Three professors at Wharton University recently conducted a study on trust which yielded some interesting results that can be applied to business. Some of the findings might seem like common sense, but they merit a closer look.
The study explored the important role trust plays, not just in our social lives, but in our business lives as well. “Trust is the social glue that holds things together. It allows us to engage in social and commercial ventures,” says co-author Maurice E. Schweitzer. “You can’t contract everything. We develop relationships that are based on trusting that things will work out.”
The study looked at a scenario where trust was harmed by untrustworthy behavior as compared to deceptive behavior, and how subsequent trustworthy behavior, apologies and promises influenced trust recovery. Probably not surprising to most of us would be the finding that trust was more difficult to reestablish when deception was involved. In fact, a violation of trust involving deception “causes significant and enduring harm”.
Trust was difficult to reestablish in both scenarios, a simple apology and promise not to do it again didn’t speed along the recovery process when deception was involved. For long-term business and social relationships, this can translate into a very slow “recovery” period. However, a combination of observable trustworthy actions and sincere apologies by people trying to repair broken trust can go a long way.
The study and supporting paper, “Promises and Lies: Restoring Violated Trust” will be published in an upcoming issue of Organizational Behavior and Human Decision Processes. You can download the paper by clicking here.
The majority of business owners would answer with a resounding “yes” and research appears to back that claim up as well. For example, The Institute of Business Ethics (IBE) conducted a research study, “Does Business Ethics Pay?” and found that companies displaying a “clear commitment to ethical conduct” consistently outperform companies that do not display ethical conduct.
Many may dismiss the relevance of ethics because “if you can’t measure it, you can’t manage it” and that may at first glance appear true. However, ponder this question: “What would be the loss of business if your reputation for quality and service were to suffer?” Chances are you couldn’t afford it.
While many companies have established a written ethics policy, you may not yet consider its relevance because you are just starting out or have no employees. Even so, there are several elements of ethical business practices that you can incorporate into your business-doings including:
Respect: Treat everyone you meet with the utmost of respect. Regardless of differences, positions, titles, ages, or other types of distinctions, always treat others with professional courtesy and respect.
Trust: Realize that customers want to do business with a company they can trust. Businessess that incorporate trust as the center of their organization are always easy to recognize by a client. Trust involves a client’s ability to rely upon your character, ability, strength, and truth in business.
Open Minded: As the owner of your business, you want to continually improve and grow your business. In order to do this, you need to maintain an open mind. Never hesitate to ask for opinions and feedback from both customers and employees. Sometimes, you may not like what you hear, but you then have an opportunity to change.
Obligation: Take every opportunity to do everything in your power to gain the trust of a customer, particularly if something went wrong. If it’s in your power to correct things and make it right, do so with hesitation. Honoring all commitments and obligations are essential to continued operation.
Clearness: Review all printed materials from employee handbooks to marketing materials to ensure that they are understandable, precise and professional. It is critical that they do not misrepresent what you do and what you can deliver.
Sometimes, it may be difficult to determine whether or not you are behaving in an ethical manner. In situations like that, you may want to consider the simple, but to-the-point manner in which Abraham Lincoln gauged his approach to ethics. “When I do good, I feel good; when I do bad, I feel bad. That’s my religion.”