Relationship transformation: The role of trust in accelerating innovation and digital transformation | ZDNet

The pandemic has thrust a decade’s worth of digital transformation upon organizations within months. Remote work, e-commerce, cybersecurity, with every organizational transformation, companies had to learn the art of agility and triage as a matter of survival. Now in a new year, and facing an undefined “next normal,” companies can no longer afford to solely react to every new shift that emerges. Organizations must also employ a proactive approach to digital transformation, one where “digital” becomes a differentiator and a competitive advantage. One of several key areas to prioritize digital investments and business products/services and processes in this regard is customer engagement and relationship management.

Recently, we introduced the concept of Relationship Transformation (RTx) as a way to put people and purpose at the forefront of digital transformation initiatives rather than the technology itself. As people are at the center of impactful and lasting transformation, we emphasized trust as the foundation of all successful relationships, including employees, customers, stakeholders, and communities. 

The first step any company must take in its own RTx journey is to prioritize relationships. But to do so meaningfully, it’s vital to understand what relationships should look like, supported by a supporting digital stack, based on the four components of Trust. The second step in RTx is for companies to assess their own trustworthiness and to develop a plan for improving it. Why is this important? Trustworthiness is an easy trap as it’s not difficult to assume that trust is a given. But the pandemic is revealing otherwise. 

According to research conducted during COVID-19, 90% of business customers and consumers say how a company acts during a crisis reveals its trustworthiness. And, 31% already trust a company less because of its response to this year’s crises.  

To move forward, we offer up a simple Trust framework that can be used to perform that assessment.

The Elements of Trust

How we assess trustworthiness is not through a single lens, but includes both ability-based and character-based elements as follows:

Competence – The ability of organizations, their people and their technology to do what they say they can, to live up to their promise. Customers do their research, but ultimately they have to take a leap of faith to buy a service or product based on their intuition and claims of competence. Customers do not remain loyal if a company fails to deliver against its promise at any stage of the journey. Products and people must deliver, at every stage, throughout the lifecycle.

Reliability – The ability of organizations, their people and their technology to do what they say they will, when they say they will, every time. In a complex world we want predictable performance without fire drills or heroics. We entrust our business to those we know we can count on. The goal is to become indispensable.

Integrity – The character of organizations and their people that drives them to tell the truth, to be transparent, and do the right thing without regard for the consequences to them. Integrity is the most defining element of trust, meaning that the erosion of trust from a lack of integrity is a lot more difficult to repair than from missteps in competence and reliability.

Empathy  – The character of organizations and their people that drives them to put the interests and success of their customers first in their decisions and actions. We are used to working with companies who put their own success first but our relationships with them rarely move beyond the transactional.

The Domains of Trust

An assessment of a company’s trustworthiness needs to apply these four trust elements to both the human and the technological parts of their business:

Human Domains (Individuals and Organizations)

On the human front, customers typically interact with individuals within the company — salespeople and service representatives most commonly — and so it is vital that those individuals are given all the training and tools necessary to build and continually nurture trusted relationships with their customers. Meanwhile, the leaders of the company are typically seen as its representatives or custodians, so they too must be enabled to personify competence, reliability, honesty and empathy.

The greatest efforts in building and nurturing trust will naturally be spent on the relationships with customers, focusing on marketing across all channels, on sales and service, as well as on the performance of the company’s products or offerings themselves.

Technology Domain

On the technological front, companies will want to focus their assessment on the secure and ethical use of customer data and on its practices of personalizing engagement, products, and services, nurturing relationships, and delivering new value. 

In a world that is increasingly connected, collecting, storing and using data intelligently is essential to companies who want to understand their customers, provide personalization to them, and even anticipate their future needs. This is why RTx is bringing about a renaissance of CRM platforms. 

But not all companies take their responsibilities for protecting that data as seriously as they should, as we all know after a succession of high-profile breaches. This has led 63% of all customers, both individual and business buyers, to question what companies are doing to protect their data (security) and what they’re doing to honor their data (ethical use). Companies with clearly defined and well executed trust strategies differentiate themselves from others who are leaving trust up to hope and good intentions.

The Trust Framework

Any organization can assess its own trustworthiness and develop a plan to improve it by asking itself how it currently performs in each of these aspects and what it can put in place to improve. Figure #1 below shows a simple Trust framework that can be used to perform a trust assessment and diagnostic.

The framework can be used as a tool for reflection and for provocation, or more prosaically as a current state (as is) assessment and a future state (to be) design or plan. Companies can ask themselves how well they feel they are doing in each element/domain space, they can ask their customers how well they are actually doing, they can ask themselves what they are already doing to build and nurture the elements of trustworthiness and what more they could be doing.

Figure #1: The RTx Trust Framework

Using the Framework

The framework is intended to be used by filling in each cell with an initial, as-is assessment, or with a desired, to-be goal, of each domain’s performance across each trust element.  For example, as part of an initial trust assessment, an organization may consider whether its employees are able to demonstrate competence to customers or other stakeholders in any of the following ways;

Do they have easily shareable profiles or resumes that accurately reflect their skills and previous experience?

Have they earned reviews from other customers or captured feedback from them? 

Do they have specific, relevant qualifications from industry, their own company or from an accredited program?

Do they have industry awards or other recognition for excellence?

Does the organization have effective training programs, mentors or apprenticeships so that inexperienced people learn from the best?

Special feature

These are just a few of the questions that they can use as a basis not only for assessing current state but also for defining ways in which they can improve. A comprehensive trust strategy includes both an internal assessment and a repeatable external one so a company can track the efforts it is putting in place and the impact they have.

Over time, a company should be able to measure the impact in quantitative terms including customer retention rate, customer lifetime value, net promoter score, etc.

Applying the Framework to Enhance Internal Relationships

The framework can also be used to address the problems of internal silos and to improve or transform the relationships between departments, functions or business units, as well as between the company and its employees. It can be easily modified depending on the relationships and the organizational entities that need to be addressed.

We have not explicitly included an Offer/Brand domain within the consideration of a company’s trustworthiness, simply because the relationships between people and brands are typically more complex than the four elements of trust cover. Customers do, however, assess brands by ability-based elements and care whether they function reliably as advertised, and so the framework could be easily modified to include this domain if desired.

In Relationships We Trust

The digital transformation required to thrive in a post-COVID world is Relationship Transformation. And for mutual value to flow across and through your relationships, they must all be powered by trust. Customers are after al, demanding trustworthiness and they’re paying attention. When you demonstrate trust, you’re demonstrating it to your entire ecosystem. It’s a foundation built upon capability, dependability, integrity, and empathy.

Trust breeds customer loyalty, which leads to increased retention, lower costs of management and acquisition, higher spend per customer, higher likelihood to buy new products and services, and higher lifetime value. And trust also breeds employee and partner loyalty, leading to higher retention and higher satisfaction among both groups, as well as lower costs of attracting and acquiring high quality talent — another critical concern for CEOs. 

Combined, prioritizing trust and relationships gives digital transformation and business strategy a higher purpose, one that accelerates modernization and growth.

This article was co-authored by Henry King, an innovation and transformation strategy leader at Salesforce and author of Flow by Design, a new paradigm for the design of customer experiences and business processes in a connected world. King is a former CIO with over 35 years of consulting and executive experience, both in the US and internationally, with expertise in innovation, design thinking, and information technology. He has been published in Fast Company, Huffington Post, ZDNet, and Businessweek. King studied Classics at Oxford University and teaches postgraduate innovation and design classes at the School of the Art Institute of Chicago and the Institute of Design.