In business, trust is the bedrock upon which successful relationships are built. These relationships are with all your stakeholders–customers, investors, employees, and the broader community. Without trust, even the most robust strategies can falter, leading to lost opportunities and a damaged reputation.
You might not have considered it, but the right fractional executive can help you to build this trust, or even rebuild broken relationships. A fractional Chief Revenue Officer (CRO) can play a pivotal role in this process, leveraging their expertise and fresh perspectives to address these issues head on. The question is how, and that's what I'll explain below.
Trust in leadership is absolutely crucial. But for businesses, it's a cornerstone of customer satisfaction. Let's put it into monetary terms: in 2018, the Economist studied eight recent business scandals. They found that the median firm was worth 30% less than it would have been without the scandal occurring. In other words, declining trust also means declining revenue.
In recent years, a lot of incidents have led to an overall decline in trust throughout the business world:
However, this erosion of public trust is not limited to large corporations. It trickles down to affect smaller businesses, too, including start ups and growing companies. Here, the impact can be even more pronounced.
When trust is broken, the consequences are far-reaching. If you don't have trust with your employees, for example, their morale will be damaged. And this can impact their productivity, since workers who feel betrayed by leadership are less likely to be engaged and motivated. If this affects your sales team, you're staring down the barrel of low revenue.
Meanwhile, for customers, broken trust can lead to decreased brand loyalty and a tarnished reputation. In turn, this affects retention and, once again, revenue.
The ripple effects of these issues can stretch out for years and years, impacting the business decisions of the future. Think of Facebook, for example. The news that it had sold customer data to other companies in 2018 prevented Mark Zuckerberg from launching a dating app. Who would share their personal data with a company that admitted to selling such information?
Fortunately, there are ways to address the trust crisis. Businesses need to focus on rebuilding trust through transparency, accountability, and consistent ethical behavior. Implementing robust compliance measures and fostering a culture of openness can help restore confidence among stakeholders, ultimately driving sustainable growth and success.
The trust crisis has already altered how a lot of businesses operate, prompting a shift toward more conscious business practices. As trust in leadership and corporate behavior waves, companies are adopting transparency and ethical standards on a wide scale. Here's how.
"Conscious business" emphasizes transparency and ethical behavior, fostering a commitment to creating value for all stakeholders. This approach is rooted in the idea that businesses should focus not only on profits, but also their impact on society and the environment.
Patagonia is a great example of a conscious business. Their customer journey is entirely unique, because the premise is all about not buying clothes. That's pretty radical for a clothing company. And yet, it appeals to their eco-friendly audience, ensuring customer satisfaction among their target consumers.
Other companies can hop on this trend by prioritizing ethical sourcing, fair labor practices, and environmental sustainability, demonstrating that business success and social responsibility go hand in hand.
Engaging your stakeholders on a company scale is important, but building trust extends beyond that, to the broader community. Trust issues have highlighted the importance of transparent communication in decision-making processes, and that includes creating a dialogue with your customers. Businesses are now more committed than ever to honest interactions that give a glimpse behind the scenes, ensuring that their customers are well-informed and engaged.
For employees, this means fostering a culture of trust and respect that boosts morale and productivity. Again, employees should always be aware and up-to-date. Meanwhile, sales leadership teams can ensure that they address the concerns of their employees more effectively. Communication isn't just about talking, after all, but listening as well.
There are plenty of companies you can look to for inspiration when it comes to the growth potential of more ethical business practices.
And these are just three examples. As the emphasis on transparency continues to grow, plenty of other companies will step forward to embrace the new normal. The question is, how can your business get involved?
Fractional leadership is just one way to do it. Learn more by booking a call with me today.
