The first time we noticed a lack of trust in the UK’s banking system was sitting in a pub in Croydon looking across the road at an orderly queue of savers anxiously waiting to extract their money from the Northern Rock Building Society.
It seems amazing that in just over 18 months since the Northern Rock problems became public we have had a series of runs on currency, banking scandals and general incompetence in our banking system.
The result is that despite the fact that in most cases these are problems caused by bankers to other bankers the public and industry in general can no longer get adequate credit to run business or conduct daily life in the manner we have become used to.
For us though the most important thing that has been lost through this situation is trust.
When there is trust between businesses and people the speed of transactions increases and the costs generally go down. In many cases this is the objective of companies who work in strategic partnerships. They get closer together to understand each others challenges and resolve them together.
Unfortunately, this situation can be abused by the greedy and unscrupulous and this is what happened with hedge funds and was certainly the situation in the US when, following the Enron, Worldcom and other corporate scandals, the Sarbanes-Oxley Act was passed to protect investors.
A recent study suggested that the cost of implementing just one section of this act costs the US a staggering $35bn a year. This is an example of a loss of trust slowing things down and making them cost more.
Stephen MR Covey in his book ‘The Speed of Trust’ identified trust as being the function of two things. These are Character and Competence. Character includes integrity, and a person or companies motive and intent.
However, the differentiating and usually ignored side of trust is competence. You might be able to trust someone with your wallet, your wife or even your children, you might describe them as sincere and honest, but can you trust them to deliver the results you need.
Companies need to understand this important lesson, when they employ people and give them increasing levels of responsibility.
Simply put competence is about doing things right and character is about doing the right things.
Building trust is like filling a reservoir with water a teaspoon at a time. Each drop builds on what has been done before, but trust is lost, usually forever, in a single action or thought.
The banking system now has a lifetime’s work ahead of it re-building the trust that it once had from its customers. A quick ad campaign will make no difference whatsoever.
Customers are going to be naturally wary of any dealings they have with banks and will look for viable alternatives to fund their businesses and personal requirements.
The foodservice industry can learn from the mistakes of the banking industry by understanding that they should only build strategic relationships with business partners that are first and foremost competent and then judge them on their character. If you are not happy with either of these measures work with someone else.
Extolling these virtues can lead to fascinating results. For instance at Catersummit in October one of 3663’s biggest rivals in foodservice wholesaling paid credit in their presentation to Fred Barnes and the management team of 3663 for the years they have worked together to build a great business.
They made reference to the fact that the management team at 3663 had been together for many years, were very visible supporting the wider industry and always tried to do the right thing.
What greater accolade can any business have than to be recognised as being trustworthy by one of its closest competitors.