Trust is a very emotive issue, subject to interpretation.
The closest definition of trust in business would be that one should have the
confidence to partner with another party whereby one shares his/her proprietary
information, intelligence and practices.
As per the 14th
Annual Edelman Trust Barometer, Indian institutions rank second from the
bottom among 27 nations on the basis of being trusted by other nations. The
annual survey captures trust levels in four key institutions globally and for
each of the 27 countries. The institutions surveyed are Government, Business,
Media and Civil Society (Non-Governmental Organizations). China is just one
percentage point ahead of India which is insignificant, if that helps Indians
draw some solace. But the point remains on why Indian institutions
(companies headquartered in India) are not worth trusting or is it
that they’re not getting the trust they deserve. I’d like to believe the
latter.
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| Courtesy Edelman Trust Barometer 2014 |
The fact that many Indian brands figure in the most valuable
brand, according to 2014
Brand Finance Global in the world effectively does away with the argument
that Indian companies aren’t worth trusting. No brands can attain such value
without being trusted.
Then why are most Indian companies not getting the trust
they deserve?
Conduct
One reason is clearly owing to the conduct of some Indian
corporates that has earned Indian businesses and indeed the country a bad name
– Satyam Computer
Services (wherein its promoter B. Ramalinga Raju is
serving his jail sentence in a multi-million dollar scam, arguably India’s
biggest corporate fraud), several telecom companies involved in the notorious 2G spectrum scam are
just a few examples.
To an extent, our tarnished image is the doing of our own
brethren. Of course, one can argue that even America
has had its fair share of corporate fraud with Enron, MF Global, WorldCom
among others. So, the question should be whether Indian corporates have put in
place the necessary checks and balances to avoid such occurrences. Time will
tell.
The second reason could be many questionable corporate
practices of Indian businesses. While it would be incorrect to paint all Indian
businesses with the same brush, many companies do remain predominantly
family-run with promoters ruling by fiat. Indeed, the erstwhile Roman Emperors would
feel quite at home at many of our corporate houses. Industry forums are buzzing
with discussions on corporate governance but when talking to investors and employees
at these companies, the usual response is that the pace of reform is too slow
to have any positive impact.
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| Courtesy Edelman Trust Barometer 2014 |
The Values v/s
Valuations Debate
Many Indians tend to opt for
white-collar jobs in MNCs, not just for the prospects of better remuneration
(which isn’t always the case as salaries in Indian companies have caught up)
but for better corporate practices and more conducive work culture. The Edelman
Trust Barometer validates the fact when it shows that Indians trust companies
from America, U.K. and many western markets more than Indian companies. The
fact that Indians don’t trust the Chinese companies is no surprise. This
clearly indicates that while valuations do matter (considering some
BRIC-headquartered companies have very high valuations), the discussion is increasingly
on the values of doing business.
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| Courtesy Edelman Trust Barometer 2014 |
The third (and every Indian’s favourite reason) is that of
rampant corruption in the government where rules are framed in a way to let
those playing dirty get the edge. The 2G scam, coal scam (fondly referred to as
Coalgate) are glowing examples. One tends to wonder what the Ivy League
educated ministers in the Government were up to if they couldn’t get the basics
right. A plausible answer seems to be as Arvind Kejriwal put it-
the problem is not lack of capability of government ministers or bureaucrats,
it’s the lack of intent. And that’s why any external reform effort is destined
to fail.
So, is the end of the tunnel near? Hopefully, India Inc. has
been through the worst and learnt its lessons on the way. Let the corporate
bigwigs start by taking measures that would help in trust-building within each
economic sector. It is when such an atmosphere is created that like-minded
companies begin to work together. For instance William
Procter, a candle maker and James Gamble, a soap maker realized that if
they stopped competing with each other for their common raw material (wax) and
formed one company, they would be far more successful. That meant trusting each other. Thus was
formed Procter and Gamble (today known as P&G) and the rest is history.
Indian corporates need to realize that instead of fighting with one another for
the limited pie, they’re better off working together to grow the pie. And this
co-operation should not be limited to a transactional level but on a long-term
basis. Reputation building, be it for a brand or an industry, is a long-term
play and consistency is key - Consistency in conduct and in communication of
the values. So, communication professionals have an important role to play.
