Interview: How trust can accelerate business growth

Raiser Resource CEO Ian Ng’ethe, who will host Stephen MR Covey end of August, puts Speed of Trust in perspective

BUSINESS TODAY: Why do you argue that trust is a crucial factor affecting the cost of business and how fast things happen?

IAN NG’ETHE: Trust is one of the biggest hidden variables in business. This is true if you think about it practically in our day to day life. Since the onset of terrorist attacks we find that we have to go through security in buildings and the airport. The enhanced security affects the cost of business and how fast business is conducted in those institutions.

BT: Why do you say trust is important within organisations?

IAN: Trust is key in a number of ways. We have already seen that in trust-filled organisations the cost of doing business goes down and speed of doing business goes up. Imagine how much time and energy is lost to office politics due mistrust.  Secondly when we look at organisations they can have an excellent strategy and a strong ability to execute, but the net result can be destroyed by a low trust tax or multiplied by a high tax dividend. Traditional business formula: (SXE=R) but the hidden variable is Trust thus (SXE)XT=R.

Another reason why this hidden variable is so significant in today’s world is because we are operating in a global, knowledge worker economy that revolves around partnering and relationships. Ability to establish, grow, extend and restore trust with all stakeholders (customers, suppliers and co-workers) is a key leadership competence of the new global economy.

BT: Looking at the current business environment, which are some of the examples where if trust was at the core, things may have turned out different?

IAN: The trust issues we have here in Kenya extend to banking, the stock market, advertising, embassies, sports, manufacturing and teachers.  In the recent issue of banking you have to ask yourself  what if the stakeholder (the directors & board, the auditors and the regulator) had all acted with trust at their core; would we have three banks going down?

BT: How can a CEO or manager tell if his team or organisation is as high-trust or low-trust?

IAN: Both character and competence are critical to trust. Organisations whose staff have the right character (integrity, resilience, empathy and courage) and the rightcvompetence (skillsets) can be defined as a high trust organisation. Those that don’t have all or one of this would be classified as a low trust organization.

BT: Every month, we see managers moving from one company to the other. What would be your advice to a manager moving into a low trust environment?

The key advice would be to intentionally establish, grow and extend trust in this environment. Help direct reports to be more competent by mentoring them and taking them to be trained in areas where they are incompetent. Give higher responsibility to staff members once they are competent. Lead by example when it comes to character. Co-workers will start reciprocating and extending trust to you.

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BT: What are some of the cultural and religious factors that are likely to affect trust in our emerging market economy even looking at the Islamic banking?

IAN: I think we are going back to our roots. If you look 50 years ago and the years before that, people valued integrity and valued living honourable lives. Today many have shifted away from this and we are now living a more outward and materialistic life. So Islamic banking, which is about sharing of profit and loss and, significantly, the prohibition of the collection and payment of interest seems to me like a win-win arrangement for both the customer and bank.  This would definitely enhance a trusting relationship.

BT: Early this year, a global survey showed that trust was shifting from traditional authorities such as brand owners and media to peers. What does this imply to people who are considering going into business? What does this also mean for established brands?

IAN: About 78 percent of respondents who took part in the Edelman Trust Barometer said that they trusted their family and friends on social networking sites more than CEOs. Online media jumped 8 points to 53 percent and is now the third most trusted source, followed by owned media, which is up 3 points to 46 percent and social media (44 percent). Word of mouth referral is important – big companies must focus on great service! Established brands share will be nibbled by the small start-up brands due to their personalised service. The smaller brands will be able to easily make their name through advertising in online media.

BT: Looking at the recent developments in Kenya’s banking industry and the sudden drop in trust among the public, what can financial entities do to create and rebuild trust?

IAN: Luckily trust can be restored and even enhanced. They need to improve their character and competence.  Look at what happened to Chase Bank. Many people went back and vowed to stay in that bank. You can improve character by having staff and directors that have integrity and a board that is competent to see signs of trouble way in advance.

BT: We understand that Stephen MR Covey is coming to town in August. Tell us more about this.

IAN: Raiser Resource Group will be hosting him in Kenya for the first time.  He will be here on 30^th and 31^st of Aug.  On 30th he will spend time with 100 Kenyan CEOs while on the 31^st we will have an open session for interested participants. Both events are paying events and will take place at the Radisson Blu Hotel.  The CEO event ticket price is Ksh65,000+ VAT whilst the one for the public event is Ksh80,000 for VIP seating and 60,000 + VAT for standard sitting.