Stakeholder trust: why it matters and how you can earn it

We know stakeholders are pivotal to business success. Their support rests on how much they trust an organization to deliver on promises made. The experience of fairness towards stakeholders is the underpinning of establishing trust, as a few scenarios will show.  

An employee who starts a new job expects to have alignment on was promised about the job, the team and more importantly the culture that the brand espouses and senses it from whether one feels welcomed, included, supported and made to feel important. These might seem like straightforward asks, yet research continue to highlight that there is wide gap between what employees want and what employers think employees want. And in this case very soon we are left wondering why new employees leave shortly after they join and reconcile our reasons with job market dynamics.

When employees leave jobs they take their experience, skills, and relationships, internal and external, with them. They also take a mindset, an opinion about their former workplace that is bound to be disseminated through industry circles via one on one conversations, social media, and reviews.  

Let's look at another stakeholder perspective, one less explored: that of a vendor. With supply chain disruptions during the peak Covid years, many vendors experienced a dual faceted new reality - uncertain inventories and greater leverage with the companies they supply to. This dynamic is shifting again, for example in retail and elsewhere the landscape is uncertain.  

A vendor who has confidence in your long term commitment, who knows you may bargain for the best price as any self-respecting business would, but understand fair pricing, a vendor who has seen your business is willing to walk the talk on promises made, is more likely to stick it out through the ups and downs of supply & demand surges and dips in turbulent times. A vendor who doesn't see you as a committed partner is already looking already looking at providing your competitors better terms.  

These are just few possible scenarios. They both spotlight a few things. The business world - already riding trends of disruption and change coming out of Covid - is in a uniquely fluid, sometimes volatile state. Negotiating the uncertainties surrounding us, and transforming them into opportunities, demands better stakeholder relationships than ever before. But are businesses really catering to all stakeholder groups in these crucial times?  

Yes, all stakeholders matter

Studies show that, while businesses value the idea of serving multiple stakeholders, in reality most businesses tend to focus on customers, investors, and employees. However, trust in an organization and fair experiences matter to all stakeholders. And the experiences they have with an organization in turn have a kind of butterfly effect across the business ecosystem, as accounts of their experiences flow through highly connected digital spaces, and through real-world word of mouth.  

Unfair experiences can spell business disaster

For better or worse, we live in the era of virality and algorithms. And negativity all too often races along the forward/share/retweet grapevine in a way the everyday achievement of business as usual does not. It takes just one negative review, one irate customer, aggrieved vendor or disgruntled employee to speak out. The resultant pile-up can spell a branding disaster and translate to lost business.  

Of course, there are ways and means to fire-fight in such a situation. But prevention is better than cure. High trust capital and a reputation for fairness don’t eliminate the possibility of a negative reaction stemming from somewhere at some point but they insulate you against a great deal of the fallout and ensure a fair hearing to cushion you when times are rough.  

You get there by consistently delivering fair experiences

As a Deloitte study states1  ‘a concerted, strategic approach is one of the only ways to ensure it (trust) remains top-of-mind.’ Fostering trust capital by delivering fair experiences is clearly a key driver in business growth but it is not something that can be implemented overnight or applied as a band-aid solution. A careful stocktaking or diagnostic of an organization’s current trust ratings, across internal and external stakeholders, forms a crucial starting point; this intention has to be followed through with aligned, result-oriented actions across functions and departments. It’s not a quick transform, but it is one that all the research points to as a key way to differentiate a business in today’s environment.  

Negotiating challenging times takes teamwork. More than ever, you can be assured of weathering turbulence and reaching the upside when you deliver fair experiences all around and convert all your stakeholders, internal and external, into true co-creators and partners in the journey of mutual value creation.