Sunday, January 29, 2012

How Does One Define Trust at Work?

Akram Boutros and Claire Joseph mention that “the root cause of most failed personal and business relationships is the inability to build, maintain and recover trust. A cohesive team working in an environment of reciprocal trust is paramount to success during times of extreme change. When people trust their leaders, they willingly get on board with a strategy, thereby harnessing tremendous speed and agility to help navigate times of great change,” (p.38).

They go on to remind us that trust is a product of choice: one chooses to entrust another with something important. Trust is visceral and is reinforced by shared experiences over time, kept promises and understanding of the motives underlying sacrifices. We must not confuse trust with credibility. Credibility is an intellectual attribute that is based on past performance.

Yet in the business arena is ‘trust’ a subject that is spoken about openly or is it simply assumed that people do or don’t trust each other – having a macro impact of the culture of the organisation. I mean, has any one ever asked you in your organisation; ‘do you trust me?’ and if they did, what would your answer be.

Robert Solomon and Fernando Flores, in their seminal book Building Trust in Business, Politics, Relationships and Life, advance the concept that “distrust is not so much the opposite, as it is the other side of trust. They go on to differentiate basic, simple, blind, and conditional trust from “authentic trust.” Where authentic trust contemplates distrust and moves beyond it, sometimes in a steady march and at other times through leaps of faith.

Patrick Lencioni, in Five Dysfunctions of a Team: A Leadership Fable states that in his opinion trust is the basis of the remaining four attributes of effective teams (engagement, commitment, accountability and focus). Trust leads to engagement, which he defines as “the productive ideological conflict that has as its only purpose the attainment of the best possible solutions in the shortest possible time.”

What’s genuine about authentic trust is that it has a built-in reservoir that tolerates mistakes and setbacks without diminution of trust. Consequently, authentic trust will bounce back of its own accord, making it a precious insurance policy against loss of trust.

Yet how often is this true in your organisation; where there are these ‘built-in reservoirs that tolerate mistakes and setbacks without diminution of trust’; as this is one of the key factors that distinguishes the good from the bad organisations.

Boutros and Joseph highlight how recovering trust requires three separate actions that when combined act as a restorative intercession that can heal the relationship. They are:
1. Sincere apologies
2. Permitting the affected person to influence you
3. Fulfilling the promise

In his book, The 8th Habit: From Effectiveness to Greatness, Dr. Stephen Covey writes, “the power of choice means that we are not merely a product of our past or our genes; we are not a product of how other people treat us. They unquestionably influence us, but they do not determine us. We are self-determining through our choices. If we have given away our present to the past, do we need to give away our future also?”

So as Boutros and Joseph mention that “one must be mindful that, as with a house, trust must be carefully built, lovingly maintained and steadfastly renovated as needed.” So trust needs to incorporate three major elements - it must be:
1. Built on a strong foundation
2. Deliberately planned
3. Structurally reinforced

Though we must ask ourselves in today’s society, whether trust is a dying ‘art form’, where maybe the majority of people prefer to actively ‘distrust’ rather than trust and in this scenario we should consider the impact this has on our own potential for real success and the potential success of the organisation.

But even in the 21st century we should remember that “trust is the most basic and essential element of both personal and business success. It requires courage, determination and sacrifice. It is optimistic, full of promise, fair and supportive. It helps us negotiate troubled waters and beseeches us to build lasting relationships. It helps us to value each other as individual humans, not as components of a large machine,” (Boutros and Joseph, 2007, p.41).

As Solomon and Flores concluded, “to survive and thrive, we must count on each other and find leaders to follow. Like it or not, we are all in the process of creating a new way of life, and no one knows just what it will be. That is the domain of leadership, authentic trust, and history making,” (Boutros and Joseph, 2007, p.41).


Boutros, A, and Joseph, C.B. (2007). Building, Maintaining and Recovering Trust: A Core Leadership Competency. The Physician Executive, Jan:Feb, p.38 -41.

Covey, Stephen R. The 8th Habit: From Effectiveness to Greatness. New York: Free Press, 2004.

Lencioni, Patrick M. The Five Dysfunctions of a Team: A Leadership Fable. San Francisco: Jossey-Bass, 2002.

Solomon, R.C. and Flores, F. Building Trust in Business, Politics, Relationships, and Life. New York: Oxford University Press, 2001.

Sunday, January 15, 2012

Do All Organisations Recognise the Importance of Customer Equity?

Customer equity places customers at the centre of a firm’s activities, recognises customers as strategic assets and seek to measure the value of a customer (across the many relationships that the consumer has with the company) in order to measure marketing productivity. Thus, understanding how people make the consumption decisions and using that information to better serve the consumer is a central goal of marketing, (Holehonnur, A., Raymond, M.A, Hopkins, C.D and Fine, A.C., 2009, p.166)

In their search to understand their customer’s organisations use various techniques which can include customer surveys, focus groups, customer relationship marketing (CRM) systems, customer platforms for generating feedback and even the relatively recent customer-generated content and social-media networking sites. These techniques and methodologies can be used at the macro level, product level, regional level and/or various forms of demographic levels (age, gender by product by region, etc).

The theory is quite sound and well tested, yet there seems to be a highly-significant correlation between the most recent customer experience and their ‘response’, where a singular bad experience can negate a life-time of good service, in respect of the response, but even then may not necessarily change the customers buying pattern.

This highlights that what customers say at a point in time and what customers actually do, when it’s time to make their next purchase can be significantly different.

Holehonnur et al, highlight how the customer equity framework is composed of value equity (which is driven by quality, price and convenience), brand equity (which is driven by brand awareness, attitude toward the brand and consumers’ perceptions of brand ethics) and retention equity (which is driven by loyalty programmes, affinity programmes, community programmes and knowledge-building programmes). And where Holehonnur et al (along with many others) mention that value equity, brand equity and retention equity have been suggested as drivers of customer equity, (p.168).

But some organisations in the 21st century seem to take a different approach; looking to marginalise the customer, seeing them as a ‘problem’ to their success, rather than a ‘solution.’ These organisations are usually large and have significant market share and seem to adopt  a ‘couldn’t care less’ approach to value, brand and retention and use a less than ‘transparent’ approach to attract the ‘customer’ in the first place. But once ‘hooked’ and signed up, these organisations take little to no interest in providing a service – being big enough to ignore the ‘bleats’ of dissatisfied customers.

Also, cleverly, they ‘hive’ off the customer satisfaction responsibilities to ‘call centres’, where minimum waged staff have to endure the anger and frustrations of dissatisfied customers, on an hourly basis - while those responsible within the organisation enjoy their business lunches and golf days, with business tycoons and celebrities.  Organisations that fit this mould include firms like Vodafone and Orange, who have a clever strategy of wearing the disgruntled customer down through attrition, to the point that the majority of customers just throw in the towel and give up their complaining – towing the company line as planned, like good little sheep.

This seems to be especially true in the more ‘developed’ nations like the US, UK and other European countries (and where I use the word developed loosely). Where these customers feel so much more disenfranchised that they no longer expect ‘good’ service and approach their purchasing decisions with that in mind – it’s just a ‘cold’ purchase, based on price and convenience – with no promise of a repurchase.

It’s worth remembering that in the business theory, value equity is defined as the consumer’s objective assessment of the utility of a brand, which is formed by perceptions of what is given up for what is received. There are three main drivers of value equity, namely, quality, price and convenience. It’s interesting that they mention an objective assessment of a perception which I would have thought didn’t make sense – how can you be objective about a perception? Or at least how you can be truly objective about a perception – if you don’t know how accurate your perception is? But maybe that’s just me. 

At least brand equity is defined as the customer’s subjective and intangible evaluation of the brand (the product or service offered by the firm) and the firm, above and beyond its objectively perceived value. The three key drivers of brand equity are defined as brand awareness, attitude toward the brand, and corporate citizenship and duties, yet I wonder in the real world how much weighting each of these have on the customers ‘real’ brand awareness – and whether the 21st century customer is currently ‘calculating’ the brands corporate citizenship; and especially whether these ‘corporate citizenship’ assessments are based on fact or corporate hype.

In my experience too many large organisations are taking less and less interest in the theory of customer equity and are re-writing the business rules, especially where ‘customer contracts’ are involved in industries like, mobile, Internet etc – where these organisations have two sets of customer rules. First the ‘trap’ where they give all the hype to attract the customer to sign the contract (a bit like the approach to selling time-share or selling second-hand cars); and then once you’ve signed the real reality sets in and you realise that you are nothing more than just a number in their system, rather than an individual human customer – and if you want to leave – leave – but it will cost you.


Holehonnur, A., Raymond, M. A., Hopkins, C. D. and Fine, A. C. (2009). Examining the customer equity framework from a consumer perspective. Journal of Brand Management. Vol. 17, Issue 3, p. 165-180.

Sunday, January 8, 2012

How Should We Educate our Current and Potential Customers?

I’m reminded of the quote from Henry Ford (1863 – 1947) who after building his first car is quoted as saying, “if I’d asked my customers what they wanted – they would have told me, a faster horse.”

This brilliant quote highlights a very real dilemma for many organisations whose products and services are influenced by key factors like technological growth or behavioural research – how do they keep their average customer up to date with the real potential that technological developments and other influential research topics offers them. And how do they help the customer differentiate between what’s real and what is disinformation.
Current developments in internet e-tailing, for example, are leading to a consumer revolution – yet many, especially from the ‘older’ generation, are simply unaware of the opportunities this market place offers and the speed of upcoming improvements linking android technology to e-tailing and payment portals.
Products and services that were once assumed to be ‘immune’ to the e-tailing network, like fashion and accessories are already rapidly changing the face of the e-tailing environment. It wasn’t that long ago that it was assumed that the customer would always want to ‘touch and feel’ fashion items, like clothes and shoes – and yet the sudden increase in on-line fashion sites – and the rapid increase in customers purchasing from this e-tailing environment is already proving these theorists wrong.
Yet as much as the divide between rich and poor is increasing in many countries, so is the gap between those who are e-tailing savvy and those who aren’t. It won’t surprise people that once one has eliminated those areas of the world that don’t have easy and fast Internet access – then the overriding demographic of the fashion e-tailor is age.
This new e-tailing generation are swayed by celebrities who are often the face of the sites. Cheryl Cole, for example, promotes an e-tailing shoe site, selling her own brand to thousands of fans around the world. This e-tailing generation are happy to buy a fashion item on-line if they know that it’s ‘worn’ (or been worn) by a celebrity or is a ‘brand’ they can trust and want to be seen in.
For the older generation this may be a ‘change’ too far – remembering a time when certain measurements were taken before buying clothes or shoes helping the customer choose the right size prior to purchase. And while this older generation may be asking for a ‘faster horse’ – the new generation of buyers have moved into a new retailing dimension that is changing the face of the market place.
As with many previous times in history, there will be those that won’t believe that a dramatic shift in retail patterns is taking place, hanging on to a distant past – maybe fearful or ignorant of the changing face of the world they live in. Yet one just has to walk around London, for example, to see the amount of vacant retail space, something that would have been unheard of not that long ago.
To ensure the optimal future growth, not just for organisations, but for communities and countries as well; we must ensure that those that have accumulated years of practical business skills, in respect of key business elements like strategic implementation, talent management, leadership development, M&A’s, market and behavioural analysis are formally linked with the modern e-tailing experts – sharing their knowledge and learning from each other.
Failure to do so will lead to a further gap developing between the modern e-tailing environment and the ‘standard business models’ - and will lead to a wider gap between the ‘educated’ e-shopper and those refusing to accept this new era.
As Henry Ford said, “it’s not the employer who pays the wages. Employers only handle the money. It’s the customer who pays the wages.” So is it time for you to re-assess your business model and educate your customer in what is really possible in this new technological age?

Sunday, January 1, 2012

A Review of Some of the Stories from 2011

Here’s a short review of some of the headlines and the less well known stories of 2011.

January 1st: Toys, left in memory of six year old cancer victim Keira Darkes, were stolen from her grave.

January 8th: Republican Gabrielle Giffords is shot in the head at a public event and survives.

January 19th: President Barack Obama gives a lavish welcome to Chinese counterpart Hu Jintao.

January 20th: President John F Kennedy’s electrifying inaugural address was delivered half a century ago today and still resonates in today’s society.

February 15th: A UK Government spending watchdog went to talks on how to save public cash – in a chauffeur-driven limo that cost taxpayers £464.

March 11th: An earthquake off the Pacific coast of Japan triggers an enormous tsunami, which kills tens of thousands of people. The tsunami leads to partial meltdowns, explosions and radiation leaks at nuclear reactors.

April 20th: The Prince of Wales becomes the longest serving heir apparent in British history, having been first in line to the throne since 1952. Prince Charles, 63 in 2011, beats the record held by his great-great-grandfather, Edward VII.

April 29th: Prince William marries Kate Middleton at Westminster Abbey.

June 3rd: Three people are left in a trance in Portland, Dorset, after the stage hypnotist David Days trips and knocks himself out during a show. The confused – two men and a woman who were told they were Martians – are finally rescued when Days recovers.

July 7th: A month after it was performed in Sweden - on a 36-year-old cancer patient - the world’s first artificial organ transplant is declared a success. The synthetic windpipe was created by scientists in London.

July 9th: South Sudan, the world’s newest nation, is born. Achieving independence from Sudan as part of a 2005 peace deal, it is the first new African country since Eritrea separated from Ethiopia in 1993.

July 21st: When Space Shuttle Atlantis landed at Kennedy Space Center just before dawn this day in 2011, it marked the end of NASA's Space Shuttle program. The shuttle was the space agency's No. 1 space vehicle for 30 years, with numerous successes under its belt - notably the deployment and repair of the Hubble Space Telescope and construction of the International Space Station.

August 5th: In the apparent absence of a plan to tackle the nation’s long-term debt, the US is stripped of its AAA status by the credit-rating agency Standard & Poor’s.

September 3rd: An advertisement for an anesthetist on an NHS website, with the words ‘usual rubbish about equal opportunity employer’ – slips through the internal checks.

September 25th: Saudi women win the right to vote – but not to drive a car.

October 5th: Steve Jobs dies. The college dropout who helped popularize the personal computer and created the iPod, iPhone and iPad. His passing was nearly two months after Apple Inc., which Jobs started in a Silicon Valley garage in 1976, briefly surpassed Exxon Mobil Corp. as the most valuable publicly traded company in the world.

October 31st: The world’s population officially reaches 7 billion.

Dec 5th: The discovery of Kepler-22b, 600 light-years away from earth. Although twice the size of the Earth, the so-called Christmas Planet is right in the "goldilocks zone" - a distance from its star that would make it neither too hot or too cold to support life. With the revelation of two more Earth-size planets a couple of weeks later, we could be on the cusp an exoplanet-discovery bonanza.

December: In the US 25 million people remain unemployed or unable to find full-time work. The unemployment rate fell from 9 percent in October to 8.6 percent in November, providing a hopeful sign. Yet the housing market remained burdened by foreclosures and falling prices in many metropolitan areas. How to fix the economy became the top campaign issue for Republican presidential contenders.

December 20th: South African media reported that between the 1st and 19th December there were 710 fatalities on South Africa's roads (one wonders, with a feeling of trepidation, what the figure will be by the end of December and after the New Year celebrations).

And in memory of a small fraction of those who said a final farewell in 2011;

6th February; Gary Moore at 58 (the former Thin Lizzy guitarist died of a heart attack while asleep on holiday in Spain);

20th March; Dorothy Young at 103 (stage assistant to Harry Houdini);

23rd March; Elizabeth Taylor at 79 (actress);

26th March; Dr Harry Coover at 94 (the inventor of Super Glue, the world’s strongest adhesive);

1st May; Sir Henry Copper at 76 (best remembered for his two momentous fights against Muhammad Ali in 1963 and 1966);

5th May; Claude Choules at 110 (the world’s last known combat veteran of World War I – after joining the navy at 15 years old);

3rd June; Jack Kevorkian at 83 (US right-to-die campaigner);

18th June; Yelena Bonner at 88 (Russian human-rights activist);

8th July; Betty Ford at 93 (former US first lady who founded the Betty Ford Center);

10th July; The News of the World at 168 (due to immoral acts);

17th July; Alex Steinweiss at 94 (inventor of the album cover);

23rd July; Amy Winehouse at 27 (way too young);

7th August; Nancy Wake at 98 (British agent and Second World War heroine);

13th September; Richard Hamilton at 89 (pop-art pioneer);

20th September; Robert Whitaker at 71 (Beatles photographer);

5th October; Steve Jobs at 56 (founder of Apple);

19th November; Basil D’Oliveira at 80 (cricketer who became a force against apartheid); and

25th December; Sue Carroll at 58 (legendary Daily Mirror Journalist - who was among the first women to break into the male dominated world of Fleet Street national newspapers).