Enterprise trust management: What Indian businesses must focus on

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In a corporate world, where there are different stakeholders, with different interests, the trustquotient must be at a high level for smoother functioning of the business. After all, trust is the only glue that holds all relationships together.

Trust is the outcome of high competence and good intent and is a culmination of several key factors such as capability, reliability,humanity, and transparency. Trust is very critical in any relationships, beit personal or business. In today’s world, the importance of trust is evenmore critical given the internal and external environment. In a corporateworld, where there are different stakeholders, with ditferent interests,the trust quotient must be at a high level for smoother functioning of thebusiness. After all, trust is the only glue that holds all relationships together.

Trust for organisations
Trust is among the top business issues across all industries, although it varies from industry to industry. Based on the recent survey conducted by Edelman, in the case of Consumer industry, 81% of the customersview trust as a deciding factor when evaluating a potential purchase decision. As per the GFT Banking disruption Index 2022, 48% of thecustomers do not trust banks to help manage consumer finances during recession. Another Survey points out that over 40% customers trust tech brands that display competence and good intent.

Whether it is the Board or the CEO, building trust is important for the organisation’s performance, employee motivation, customer loyalty, and other stakeholder’s comfort. In a recent survey, 94% of global boards believe building trust is important to the organisations performance. There is absolutely no doubt that organisations that build trust equity outperform the competition by miles.

Building trust - panacea for business problems?
Whilst there are several issues that dominates the businesses such as business performance, digital engagement, workforce experience, ESG and everyone is looking for a solution, one common theme that would cut across all solutions is trust. In a recent Deloitte global research, four measurable benefits of trust were identified:

  • Stronger financial results (highly trusted companies outperform low trusted companies with up to 4x amplification of market value)
  • Increased customer loyalty (of customers who highly trust a brand, 88% bought again and 62% buy almost exclusively)
  • Greater workforce engagement (79% of employees feel motivated to work for a trusted employer)
  • Stronger brand protection and resilience (Highly trusted companies were 2x more resilient during the pandemic organisations impacted by trust events fall 26-74% behind their industry peers in value and market cap)

Trust in digital operations 

Trust in digital operations is a hot topic in today's business world. Digitalisation has brought about a transformative change in how businesses operate, especially in the realm of data collection, storage, and processing. The proliferation of digital technologies has amplified the importance of trust. As organizations increasingly rely on digital platforms, tools, and ecosystems, the need to ensure that these systems are trustworthy becomes critical. 

For Indian businesses, in the light of the newly enacted data protection law, complying with the same is paramount to ensure trustworthiness in digital operations inter alia in the areas of their data protection framework, roles and obligations, consent management, data subject rights, breach protocols, encryption and storage, concurrent audits, etc. 

Around the globe 

There is no doubt that trusted companies perform financially very well on a sustainable basis, and they continuously look out for avenues to enhance their trust quotient. Trust is not the topic just for operational performance and this has become super critical today in view of the number of other factors such as intricate global supply chains, heightened government and regulatory monitoring, informed and discerning consumers, wider reach of social media, etc. 

The interesting fact is whilst the C-suite knows the importance of trust, they are uncertain about its measurement and the consequent actions in view of the complexities of the businesses and their operating environment. 

Success succeeds trust 

As the world becomes more interconnected and digital, the intangible asset of trust has gained increasing prominence in the enterprise realm. Trust acts as a cornerstone for sustainable growth, resilience, and reputation in today's complex business environment. There is no doubt that for entities to become successful, they must build trust, measure, maintain, and leverage it to reach new heights. 

The great Saint, Tiruvalluvar several years back, wrote "Trust is the bedrock of any strong relationships" and the same holds true for businesses and their relationships with their stakeholders. Enterprise Trust Management is definitely a new paradigm that Indian businesses need to focus on in their journey to global glory. 

The original article was published in Economic Times on 23 August 2023

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