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We aren’t halfway through 2020 and it’s been a year of dramatic change for the World. The COVID-19 crisis has affected every person, government, industry and business sector on the planet. Organisations might have Disaster Recovery or Business Resilience plans, but few were prepared for this. There have been losers, winners, and too many of us have died. Most of us have been living semi-isolated in lockdown for at least three months. Many of us have experienced the shift to working from home and collaborating using new technologies for the first time. Many of us are now beginning to be frustrated and impatient for change, as our various countries are starting to lift some lockdown restrictions, reopen shops and markets, change travel restrictions and restart (or is it reset) our economies. All organisations and businesses are dealing with new processes and protocols to handle social distancing and minimising the spread of the virus. In all of this, Trust has been a huge ingredient on many levels – trust in our governments, health services, communities, each other. A business having trust in their employees, and employees trusting their leaders and managers. At Bloor Research we position trust end to end across the organisation as a foundational component of our Mutable Business™ framework for becoming a better business. Trust is so important, should it be on the balance sheet?
First, what is it? Trust can be defined as belief in the reliability and integrity of something or someone. As society’s most precious and fragile asset, it has been stretched to straining point by the pandemic. Interestingly, the 2020 Edelman Trust Barometer Spring Update shows a double digit rise in our trust in Government between January and May this year. We, the public, are relying on government to protect us, and certainly here in the UK you can feel an almost wartime spirit, with our backs to the wall, reminiscent of World War 2. The report goes on to say:
The Spring Update shows that 67 percent of respondents believe that those with less education, less money and fewer resources are bearing a disproportionate burden of the suffering, risk of illness and need to sacrifice in the pandemic, and more than half are very worried about long-term, Covid-related job loss.”
The shift to working from home (WFH) has been managed by most organisations in days and weeks rather than months or longer. Any organisational concerns over trusting employees to do the job from the home environment were put to one side as there was no alternative. The reality has highlighted that, for many, the transition works. Employees like the added flexibility. The lack of commute time translates into more free time and then in most cases, a more productive, happier workforce. Of course, WFH is not for everybody, and many organisations are in catch up mode in dealing with the mental health and wellbeing issues around a very distributed workforce without as much personal contact and attention. Using the new technology, dealing with data away from the corporate environment, and a COVID related spike in email phishing attempts all bring new challenges to deal with in keeping data secure. Two-way trust permeates all of those issues and characteristics.
Trust has become an essential intangible asset for the organisation, and an essential component of leadership. Trust promotes collaboration, cooperation and effectiveness in workplace relationships. From the human capital perspective, trust is both a resource and a skill that creates energy, creativity and innovation in the workforce. Leaders can’t be effective without it. In a relational context it engenders positive expectations and respectful human behaviour. Trust is one of our invisible assets, commonly referred to in accounting terms as intangible assets. These are resources that cannot be seen or touched but still provide value to the holder. These invisible assets might include the value of a brand, a logo, or ideas. Some may appear on a balance sheet if they have an identifiable value and useful lifespan. For most intangible assets, though, they are absent from financial statements because they do not have a price that can be used to assign fair market value. Should trust and trustworthiness be on the balance sheet? They have that level of importance. Trust is hard to engender and easy to lose. No business can operate effectively without it. Does that make it priceless?
As we’ve explained, trust is a key component of our “Mutable Business™” approach to help businesses position themselves as being in a permanent state of reinvention. Contact us for an assessment or to find out more.