data Protection Officer
• Reviewing each and every business process to ensure data protection is designed in
• Ensuring default privacy settings are set to high at each and every touch point
• Making it crystal clear exactly what data is being stored about whom, for how long and for what purpose - at every relevant interface
• Providing complete data portability - enabling users to withdraw access to all of their data and take it with them, at any point they choose,
• Devising Data Protection Impact Assessments
• Developing new processes to respond to requests for data and complaints about use
• Preparing to defend your use of logarithms for the decisions they deliver and offers they make or do not make

With up to 4% of last year's global revenue at stake as a sanction, there's much sense in taking this very seriously indeed. However, much of the data storage, privacy and permissions issues become much less onerous if you shift  the nature of your relationship with customers - and in doing so your relationship with their data.

Start to think of data as less a substitute for a relationship - and more an enabler for building one through genuine engagement. 

The start point requires three simple steps:

1. Understand the role of the customer in your business: (Hint - the passive consumer no longer exists, if they ever did).

• Where are the benefits in partnering; how far into the centre of the organisation can customers be brought
• How do you score for trust?
• Set a new goal state, roadmap for organisational change and supporting technology architecture

2. Why do you want to know more about your customers - what is driving you to build engagement?

• Is it to build trust?
• Get direct insight?
• Get help in decision making?
• Find savvy co-creators?
• Deliver a better experience, better serving need?

3. Now you should devise a customer data strategy;

• What data could be available to you – what can you learn from customer interactions? 
• What value for third parties and customers could that generate 
• Consider role of Decisioning (NBA)

By now you have a handle on what you want to achieve with customer data and how you are going to 'sell' that to customers in a way they will see as a fair exchange.

And that's a far better place to start from when working towards compliance with GDPR.y 2017

*This is always the case with my writing - but given the legal complexities of the GDPR I want to make it even more clear than usual - these views are mine and mine only and should not be assumed to represent those of my employer.

Could your next vote be your last?

My recent focus on trying to understand the constituent parts of experience (particularly in relationship to the experience of customers) when combined with the impact of the capabilities of both Cognitive Computing and Artificial Intelligence raise challenging questions about the primacy of the self and therefore of liberal democracy.
This starts from the premise that we don't know ourselves particularly well - and therefore we may not be best placed to know what is in our best interests.
And that's built out of the Open Business principle of Trust. Trust is built from the belief that the entity you are dealing with has your best interest at heart (this is what partnership requires, too).
So first - why don't we know ourselves particularly well - and why does that matter. Anyone who has read my articles, the third and fourth dimensions of customer experience will have had a reminder of the work of Daniel Kahneman onwards showing how we make short cuts all the time when making decisions. We recall experience using the Peak-End Rule. We average our low score and our score at the end. We don't aggregate the sum of our experiences.
We have evolved to experience this way to enable us to survive in fast moving environments. It was the most effective way of dealing with the data.
Wouldn't it be better if we could take account of all our experiences when making a decision. Like whether to turn left or right at the next junction.
Google Maps already does a better job of this. It (potentially) takes the sum of all the experiences of all the drivers on the road and plots your routes in the best interests of all. It does this very even-handedly. There's no way to upgrade so that everyone else gets sent out of your way, for example.
It makes better decisions for us than we do. In Google we trust.
Ok, so why not let Google select our partners? By storing and being able to access and analyse all of our experiences (at least those shared with Google - which are plentiful enough) Google could claim to know us better than our Narrative Self (the one that makes decisions based on recalling experience in its short-cutting Peak-End Rule way. It also has everyone else's experiences and outcomes to draw upon for its calculation.
Should you marry prospective partner A or B?
Those using dating sites are already handing over much of this cognitive spade work to algorithms. In Google we trust?
And if you want to hand the decision making to the algorithm for the selection of your life partner, why not to cast your vote?
If the algorithm knows your best interests better than you know yourself, why not let it make the right choice for you - uninfluenced by your short-cutting Narrative Self?
En Masse, why bother with voting at all. Are we ready for Government by Algorithm?
Humans have been, for a long time, the best things we had available to gather and intepret data.
Control (via Trust) has tended to concentrate with those who both have access to and interpret data for practical benefit. Priests could interpret the word of God to give you temporal guidance. Astrologers could read the starts to tell you when best to plant your crop. As economies grew more complex being able to read helped you make better decisions, bureaucracies grew, measuring, recording, predicting data about fields and roads and cities and people and incomes and food production and disease and health and threats and technologies and the instruments of Government grew around these data warehouses.
Now, to predict the complexities of the weather, the markets, the needs of the people, we turn to algorithms. They have become faster and better at interpreting more and more data than the best human agencies.
So why not be Governed by Google? By knowing us better than we know ourselves it can provide for us better than we can choose for ourselves. If only Google cars were on the roads, we would need a fraction of the cars currently produced (most are parked at any one time) and we would all get to where we wanted to go faster, with less pollution.
Give it control of our health and we would all live longer happier lives and our medical care could be delivered at a fraction of the current costs. Take a look at what Google Deepmind is currently engaged with the NHS to deliver for one small segment of improvement the algorithm could deliver.
Give it control of the economy and imagine the potential for supply to meet demand and the wastage that would cut.
This feels really uncomfortably like centralised, command and control economics to those in the liberal tradition.
And it's hard to deny that's very much what it is. But the difference is there is no politburo, no five year plan - no numbers set by politicians. This would be an economy run in the best interests of those engaged in it by a benign dictatorship of an algorithm which genuinely has your best interests at heart. The command and control is the needs and desires of the people.
When the time comes that the algorithm really could do a better job of governing us than our politicians, would you be prepared to make your next vote your last vote?

Voters must learn to trust voters again

Image via A-Z Quotes.com

Trust. Given the seismic societal and geopolitical events of the last year I think it's worth reminding ourselves about Trust.

58% of eligible Americans didn't bother voting. Liberal democracies work on the assumption that the voter knows best. This is built on a basic trust. We have faith that the 'other' has our best interests at heart.

As the world has globalised, the question of who should vote on what issues arises. If you take a global perspective why should a nation vote alone on whether or not it leaves (for sake of argument) The European Union. The impact of the decision made by voters goes far beyond the impact on themselves. Do they have the right, within one nation, to vote for things that harm others?
Climate change, accords and fast-growing heavily polluting nations raise similar concerns - as does the free movement of refugees. People moving from difficulty to plenty has been the story of human expansion over the face of the Earth - until we invented passports and border controls.

Democracy it seems can only work if we share a basic beliefs/traditions/outlooks with most other of your fellow voters. When fellow voters are like us we accept the results - and I reiterate, we do so because we assume they have our interests at heart, too.

When those interests are ignored, we don't accept the results. If their experiences are far removed from my own, if they don't understand how I feel and don't care about the things I hold dear then I'm unlikely to accept the result no matter how 'conclusive'.

Is this what we have seen at play in Brexit and in the election of Donald Trump?
Or is there more that binds the people of the UK and the people of the US than divides them?

To move forward both nations must find a place where voter can trust voter again (this is more important than whether we trust politicians, for whom we all have our crap filters set to stun permanently anyway).

I do believe that trust can be rebuilt - I wrote a book (The 10 Principles of Open Business) which lays out how we can do it in brands and business and the principles are equally applicable to our institutions and way of life.

In the main we do share basic beliefs and traditions. If there are differences it is in outlook. Some see the post-globalised, digitised world through fearful eyes. Others with optimism.

If we connect more, share more, enter more transparent discourse, act ,more as what we are - partners in civil society - we can help rebuild trust. In so doing we can enable more people to identify and access the benefits of the connected world so many of us have enjoyed.

If we cannot we will break down (and self-organise ourselves) into the bubbles our Facebook timelines seem intent on generating.

Think for a moment how important trust is in winning this battle, in rebuilding the partnership we aim to have with each other in civil society -
The following are excerpts from The 10 Principles of Open Business.(Palgrave-Macmillan 2014).

"Without trust there can be no relationships of any value. Without relationships there can be no organizations, no customers, no believers, no advocates, no future. Google Executive Chairman Eric Schmidt went as far as to say in his 2009 University of Pennsylvania Commencement Address that: “In a networked world, trust is the most important currency.” Every politician, every newspaper editor, every CEO, every brand manager, every one of us knows it is essential. It is what ties customers to brands, families to each other, organizations and societies together. It is a very human trait and one which has given us an evolutionary advantage defined at its simplest as: “I’ll scratch your back if you’ll scratch mine.” 

Evidence from neuroscience (e.g., “The Neurobiology of Trust” by Paul J Zak in Scientific American, 2008) suggests we get chemical feel-good rushes to reward us when we trust and are trusted, and that there are large portions of the brain developed specifically to deal with its complexities. Being able to trust our neighbor allowed us to build civilizations. We’ve evolved to demand it. To work closely with people, requires it. Partnership, the paradigm of Open Business, demands it. And when trust diminishes we are in crisis.

Trust,... is a measure of the belief in the honesty, fairness, or benevolence of another party. Build this kind of reciprocal trust and your partners are more likely to forgive your failures of competence; they will cut you slack if they trust that you are trying to do your best for them and being honest when things go wrong.  

t.

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VW will bounce back stronger for learning the lesson of Open Business

It's all too easy to join in with the doom and gloom brigade about VW. They have done very naughty things. And they have been caught doing them.
But let's have a little context here. The auto industry has long been accused of tweaking its test performance figures in its favour.
It is not unheard of for motorcycles to be tested with their wing mirrors off and tyres pumped up to super-high pressures to reduce drag, for example.
The car industry is no different with much hemming and hawing from both public and press over their claimed mpg figures for decades. We haven't trusted those figures for a long time. VW's re-calibrated version of the emissions truth is arguably just further along the same continuum.
Even so, all of a sudden VW, and much of the rest of the car industry (don't forget GM and Toyota are both currently paying hefty fines for misleading the public, according to Automotive News Europe and BMW's share price is plummeting on concerns about their emissions) have a mountain to climb to rebuild trust.

OPEN BUSINESS

Lack of trust is a drag on performance of the intangibles of a business: So your trust in the VW brand will have reduced. That will have some impact on your car choices. But so will how much you desire their designs, mechanical reliability and performance, build quality, drive quality, comfort, style, the sound the doors make, the cache of the badge etc etc. In other words whether or not you trust the absolute veracity of their performance figures is just one parameter and, when the dust settles, perhaps a far less important one than the feeling you get from driving it. Or simply how much you want that car.
So my guess is VW, et al, will bounce back. Nose bloodied, bowed and ready to be better, more open businesses for their experience.
They will be reborn as organisations for whom trust IS more important in future and in which the governance is aligned with building trust.

OPEN TESTING

For example, if they had performed their testing out in the open in the first place they would not be in the trouble they are today.
In the connected car future they will be able to aggregate real-world results from real world users results, in real time, and share those results with all drivers and to anyone else who requires them via open data.
All of this is very do-able with the technologies of the connected car.
Combine this with a new regime of open governance ensuring accurate measurement, and VW has the opportunity to respond and leap ahead of their rivals for trust.

Doing The Right Thing

As previously discussed on this blog and in The 10 Principles of Open Business, the value of trust to a business cannot be over-stated.

But does that mean you are doing the right thing?

Trust is the core component of the value of any brand, institution or organisation.

And - as we make clear in The 10 Principles - we don't mean the 'we trust you to deliver' kind of trust that Ryanair used to rely on, we mean the 'we believe you have our best interests at heart' kind its more recent marketing has been tilted toward (yes, even Ryanair has grasped the essential difference and how important that has become to their sustained success).

What this all boils down to is a shift in staff behaviour from Jobsworth to Doing The Right Thing.

When the horse-meat scandal hit the European food-chain, Tesco's senior team didn't stop to ask themselves what they could get away with, or to investigate which suppliers they could point the blame at and pass the buck to, or spend weeks with the legal department honing what they would say to the press and on social media. No. Instead - as CMO at the time Matt Atkinson tells us in The 10 Principles - they simply went about doing the right thing; telling the truth as they knew it, opening up to provide transparency, giving money back without a quibble - acting as if they had the best interests of their customers at heart.

That's really at the guts of my complaint about Hargreaves-Lansdown published yesterday. They are taking a Jobsworth attitude, hiding behind regulations, letters of the law.

Today we expect something different: We expect them to Do The Right Thing.

I don't blame the front line staff I have had to interact with for this - it is an organisational stance and that comes from the top.

Tesco shifted theirs, thanks in no small part to ambitions to become an Open Business. The rebuilding of trust was (and remains) essential to that business.

And if you want me to believe you have my best interests at heart you had best Do The Right Thing rather than what a set of terms and conditions protect you for. When The Computer Says No but your heart and head tell you Yes, it's wise to consider it's the computer that may be wrong...

Contracts and regulations rarely cover every circumstance, every nuance. The relationship between customer and business, or business and supplier is built on trust. The moment you have to refer to the terms and conditions, the contract, the relationship is essentially at an end - you no longer trust each other or believe the other party has your best interest at heart.

How do you make Doing The Right Thing endemic in your org? It's all about permission. I rather like what Avis has done in the US (again referred to in my book) where every member of staff (every member of staff, not just folk up the tree or behind the management desk) is empowered to give up to a set amount in dollar terms to resolve a customer's problems as they see fit, right there and then.

That makes the ability to Do The Right Thing a genuine possibility to all.

So ask yourself - in your organisation are the teams being encouraged to Do The Right Thing or keep the Jobsworth hat on? It could make all the difference to how long folk are prepared to keep trading with you.

Trust should be priority 1 in digital transformation

Many companies are waking up to how far behind they are on the Digital Maturity scale referred to in the recent Copgnizant sponsored paper by Brian Solis.

But it seems to me too few are seeing their efforts toward digital transformation as more than a way in which they get to do more/faster to their customers. In my work on Open Business I have always argued that the single biggest win of digital transformation for organisations comes from the shift in relationship it enables.

Yes there is great efficiency and effectiveness to be had from learning more about your customers' behaviour, their needs and their implicit and explicit desires. But it's unlikely you'll generate a meaningful relationship of trust purely by serving needs (think of the difference between helping to fix and then enjoy a family meal, and rushing in and out of McDonald's to grab a bite on the run).

I don't argue that servicing need (and making it as easy as possible) isn't of extremely high value. I do argue that it is the tip of the iceberg that can be released through the shift in relationship with the consumer; from customer to partner. Trust, sense of ownership, shared purpose - all drive loyalty and increase spend. One regional co-operative I worked with boasted 50% membership among its customers. They accounted for 70% of the spend.

The transparency and free communication digital delivers offers the promise of making all organisations accountable to their customers in the kind of way member organisations have always enjoyed.

Trust accounts for the vast majority of the value of any brand.
It therefore remains a mystery to me that building trust isn't always top of the digital transformation agenda.

Trust has greatest value where choice is highest and price sensitivity lowest

Trust - the output of the 10 Principles of Open Business - is essential for success in today's open economy.
But we should note that its value varies across market segments. Trust will attract the right staff, keep the organisation honest and true to its beliefs and inspire people to perform at their best. But its impact on consumer action varies depending on choice/ease of switching and price sensitivity.
This may explain why even when we lose trust in something we don't always stop using it.
The graph included here illustrates my plotting of some market segments and institutions which shows us which should put the greatest efforts into building trust for the purpose of impacting consumer behaviour.

Where it's very difficult to switch (ie your daily commute by train) trust has some value but building it won't encourage more commuters to use a rail company. They just may feel a little better about the next price hike, a little safer while on board.
While there is no option when it comes to your police service you could argue there is little requirement to build trust to change user behaviour (though trusting the service does of course encourage people to be more open with it, even if we can't go and share our intel with an alternative organisation).
The key area for trust as an investment in behavioural change seems to be where both the cost of both switching and the price sensitivity is low (the top right quadrant).
Here we find the banks, the media, transport. Most retail vendors would fall here. Topically - politically parties appear a standout. Trust should be everything to them.
My positioning of supermarkets on this grid may explain why - despite the repeated crises of trust in our supermarket giants (even Open Business advocates Tesco) - there hasn't been a mass exodus of customers. Tesco's market share is down less than 2% year on year according to Kantar (Oct 2014). But that's based on spend, not numbers of customers. Customers are less likely to have left Tesco for Aldi or Lidl over issues of trust than they are over issues of price. They have added an Aldi run to their routine Tesco buys, not abandoned it completely.
These positions aren't fixed. IF through Open Business or other investment in building trust (and blockchain is being advocated as one such tool by The 10 Principles Co-author Jamie Burke) organisations can make trust a competitive advantage they can become more resistant to start-ups and new-comers who do not have a trust bank already established.

Give to receive

The 10Principles of Open Business provide a framework for rebuilding the trust so many brands and organisations have thrown away in the over-zealous pursuit of profit/cost.

What we know is when they destroyed the trust they had (through exploited suppliers, one-size-fits-all marketing and anti-customer service) they also destroyed the shareholder value they thought they were creating.

Today’s businesses are waking to the advantages of treating their customers better – of becoming customer-led Open Businesses. They do this because they know without trust their brands have little value.

Those that are most successful at this have recognised something you will find defined in the chapter on Trust in The 10 Principles – that trust is a reciprocal thing. We don’t want trust of the ‘you can trust us to be the cheapest’ kind. We want trust of the ‘we have your best interest at heart’ kind.

To be trusted you have to trust.

Amazon and John Lewis – about the most trusted names in retail these days in the UK – both provide a similar case study when it comes to refunds (an ever more critical part of the retail mix in an increasingly online environment in which distance selling regulations apply to everything bought online in the UK).

Both companies give you your money back. Take John Lewis. I took a six month old leather bag back. The zip had broken and the strap had all but snapped. I had no receipt. But I knew it was a John Lewis bag. I took it back and had the current list price of the bag (£145) zapped straight back on to my credit card.

Trust.

Which I immediately reciprocated. I went straight to the bag department and bought another bag. I know that if I have a similar problem, I’ll get similar treatment in future.

Amazon: Got a problem? They will refund you and THEN ask you to return the item. They trust you. So you trust them.

Both have thought about the problem not from an ‘efficiency’ perspective – but from a customer effectiveness one.

Today you must either offer wow or easy. If you are really good you wow by being easy (Amazon, John Lewis).

You can wow through really low price, or really high quality. Do this and you may get away with not being the easiest in the market to trade with. But if you can’t differentiate yourself significantly through price or quality then easy is where you have to aim – and where you have to win.

I wonder how many high street retailers can really argue they are as easy to trade with as Amazon? They don’t offer higher quality. They rarely offer lower price.

How can they restore the trust and make themselves easier – the first step may be to start trusting their customers more. For many that will require them to know their customers better.

I’ve had a few run-ins with one famous High Street retailer in the last few months. It’s becoming a bit of a running joke in our house. Mrs C laughed after I recounted my latest call with The M&S executive office and said: “They must hate it when they know it’s you,”

I only wish they had the customer systems in place to know my past record when I do contact them. I’d love it if they hated to see me coming. They’d know how much in debit with me they already are and might make an effort not to make things worse.

Sadly, every new issue I have with them is like starting from scratch. 

For M&S watchers - here's my latest complaint. I bought some trousers online. Colour wasn't quite what I was expecting (Less 'neutral' more, pensioner beige). So I returned them to a store. Thinking M&S was the bastion of easy exchange, I took nothing more than my order number with me. That should access everything they have on record about the transaction, I figured.

Nope, in store they can't check your online order number against anything, it seems. Now, instead of trusting their customer and just giving me the money back (as they would have done had they had the receipt) they could only give me a credit voucher. There was nothing in store that day that caught my eye so I took the voucher home to use at my leisure online.

When I did go to buy something online with it I discovered it could ONLY be used in store. In other words a purchase I had made online had been converted into a voucher I could not use online.

I rang and asked for it to be converted to an e-voucher. Computer said no. Even though I have all the reference numbers this could only happen if I sent the voucher back to them first. Funnily enough, if they don't trust me, I'm disinclined to trust them.

So I was left with a useless voucher (as least until the next time I went into one of their stores) instead of the goods I had paid for online.

That is how not to wow, how not to be easy - and how to illustrate the decline of a once great customer service brand...

The two killer apps of 21st Century marketing

Image via  http://www.alchemyofchange.net/

Neither of the two killer apps of marketing in the 21st century is part of most marcomms plans or marketeers skill sets.
How so?

A quick reminder on where I stand on how consumers make choices today:
1. Brand: Makes the promise
2. Marcomms: Brings the promise to life
3. Social Media: Is where we turn for proof of the promise (in the experience of our peers, the Google ZMOT if you will).

This is driven of course by who we trust. If we trusted brands and marcomms we'd accept their promises. Sadly its a rare brand which can command that level of trust today. Mostly we ask each other for the proof. This means of course that much more spend and focus should be on number 3 versus 1 & 2.

It also begs the question: how do you inspire people to publish the good experiences (the proofs of the promise) they have had.
First, of course, you must prove that promise.
Over delivering seems to do the trick. Go beyond the normal and I'm likely to post a positive review or comment.

Our ability to generate “wow” moments worth sharing with peers (reviews included) come down to what we are prepared to GIVE over and above normal service. Primarily the give is great customer service (delivered by a human) or an upgrade of some kind ( a cost).

This is bottom-up proof that the brand has our best interests at heart (the true measure of trust). That's killer app one.

Scaling this is tough and relies on peer-to-peer discovery and pass on. Often this can appear too slow to a brand with a broken connection to its promise they are desperate to fix. They may not have the will or capacity to deliver the small moments of wow which have made google, amazon, spotify etc more trust-worthy than long established rivals. They use your data to deliver things to you in a way that makes us feel they have our best interests at heart. We can rationalise and note that they have a business imperative. But actually, us consumers aren't very rational at all when making decisions. How we feel is most often more powerful than what we know. (Read Mark Earls Herd for a primer on that if you aren't convinced from your own experience).

With what brands can learn from your data, we can deliver the feeling that the brand concerned has our best interests at heart: Top Down - killer app two.

The magic, the wow, is not now in what we are given by way of over delivery of goods or services, but in the surprise and delighting we do by showing we know our customer's needs so well that they feel we really do have their best interests at heart (the foundation of building brand trust in a world of relationship marketing (as discussed in my book The 10 Principles of Open Business).
My guess is that we will continue to need BOTH top down and bottom up.
Trust in the brand can be built at scale via the top down approach, but to deliver the TripAdvisor-topping reviews and publication of peer recommendations we will need to continue to GIVE more than expected, not just fit need exceptionally well.
After all, when was the last time you tweeted about how well Amazon made you a recommendation?

There's more to transparency than telling the truth

There's more to transparency than simply telling the truth.

Let me give you an example. A standard packet of Walkers Quavers you may buy in your local corner shop delivers 109 calories.

However, flip over to the the rear of the same pack and you find some interesting claims about a range of Walkers snacks which all come in at under 99 calories a pack. You'll note Quavers are included in their number.
How can this possibly be?

The answer is far from transparent.

A packet of Quavers from a multipack is just 88 calories actually. Wow. Do they use a different recipe? No, they just make the packs smaller (16.4g in the multipack vs 20.5 in the ordinary one).

Given time and the internet you can find this stuff out. Walkers are making the truth available - but that's not the kind of transparency demanded of Open Business; ie the kind that builds trust between consumer and brand.

There is a sense of dishonesty rather than truth in how this is presented to us. It feels like we are being deliberately given parts of the story when that part is to the benefit of one party (the brand) rather than the mutual benefit of both.

And as we make clear in chapter 10  of The 10 Principles of Open Business (Trust), building trust requires the customers belief that the brand has their best interest at heart.

The Quavers example feels like the brand tells the part of the truth it feels will be of most benefit to it at any one point. A transparent retelling may have the mutlipacks stating: "Smaller snack size - scaled down calories too"!

Transparency (Principle 8 of the 10) requires honesty. Without it we can be reduced to telling only the truth that benefits us.

The social web demands partnership with customers - and a radical rethink on content

We're... seeing a much bigger shift in how people spend their time online. 

People are spending much more time interacting with other people, and much less time consuming content from websites. This shift is not about any one particular social network. It's about people connecting to each other online.

Paul Adams, user research lead for social in the UX team at Google.

That nugget is essential information in telling the story of our shift from trusting brands and branded content, to trusting each other. It is also a revelation in telling the story I am so keen on - that the web is for us to connect with; to enable us to self-organise.

Paul adds, in his presentation  The Real Life Social Network: "The social web is not a fad, and itʼs not going away. Itʼs not an add-on to the web as we know it today. Itʼs a fundamental change, a re-architecture."

This adds to the evidence offered in The 10 Principles of Open Business that rebuilding trust between brand and customer is not the realm of ads or branded content. We are turning to each other to find the truth behind the promises made by content of this kind. Content only has value so far as social media is concerned if it proves the promise the brand is making. If the web is indeed going through a fundamental change to become the social web what that means is that ALL online content must now pass that test.

Tell me what you like, but unless I can discover the truth of your promise from the experience of my peers, I'm not going to believe you. That's our reality. How is that impacting your next web design, your next social media content strategy?

The shift suggests that now all content (that will have any value in building trust, inspiring action, at least) has to be created by people like us.

Companies must think long and hard about this shift. It demands a rethink in the role of content and in your relationship with your customer. There is no mileage in simply telling people what you are. You will have to demonstrate what you are - prove it, giving them the experience of it, which they may choose to publish to their peers.

Organisations will have to be more transparent - more ready to involve customers in open innovation, more ready to share and connect - to collaborate

Customers become partners - not dumb recipients with wallets attached.

This in itself demands a more socially focused approach to CRM than ever before, a more customer-as-partner approach. It must answer how we create, discover, reward and scale advocacy; it must back the customer's judgment when they make referrals; it must understand the difference between Lifetime Value of a customer who couldn't care less about us but has little option but to trade with us and the Customer Referral Value of someone who loves us but - right now, for whatever reason - isn't buying from us; it must understand customer intent as well as map behaviours.

Ultimately it can solve many of these challenges by turning to the same social web that is causing the rethink because there - in our digital footprints - is the reality of our referrals, the clarity of our click-paths, the negative sentiment of our disapproval.

Reading this in total (and it occurs that separating acquisition from retention, loyalty and search cannot help matters) will help us make businesses more able to respond to, learn from and be led by their customers.

By the way - Paul didn't write his presentation about the shift to the social web this week (in fact, he's no longer at Google). He presented it at the Voices That Matter Web Design Conference in San Francisco in June... 2010.

Yes. I know. It probably is about time to act.

Beware the business bots

Image via: http://www.inspirefirst.com/

In the future every business will be digital.

For many that future has already arrived. You know you have arrived in that future when 50.1% or more of your revenue comes via digital. You can probably draw a line on your revenue growth and decline charts to identify the point at which that becomes true for you.

In the future every business will be a technology company. Being digitally, socially connected, always on via the cloud and mobile will be an essential of even the most mom & pop business.

Yes those businesses which require your corporeal presence (those that will congregate in High Streets) may feel this effect later than most, but feel it they will. If I can choose to book a haircut via my mobile vs turn-up and hope, over time even the strongest habits and relationships will be challenged. You can be sure new habits and relationships will more likely be established via the technology route. Old habits die hard - but time kills even the oldest in the end.

So it would be sensible to prepare for your digital and technological future.
But in doing so never lose sight of what will make all this technology work for you - the scalable human relationships it empowers.

Without the human heart of your business - its purpose, your belief, your demonstration of your values through what you do (not what you say) you'll end up with a business which acts like a bot.

In a dark, bleak future there is a world of business bots all following each other and trying to sell to each other based on the faked behaviours each is demonstrating to each other- rather like twitter would become if all the humans left over night.

It's easy to imagine organisations sleep walking into this future - focused on getting technology to do everything for you and for your customer. Bots see and bots do but there is no meaning for them or those they interact with in what they do. Transaction after transaction without meaning.

In the bright, belief-filled future, businesses are using technology to enable and enhance rather than to mechanically do. Here humans are connecting with humans building trust through relationships in which each has the other's best interests at heart. They are partners. They are working together to achieve a shared purpose. They generate meaning.

The role of technology is to reduce the friction in each transaction - whether that be purchasing goods, connecting people with shared purpose, or sharing ideas.  Reduce the transaction cost and you reduce the cost of action.

But we must always be careful to keep the meaning in. Industrialisation took it out. We have the opportunity to rediscover it through the human connectedness the web enables. We can take advantage - or we can build bots.

Edelman trust barometer results align with Open Business approach

Edelman's 2014 Trust barometer survey is out and with it vindication of a key trend we've been observing in Open Business.
The clear majority of respondents to the annual survey (84 percent) believe that business can pursue its self-interest while doing good work for society.

This very much aligns with what we explore in The 10 Principles of Open Business - particularly in the chapters on Purpose and Open Capital. Indeed - The 10 Principles argues that doing good for society offers a competitive advantage in our connected world.

More evidence that 2014 really could be the year of Open Business, perhaps?

From the chapter on Purpose:

There have never been greater drivers for businesses to become Purpose-led.

Apart from anything else, it will reconnect you with the world, re-tying those strands cut loose when CEOs first decided that shareholders mattered more than anyone or anything else.

“It’s a reversal back to the old days,” says Mark (Earls), “when corporations felt part of the world and felt a responsibility to it."

And from the chapter on Open Capital:

Peer-funded partnerships also offer the opportunity to create value beyond the back slap in the boardroom and the bottom line on the balance sheet; value creation which acknowledges resources are finite, that people, communities, societies and ecologies are connected and matter to each other.

And this in itself provides a genuine competitive advantage that the wisest global entrepreneurs are quick to identify. As Sir Richard Branson puts it: “…the boundaries between work and higher purpose are merging into one – where doing good really is good for business.”

In a connected world, where to win is to work together with ever greater numbers of people who care about the same things you do, few are going to sign up to support businesses which are damaging the ecosystem in which they exist – let alone support those organisations with their own money. Open Capital will therefore be a key driver of ‘doing good is good for business’.

• Pre-order The 10 Principles of Open Business now for delivery on launch day - January 28 UK/February 28 US.

Brands can't live on a promise

Performance is essential in social media. Nothing moves in a peer-to-peer environment unless a behaviour is impacted.

No matter what you may say your brand is - through deeply-thought positioning, emotionally charged TV advertising or carefully crafted copy, what your brand actually is, is what other people say it is.

And what other people say it is, is what people experience it is: How it performs and how they say it performs.

Image via cuddlycomments.com

That's the message you'll find in Chapter 10 - Trust, in my forthcoming book (Palgrave-Macmillan, January 2014) -The 10 Principles of Open Business.

It's the same position arrived at by Google and Brian Solis in their work on The Zero Moment of Truth (ZMOT) and - more recently - Brian's Ultimate Moment of Truth (UMOT).

ZMOT asserts we start our path to purchase in our perception of the expression of experience of others in our social circle. We hear good things. We hear bad things. We act accordingly.

Our own research (at The Social Partners) supports the idea that social media (which can almost wholly be defined as the expression of shared experience by our peers and people like us, as viewed from a variety of individual perspectives ) is THE place we turn to for evidence of performance: Advertising makes the promise, social delivers the truth.

Brian's UMOT is a neat expression of a concept I have been applying to my own work in social media strategy:  Building trust through performance at the level of the one-to-one relationship.

Since the brand is what people say it is, having experienced it, how do we encourage people to express their joy? What we do know is that people don't express their meh! So-so performance, mediocrity, blandness - of these we have nothing to report to our peers through social. The technical barrier remains that little bit too high. We don't tweet 'coffee in Starbucks was, you know, ok '. We do tweet 'awesome service in Starbucks today' or 'Starbucks was super sucky this morning'.

We go to the effort to report the out-of-the-ordinary, not (yet) the ordinary.

Brian's response is to encourage expression (reporting the out-of-the-ordinary) we must engage them - by which he means do something to make them love you (and that is most assuredly NOT clicking the Like button or browsing over your centre-out messaging content).

My own work in relationship marketing suggests similar (indeed the whole concept of Open Business shared in The 10 Principles of Open Business is about taking customer engagement to a whole new level by making partners of customers in everything you do).

Engagement, Brian argues, is about emotion.

Again, agreed. And here's the thing to guard against: Social Media is not good at broadcasting emotion - just as it can't broadcast trust.

Emotion resides in the individual and in their interaction with their peers.  Winding up a John Lewis Christmas TV ad and setting it off among your targets won't do the job.

You have to provide the out-of-the-ordinary. You have to build trust in your performance, You have to build the relationships, one person at a time.

This may sound expensive but we are already finding methodologies to track the effectiveness of this over-

delivery, of how far and for how long the emotional impact of feeling a little bit of love resonates.

My belief - one for which I am busy gathering evidence (and there are many anecdotal examples) is that being 'insanely great', as Steve Jobs put it, pays massive dividends.

At the end of the day since the aggregate output of what other people say is what your brand is, then this is where you should be focusing your  brand budget.

All the rest is just a promise.

Thatcher's legacy? Getting away with it is not a strategy

Had the Labour Government that preceded Margaret Thatcher’s first election win had access to accurate data they would never have needed to go cap in hand to the IMF, to devalue the pound and accept swingeing cuts demanded of them for getting the loan. They were operating on a false premise – that the economy was in a far more parlous state than it actually was. This miscalculation changed the way Britain was governed. 

Mrs Thatcher was lucky. She got away with it.

Had a few more Argentine bombs been correctly fused, a few more Exocet missiles supplied, a few less brave men acted a little less heroicly, The US been less generous with its clandestine support, Britain would have slumped to ignoble defeat in The Falklands. It was very touch and go.

Mrs Thatcher was lucky. She got away with it.

Had the technology and the will to access and surface Britain’s biggest ever bag of gold – black gold from the North Sea – not coincided with her Premiership  she would not have been able to tilt the electoral playing field with the massive privatisation share price give-away that the oil funded, or the cut-price transfer of council housing to private ownership that followed.

Many got lucky, cashed in, took the money and ran. And thought they’d got away with it.

But far from her dream of giving more people a stake in a capitalist economy, she’d succeeded only in creating a society ever more fixated on and dominated by consumerism. Mrs T thought we aspired to prudent stewardship through ownership - but what she actually created were the conditions for rampant consumerism.

Still she believed she was right – and kept ploughing on with unpopular cut after unpopular policy because..? She kept on getting away with it.

What did we learn? Belief is important. But in the end it won’t out run the truth.

Getting away with it is not a strategy. Lucky generals don’t always win.

Gather the evidence. Act on the data.

Make a better fit with reality.

I'm a big believer in belief - but never at the cost of reality.

Tesco must trust us if they want us to trust them

Tesco is right to start the communications rolling in the aftermath of Britain's horsemeat-in-beef-products scandal. Emails to every customer (that they have emails for - which is a lot, thanks to Clubcard) about the value of trust, promises made about rigorous testing (the stuff we had trusted they were doing anyway) and a commitment to a new website to share progress and outcomes is all great.

But the more exciting, and both business changing and business winning, idea contained in Tesco's new commitments is in the pledge to 'open up our supply chain'.

This not only brings them the benefits of applying some of the 10 Principles of Open Business, it also goes some way to enabling customers to get closer to the wizard, rather than the curtain - in other words, the source of the brand.

And IF they are wise and consistent in the application of Open Business, if they truly wish to become customer-led, then co-creating the fix to this problem with those for whom it is intended will become second nature.

That's the part I see missing from the Tesco plan right now. It feels like the customer is being treated as a receiver of outcome rather than a key stakeholder in the decision making process. CEO Phillip Clarke has told us what he is doing for us, but he hasn't asked us what we think the solutions are, what we think will rebuild trust.

Getting closer to the source is a critical part of that. Being part of steering how that is done is another.

Tesco must first learn to trust us if it wants us to trust it.

Panel reports from Social Media Week London

Thanks to everyone who attended, tweeted, retweeted, blogged, liveblogged and storified the two panels I sat on in Social Media Week London for LikeMinds last week.

I opened up introducing the Truth & Trust event on Monday morning and closed by joining the Future of Being Social.

Both were very well attended and shared beyond the room.

The Live Blogs are as follows:

• Truth and Trust and Why What You Do Matters in Social Media
• The Future of Being Social.

...and there is a Storify here: http://storify.com/gabriellenyc/truth-and-trust-likeminds-smwldn from the Truth and Trust event.

I'm indebted to Andrew Gerrard of Like Minds for pointing all this out to me.

Related articles

• Truth and Trust in Social Media - report from the SMWLDN panel
• Social Media Week London: Truth, trust and the future of being social
• Social Media Week London #SMWLdn
• Social Media Week London 2012: The Full Story

Can you trust the Trust Barometer?

The Edelman Trust Barometer 2011 is out. Cue a bunch of extrapolations no one should have made.

I'm not having a pop at the fine folks of Edelman who bring us this research each year (many of whom I have a great deal of time and respect for). I am calling on everyone to take a moment to think before they quote, tweet or otherwise pontificate based on the results.

For instance (apologies Keith, I've taken you at random from the #Trust2011 stream on twitter today (January 25, 2011)

Nope. You can't conclude that from the Edelman data.

 

This neither. Not with anything like a useful degree of certainty.

The danger in both cases (and they aren't alone, and I've almost certainly been guilty of doing the same myself in the past...) is that we conclude that what is true of a small subset is true for the whole populace.

You may be able to make the case if the sample was relatively representative of the general populace. Random even. But the Edelman data isn't.

And it very clearly isn't. All you have to do is read slide two of their own presentation on the Trust Barometer to know this:

Edelman's Trust Barometer is a survey of a relatively small number of heavy-media consuming social and economic elite.

Please treat it as such.

Doesn't make for as neat a headline, soundbite or tweet does it? The truth's a bitch sometimes, ain't it?

Full report etc here.

Related articles

• Trust Plunges in the United States While Resilient Across the Globe (prnewswire.com)
• Trust Transformed: Results of the 2011 Edelman Trust Barometer (edelman.com)
• U.S. trust in business tumbles (theglobeandmail.com)
• Corporate Reputation: Everybody's Watching (mediabistro.com)

No one is fooled. Nobody. Talk human to me.

Great post from Chris at the Long Tail that everyone trying to sell subscriptions to magazines this Christmas should read.
Repeats the message of the 'Trust me I'm a brand' post below.