Trust in business – plausible or unrealistic?
Trust, or lack of, has been in all the Australian news media in recent months. Mainly on a political level, and has been singly attributed to the large swing against the government in the recent Queensland election. Suffice to say, whether you follow politics or not, it is widely acknowledge by most pundits as being on the minds of voters on a Federal level too.
But that is Politics….. right?
I’m not here to say if it is or it isn’t. Personal views abound, and it is a discussion that is often heated as much as it is pointless. However, in the overall scheme of things, trust is central to the way people and business is perceived.
Trust in business is not entirely different to politics. The business of Government is just a larger scale of our own business. And like government, we can actually change the public’s perception of us, largely by our conduct. This of course extends to our staff too.
Mari Sako from the London School of Economics and Political Science posed a similar question back in 1997.
Sako wrote a paper on the question of whether trust improved business performance. Apparently, back in the 90’s there was a developing belief by individual businesses that trust would enhance business associations which could then improve business relationships, which would then be the catalyst for better business performance. Previous studies in ’85, ‘91 and ‘96 identified trust as ‘an important component which makes partnerships, strategic alliances, and networks of small firms successful’.
The combined studies discovered that trust between companies was important in a competitive environment, and made the business of doing business together easier in a high-trust environment rather than a low-trust or no-trust environment. Trusted relationships develop into trusted partnerships, which in turn produce positive outcomes for both parties. Trust then becomes the basis for loyalty.
Clearly there is a correlation with trust in business.
One of the unique things about trust is that it can’t be purchased. It has to be earned.
Those of us who have a very good relationship with our suppliers could probably pinpoint the turning point in our relationship from being ‘just another supplier’ to our ‘main supplier’ as being one of trust. It is of course a two way street. Both have to earn the trust of each other.
Sadly, I don’t think some of our wholesalers subscribe to the theory of trust, working with their customer base or forming long term partnerships. Loyalty seems out of the equation altogether.
Over the years our industry has seen wholesaler trends develop which, to put it bluntly; actually hurt their main client base - us.
As an example, many years ago our shop was a major player supplying signage to the movie industry on the Gold Coast. Along with several other sign shops, our shop competed for the work in supplying materials and reproductions for the American cable TV industry. It wasn’t a bad business to be in, it enabled us to employ a few people, we had a great working relationship with the studios, and we were buying large quantities of products from our main supplier at the time.
The supplier seemed content to work with us and the other shops. We had, I thought, a good relationship. Then, for whatever reason, they decided to approach the studios directly and sell them products, bypassing the sign shops already doing considerable business with them. Our sources at the time told us that they were offered materials at our buy prices, and a 30 day account.
If you were the studio, what would you do?
So, several sign shops lost a niche market overnight. The supplier was happy to sacrifice our relationships for money. It was the start of the trend that has cost many of us at the coal face dearly.
After that, we saw the motor racing industry targeted, and of course more wholesalers got involved to keep market share. Calling it sponsorship or whatever they liked, the real losers were us, the sign shop. I lost two race teams within a year.
The cancer that was this attitude of sales at all costs then spread into the transport industry and other smaller markets. The more it happened, the less trust and faith was attributed to our wholesalers.
It has become apparent the new market that one of our multi-national wholesale suppliers appears to be targeting now is the mining industry.
Several disgusted members of our sign community have contacted me in recent weeks, urging me to look up ‘cqexpo.com.au/index.php/list-of-exhibitors’. The blurb states “The CQ Expo is an exciting new event for the Rockhampton region which will showcase the extraordinary opportunities that are developing as a result of the Central Queensland mining boom. It is designed to support the Queensland resources industry while providing an excellent environment for businesses and visitors to network, market and generate sales, leads and industry contacts.”
Going down the list, you’ll see an industry wholesaler listed.
So, instead of getting behind those sign shops that support them, once again we see a wholesaler who clearly doesn’t value trust, long term partnerships or even working with their client base.
I’ve even had other suppliers express total disbelief that they would ‘soil their own nest’ so blatantly.
The sign shops that I’ve discussed this with have also been totally gobsmacked that this particular wholesaler is prepared to undermine the work of several hard working sign shops that have good working relationships with the mines in the area. This attitude of undermining their client base puts a lot of jobs and livelihoods at risk.
They could also shoot themselves and the rest of the wholesale industry in the foot.
With the emergence of Chinese suppliers keen to get a foot in the door with products at a more competitive price, they may well push their customer base away to these keener importers.
They may also create such bad blood in the industry that it will cost them some serious credibility. They’ve certainly given other wholesalers a free kick when their reps call in on shared clients, and I’m sure the opposition reps will gladly draw their client’s attention to what some have labelled as underhanded. I’m not sure I’d be too keen to be their rep in that part of town right now either.
Something that has not gone unnoticed by many is that, according to the last exhibitor listing for the 2012 Gold Coast sign expo, this same wholesaler has chosen not to support the industry and will not appear at the sign show, but instead have decided to invest in an expo that seriously undermines their own client base.
So, to answer the question ‘Trust in business – plausible or unrealistic?’ I’d say from my own experience it is definitely plausible, even achievable. But it certainly seems unrealistic with some of our present company in the industry