Actions CEOs can take to build trust

Again from the Edelman Trust Monitor 2014 , some guidance on how the top people can build trust.

• Communicate clearly and transparently
• Tell the truth regardless of how complex and unpopular it is
• Engage with employees regularly.

These are actions that everyone in an organisation can adopt too. Interestingly,the Monitor also reports that employees are considered the most trusted source across most of the " trust attributes" in the survey. The public want to hear directly from employees as ambassadors and advocates to attest to the integrity, quality, relevance of the products and services sold.

Again this bolsters the argument for a stakeholder response to sustainable business with employees figuring highly in any investment calculations. It also reinforces the "value creation cycle" theory ie if employees believe they have a good deal from the firm  (compared to alternatives) then they are more likely to put more effort and loyalty in, which results in better behaviour/conduct when dealing with customers, more sales, better reputation etc etc.

CEO: the Chief Engagement Officer

The 2014 Edelman Trust Monitor report states that 84% of respondents believe that "business can pursue its self-interest while doing good for society". Adopting this kind of thinking would obviously result in some major change for organisations. In the report it talks about the CEO becoming the Chief Engagement Officer taking responsibility for the establishment of the context in which any change will occur. This would include spelling out not only the economic rationale but also the emotion,risk and societal benefit.

The report points to a three step approach to establishing context ie.

• Participate: seek input from a broad range of stakeholders.
• Advocate: clearly articulate strategy i.e. how a proposed change improves the lives of customers as well as the bottom line.
• Evaluate: evolve behaviours based on collective outputs.

One of the many benefits of business ethics is the engagement with stakeholders so that instead of them being more of a risk to the business (e.g. employees, suppliers, investors not on-side with change) they genuinely feel part of the change, are less resistant, more positive (may even generate ideas and opportunities themselves) which helps to reduce overall cost and build better value.

Getting stakeholders involved in how a proposed change improves the lives of customers as well as the bottom line will also help to provide balance and change thinking .

More pressure needed on suppliers;Bangladeshi workers still suffering

It was reported yesterday that factories where clothes made for Lee Cooper, Bhs and other UK stores were still abusing their workers both physically and verbally, along with flouting fire safety rules.This is even with an international movement to improve standards with such things as the Bangladeshi Fire and building Safety Accord (following the horrendous loss of life last year in factories due to fire).

The Accord involves nearly 150 retailers and brands and the aim it to survey up to 1,500 factories by October this year as well as train workers. This illustrates the growing increase in businesses recognising the impact on their reputation and brand of poor working conditions in their supply chain and the need to more rigorously apply fair treatment to all stakeholders.Solving the problem in places like Bangladeshi is not easy. Pulling out of these countries and factories has a massive economic impact on the families and children working in them and there isn't a quick fix. More investment in education and training are clearly needed and the question will always be, where do you draw the responsibility line as a company for more active involvement and investment?

Tone from the top: Ryanair's shareholders revolting

It's good to see that the shareholders of Ryanair have had a wake-up call and are starting to see that for long-term sustainable profits the fair treatment of customers is essential. The contempt, arrogance and machismo shown by CEO O'Leary for his customers has hopefully had its day.

Profits are set to dip for the first time in 5 years and the share price is making a dive south hitting the shareholders where it hurts most. To quote O'Leary they are now going to "stop unnecessarily pissing people off... [give] better customer service ....we're listening to you. We're responding to your needs".

 This is a fine example of the need for shareholders to use their power and pressure to shape the businesses they have invested in for all stakeholders. Why? because it reduces reputational damage, reduces the costs of dealing with dissatisfied staff, customers, strategic partners etc etc builds trust and ultimately builds value.

Also good on easyJet for creating the competitive pressure and alternative "role model".