Although it involves risk, human beings have a very primal need to give and receive trust. As author, playwright, and part-time spy Graham Greene put it: ''It is impossible to go through life without trust: That is to be imprisoned in the worse cell of all, oneself.''
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No greater evidence of this need to make a connection exists than the popularity of various “social networking” sites such as Facebook, MySpace, and LinkedIn. In each case, individuals not only puts themselves out there for the world to see — an act of trust in and of itself — but they also trust that the people they know will lead them to others who can also be trusted, thus expanding their world beyond the geographic, socio-economic, and political boundaries that have traditionally defined our social circles. In fact, that is the purpose of such sites — to make connections that otherwise would not be possible.
Still, trust at the social level is relatively easy to establish. After all, we have a history with the people who are part of our inner circle, with “performance metrics” sometimes established over a lifetime. We know what to expect from them, and they know what to expect from us.
At the business level, it has never been so easy. Think about the huge leap of faith merchants took roughly 500 years ago with the establishment of the “Silk Road” between Europe and Asia, the overseas trade routes between Europe and the New World, and other long-distance trading. Until that time, trading was a fairly immediate activity. You give me rice today and I’ll give you milk today; you give me an axe head today and I’ll give you gold coins. And so on. There was an element of trust involved — you trust that the milk I’m giving you is fresh and I trust that the rice you’re giving me is edible — but the immediacy of the transaction meant that little trust was required beyond it.
Long-distance trading, on the other hand, required different rules of trust due to two things: time and infrastructure. It took months to travel back and forth between East Asia and Europe, while cargo-laden ships and caravans were expensive to operate and protect. Buyers had to trust that their shipments would arrive on-time (or at all) and in good condition; sellers had to trust that payments would be good. It was a long way to go if either side didn’t fulfill the terms of the deal. Trust, by economic necessity, went from existing in the present tense to existing in the future tense.
This was the way of the world for the last 500 years. While various improvements were made along the way, the model still held. Buyers and sellers built the trusted networks based on long-term experience and their contacts, and conducted business much as they always had.
Then the Internet and global e-commerce arrived. Practically overnight the market for just about anything extended to include the entire world. The global business economy and the infrastructure to support the aspirations, abilities, and energy of more than six billion people continue to expand. But the services, support, and operations management to enable this expansion, while maintaining the high level of trust required, are not growing in lock-step. If anything, their expansion is flat at best. And here’s the rub: the new growth is not linear. It’s exponential.
All of this has a direct impact on perhaps the single most important element of business today: the customer experience. Customers don’t care what your system challenges are, how complex your infrastructure is, or how many resources you had to divert to other projects to keep the business competitive. They only want to know that when they provide their credit card or purchase order number that the transaction will be completed in a timely manner and the products or services will be delivered in line with their expectations. In other words, they want to know they can trust the transaction and their trading partner. In this sense, they are not much different than customers 500 years ago — or 5,000 years ago, for that matter.
Exponentially expanding business puts a strain on that customer experience. With the type of volume that is demanded today, it becomes increasingly difficult to offer both the new and more exciting interactions customers want while maintaining the infrastructure. There are only so many hours in the day, and something has to give. And if you try to do too much, sometimes everything gives.
So how do you decide where to place the focus in this chicken-and-egg scenario? Two years ago the always-insightful Geoffrey Moore wrote a book called Dealing with Darwin. It dealt with this issue from a strategic point of view, breaking the business into core versus context. According to Moore, core is anything that strategically differentiates your company. Context entails the processes required to fulfill commitments to stakeholders. In the military it is called the tooth-to-tail ratio. Infrastructure (the tail) is that thing you drag around after the attack units (the tooth). It’s what slows you down and gets you killed.
If you have to choose one, it makes more sense logically to place the focus on the tooth, the core, the thing that differentiates you. If you can’t manage the rest, then you find someone to do it for you.
One of the keys to the dominance of the Roman Empire was its ability to build roads. These roads made it easier for the Romans to keep in touch with the provinces, move armies, and generally be more nimble than previous dynasties — an important consideration in a time when the speed of communication depended on the speed of a horse. Once roads became the norm, however, they were no longer a strategic advantage and thus fell far down the list of Roman priorities. They were no longer core. They were context.
In today’s business world a lot of emphasis has been placed on process improvement. At one time, just like the Roman roads, process improvement offered a strategic advantage. But it is no longer enough. Process improvement is now merely context.
Instead, we also have to add intelligent service design into the mix if we are going to secure the trust of our customers. Service design must be driven by customer and user feedback, which is very different than process-driven feedback. Let’s look at a real-life example.
Suppose you go to a very nice restaurant that has had great reviews, both from the food critics and your inner circle of trust. You are willing to wait a half hour or even an hour to get in because of your expectation of how good the food will be. These are process-driven decisions. Once you’re in and have eaten, however, you are unhappy about waiting five minutes to get the check after you’ve signaled the waiter that you’re ready. That is a service-driven decision.
Process is not enough. The synergy of process and service is what’s required to be successful. Intelligent process design will get you in the game, but it won’t keep you there.
In order to build a trust network with your customers, process must be leveraged by the customer’s immediate experience — the benefits tied to the emotional rewards gained by those engaged in the service. Going forward, successful organizations need to place their limited resources against their service offerings (the core) in order to deliver a customer experience that meets or exceeds expectations. They will be wise to outsource the infrastructure and processes around those offerings (the context) to organizations that specialize in that area. The synthesis of the two is what will ultimately win the trust of customers and keep the organization within the circle of trust.
Today, trust is the new money. It is the commodity that fuels business and decides who wins and who loses. As Graham Greene said, we are predisposed to trust. We want to trust, we need to trust. Just as it has always been, however, if the buyers’ experience tells them they can’t trust a seller, they will quickly steer their business elsewhere. And unlike money, once trust is lost it is extremely difficult — if not impossible — to recover. Place your focus on intelligent service design, and, like the silk traders of old, you will be amply rewarded.
About the Author
John Bostick is president and CEO of dbaDIRECT, which provides data infrastructure management services to Fortune 1000 and Private 500 firms including SC Johnson, Procter & Gamble, Timberland, Hanesbrands, Warner Brothers, Duke Energy, and Old National Bank. He can be reached at john.bostick@dbadirect.com.
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