Freedom after the sharks

The acceleration of global integration has ushered in a new, interconnected world that defines our future.

Trust is the superpower that lays the foundation to emerge. To establish trust, leaders need to create a culture that values transparency, authenticity and the courage to fail.

We build trust through a pattern of selfless acts giving our time, attention and resources to others without the expectation of material return. Selfless acts, such as extending unexpected rewards or offering additional support during heightened times of stress, tighten our human bonds, strengthen our psychological safety and help make our sense of fear more manageable.

• Trust creates a sense of shared mission, unleashing meaningful purpose.
• Trust creates a feeling of security, unleashing resilience and collective cooperation.
• Trust facilitates healthy risk-taking and activates a growth mindset, unleashing imagination.
• Trust helps us connect as individuals, unleashing happiness and compassion.
• Trust opens the door to possibility, unleashing transformative practice.
• The speed of this innovation is accelerating and we will see even more change in the future than ever before.

The question, however, as we come to face rapidly changing realities, how do we solve for enhanced employee satisfaction, better customer experience and energetic execution of business strategy?

How do we weave long-term value creation into daily operations? Is the pace of global change sustainable?

The globalisation machine has brought great riches to those able to adapt, but left others further behind, leading to increasing inequality within countries. Another feature of globalisation is that it has bred interdependency, exposing the global population to cascading risks, from financial crises to pandemics and cyber-attacks. Our actions now affect others in ways that were unimaginable in a disconnected world.

Notwithstanding, humans don’t just have the ability to adapt. They have the power to assess, process, and grow. Flourishing in the face of change requires mutual trust, a mindset open to possibility and ongoing practice both on the individual and corporate levels.

We now live in a world where virtually anyone can bring about mass destruction. Cyber has become the new nervous system and will become ever more vulnerable as the internet-of-things technology sees explosive growth. New technologies also threaten the very fabric of our society. An Oxford University research group says 47 percent of US jobs are vulnerable to machine intelligence and perhaps as much as 35 percent of UK jobs.

A seismic shift is underway. Thanks to new technologies that enable frequent, low-friction, customized digital interactions, companies today are building much deeper ties with customers than ever before. Instead of waiting for customers to come to them, firms are addressing customers’ needs the moment they arise—and sometimes even earlier. It’s a win-win: Through what we call connected strategies, customers get a dramatically improved experience, and companies boost operational efficiencies and lower costs.

Research has identified four effective connected strategies, each of which moves beyond traditional modes of customer interaction and represents a fundamentally new business model. These strategies have been described as; a response to desire, curated offering, coach behaviour, and automatic execution. What’s innovative here is not the technologies these strategies incorporate but the ways that companies deploy those technologies to develop continuous relationships with customers.

Most companies still interact with customers only episodically, after customers identify their needs and seek out products or services to meet them. You might call this model buy what we have.

In it, companies work hard to provide high-quality offerings at a competitive price and base their marketing and operations on the assumption that they’ll engage only fleetingly with their customers.

Let’s explore specifically the aforementioned strategies:

Respond to Desire; this strategy involves providing customers with services and products they’ve requested—and doing so as quickly and seamlessly as possible. The essential capabilities here are operational: fast delivery, minimal friction, flexibility, and precise execution.

Curated Offering; with this strategy, companies get actively involved in helping customers at an earlier stage of the customer journey: after the customers have figured out what they need but before they’ve decided how to fill that need. Executed properly, a curated-offering strategy not only delights customers but also generates efficiency benefits for companies, by steering customers toward products and services that firms can easily provide at the time. The key capability here is a personalized recommendation process. Customers who value advice—but still want to make the final decision like this approach.

Coach Behaviour; both of the previous two strategies require customers to identify their needs in a timely manner, which (being human) we’re not always good at. Coach-behaviour strategies help with this challenge, by proactively reminding customers of their needs and encouraging them to take steps to achieve their goals. Coaching behaviour works best with customers who know they need nudging. Some people want to get in shape but can’t stick to a workout regimen.

Automatic Execution; all the strategies we’ve discussed so far require customer involvement. But this last strategy allows companies to meet the needs of customers even before they’ve become aware of those needs. In an automatic-execution strategy, customers authorize a company to take care of something, and from that point on the company handles everything. The essential elements here are strong trust, a rich flow of information from the customers, and the ability to use it to flawlessly anticipate what they want. The customers most open to automatic execution are comfortable having data stream constantly from their devices to companies they buy from and have faith that those companies will use their data to fulfill their needs at a reasonable price and without compromising their privacy.

There is a revealing quote often associated with management theorist and proponent of systems thinking W. Edwards Deming: “In God we trust; others must provide data”. Deming died nearly thirty years ago, but the business world has embraced his philosophy ever more tightly since then. Today we are surrounded by astonishing amounts of data, and our ability to parse, analyze, and interpret them would likely be beyond even his far-seeing mind.

With the coming of Big Data—and the opportunity it gives for providing nuanced, ever-more personalized analysis, interpretations, and solutions to problems—it can at times seem that all future decisions will only be taken inside the ‘black box’ of the processing unit, hidden from human view and comprehension.

Increasingly we are seeing why this is not best practice. For me, all analytics should start with the human—not, as is often the case, with the data.

Twenty-five quintillion bytes of data are generated every day. That’s 25,000,000,000,000,000,000.

In this era of data abundance, it’s easy to think of these bytes as a panacea – informing policies and spurring activities to address the pandemic, climate change or gender inequality – but without the right systems in place, we cannot realize the full potential of data to advance a sustainable, equitable and inclusive future.

As our global challenges grow increasingly urgent, it is clear we need to approach data in a new way.

Business analytics should offer a structured, systematic way for leaders and teams to approach business problems. There should be systems that allow us to leverage the underlying data to support the intuition of individuals, and certainly not replace the decision-making capabilities and experience of domain experts who should be guiding the process.

It is not only organizations that need to have expertise in evaluating and analysing data. Data-driven decisions are now so prolific that we all, as individuals, have an interest in better understanding how these processes and systems operate.

There is a common misconception that recruiting an expert in data analytics or data science is going to lead to quick solutions to every problem you have. Very often the new talent with data expertise does not have the domain expertise required to fully engage with and understand these problems to begin with. Not, at any rate, at as broad and deep a level as you would need in order for them to bring about optimal and innovative solutions.

To unlock the real value of these new data analytics hires, they should be partnered with your domain experts—people with a very sharp intuition about the right questions to ask and the issues your team or organization ought really to be caring about.

In order for technology to reach its full potential, company leaders need to be transparent and instill trust for data sharing. Research by the British Science Association revealed a vast lack of trust in artificial intelligent machines, with fears of being ‘taken over’ by technology. This suspicion is a major barrier to close relationships forming between technology and humans a relationship that is needed in order for technology to work. As an example, artificial intelligence is in fact not artificial at all, it is an astute web of intelligence surfacing the most pertinent elements at the right time for the right purpose and enabling humans to make the choices that are right for them.

While some may think artificial intelligence is a long way from affecting their day to day, companies must get a handle on how best to utilise its superpowers before it’s too late. Action is the true measure of technology either taking action on our behalf because we have chosen them to do so, or informing action that we take. We’re on the cusp of a generational change in how we think about computing. While the capabilities of machines and the capabilities of humans are different, they work so much better together. The power and accuracy of AI complements the creativity and emotion of humans. Together they are more powerful than either is alone.

Final thought, with trust as the end goal, it’s crucial that the design of new technologies be fully consistent with an organization’s and community’s values. The challenge for organizations is to anticipate unexpected implications of the tools and innovations that they build and avoid reinforcing existing social inequalities, as well as consider the ethics of the elimination of existing jobs on the future workforce.

A great quote by Paul R. Daugherty, “Human + Machine: Reimagining Work in the Age of AI”, sums up the final thought perfectly:

“The simple truth is that companies can achieve the largest boosts in performance when humans and machines work together as allies, not adversaries, in order to take advantage of each other’s complementary strengths.”

There is much debate on customer trust and do companies undervalue their customers, it was Warren Buffet who once said “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”

When we start to look at the customer value, this term has several definitions, any correct measure of the term should be described as customer lifetime value. Companies can increase this value by acquiring more customers. Equally, companies can destroy customer value in a variety of ways: to boost revenue, to cut labour costs and to reduce operating costs. Leadership and when reviewing the importance of customer value should make this a business priority.

Investors always ask difficult questions, however, it is widely understood the importance of customer value, many growth-stage companies preparing for an IPO or exit are in the main focused on acquiring customers that are unprofitable, but project earnings on future expected earnings from multiple products or services.

Leadership must gain and maintain the support of board members and investors by educating them about an employee based engagement program aligned to strategy. Leaders need to demonstrate to investors and board members that the decisions made will yield strong equitable returns, in the form of increased customer acquisition and retention, growing revenues, lower costs to serve and measures to improve customer value.

It is always an easy option to blame a companies short termism on shareholder pressure and a bias towards quarterly financial reporting. But managers share the blame when they fail to educate investors about the customer value their company creates or when they resort to quick profits instead of investing in long-term customer loyalty and value.

It would be irresponsible for any leader to ignore such a proven source of profitable growth. Boards and shareholders should demand that companies grow customer value, support the necessary investments, and push for new accounting standards that make the returns on these investments visible.

The true purpose of a business, Peter Drucker said, is to create and keep customers. Most managers understand this, but few behave as if they do. Under relentless earnings pressure, they often feel cornered, obliged to produce quick profits by compromising product quality, trimming services, imposing onerous fees, and otherwise short-changing their customers. This short-termism erodes loyalty, reducing the value customers create for the firm.

Any strong relationship is built on a foundation of trust and that includes the relationship between brand and customer. Whilst world events have tested that bond in many ways, it has also created an opportunity for brands to better understand customer values, make commitments that align to those values, and then deliver on their promises.

By acting with stakeholder values as their guide, brands can demonstrate trustworthiness and drive customer loyalty, employee motivation, and repeat purchases. A Deloitte survey conducted last May shows that 88% of customers who highly trust a brand have bought from that brand again, and 62% of customers who report highly trusting a brand buy almost exclusively from that brand. Meanwhile, 78% of employees who highly trust their employer also feel motivated in their jobs.

According to the “Edelman Trust Barometer,” consumer trust in businesses to “do what is right” averages only 53 percent globally. The report states that banks and other financial services firms are the least trusted industries for the second straight year. Only 45 percent of respondents trust financial services firms to do what is right. And even the best-performing industry—technology—garners the trust of only 79 percent of those surveyed worldwide. This status quo is not sustainable, from a customer or business standpoint.

The need for a trust-based relationship can’t be denied. But marketing executives who want to build customer trust have one question: How?

It starts with building a framework and guiding principles, which can be translated into specific actions for employees to take during interactions with customers. In their book The Trust Paradigm, Geoff Hudson-Searle and Mark Herbert identify six drivers of trust based on intent and competence that any organization can operationalize:

• Empathy
• Accountability
• Transparency
• Customer experience
• Employee empowerment
• Employee recognition

Building trust requires cooperation among multiple functions, including product development, information security, talent, and marketing strategy, among others. However, coordinating trust efforts across disciplines can be challenging, since different roles are responsible for different activities across the enterprise. While some functions, such as marketing strategy, have a clear owner, ownership of others, such as product road map and corporate culture, is more distributed across the C-suite.

Some companies are addressing this fragmented trust environment by establishing new roles that better encompass the multiple facets of trust, such as chief trust officer. This represents an important shift in mindset based on the acknowledgment that trust is an enterprise wide issue requiring executive-level coordination.

Organizations can take the pulse of their trust efforts by considering four components of trust, as identified by a Deloitte survey: humanity, transparency, capability, and reliability.

Together, humanity and transparency characterize a trusted brand’s messages, while capability and reliability guide that brand’s actions. Marketers can bolster trust by isolating each of these signals, identifying areas for improvement, and ensuring that brand messages match actions.

As organizations begin to address trust more holistically, marketers can help drive change by shifting the focus to values. While brands have historically considered demographics such as location, age, and gender when segmenting audiences and crafting messages, such categories are, at best, a proxy for how customers may act. By pivoting from demographic- to values-based segmenting, brands can more effectively influence customer behavior. Segmenting by values establishes an empathetic connection, which can make people more open to trusting a brand’s intentions, according to Deloitte’s Values Compass research. Further, by understanding people’s values, brands can ensure that the promises they make align with what their audiences care about most.

The Values Compass research shows that most people share some combination of eight cardinal values: ambition, trying new things, curiosity, sharing with others, belonging, caring for others, control, and learning new things. Among those values, belonging and control have risen to the forefront of many people’s minds during the pandemic, and trust is connected to control. In fact, a 2020 Deloitte study found that, across population demographics, control increased in importance by 31% after COVID-19 became widespread.

To be able to deliver on their promises and meet customers’ evolving, value-based needs, brands need to align their intentions with their actions (or competency). This depends on cooperation among all members of the C-suite—not just the CMO (or even the newly appointed chief trust officer). Here are some steps all leaders can take to steer their organizations toward more trusting relationships:

Enlist everyone. While clear functional owners exist in most organizations, securing trust requires collaboration. This means developing cross-functional teams that align on trust-related KPIs, assigning ownership for those KPIs, and developing a road map for closing the gap between intentions and competency.

Choose trust competencies wisely. How a company demonstrates trustworthiness may depend on organizational goals. If, for example, customers value transparent and ethical data usage, it may be important to incorporate straightforward messaging on how the organization will use and protect customer information.

Expand the marketer’s toolkit. It’s hard to deliver on trust when the marketing department mirrors the skills of an ad agency. Delivering holistically on trust depends on talent with a wide range of skill sets, including expertise in product development and analytics as well as a deep understanding of revenue models.

In the transformative age, with more data changing hands and more technology used in decision-making, trust is more important than ever. It’s trust that enables organizations to create value and capital markets to function properly.

With richer insights from deeper data analysis, you can look at risk afresh. You can make smarter choices, from what you should mitigate to what you can embrace. With trust comes the confidence to make bolder strategic moves. It’s trust that will help you seize the upside of disruption

With the help of technology, companies today sweep up huge amounts of customer data. But they tend to be opaque about the information they collect and often resell, which leaves their customers feeling uneasy. Though that practice may give firms an edge in the short term, in the long run it undermines consumers’ trust, which in turn hurts competitiveness.

To build trust, companies must be transparent about the data they gather and offer consumers appropriate value in exchange for it. Simple legal disclosures aren’t enough, however; companies must actively educate their customers and incorporate fairness into their products and models from the start. Companies that get this will win consumers’ goodwill and business and continued

Finally, within the C-suite, a CEO may see trust as delivering on a pledge to bring innovative products and services to the market, while the CMO may view trust in terms of brand messaging and experience. Outside of the C-suite, trust is contingent on what customers or employees and even partners value most. Regardless of the setting, trust breaks down when there’s a gap between what an organization promises and what it delivers.

With the proper tools and strategy in hand, marketers can help organizations close that gap, build a deeper bond with customers, and ensure a stronger enterprise for the future.

A great quote that provides deep insigt to the topic:

“As organizations begin to address trust more holistically, marketers can help drive change by shifting the focus to values.”