Why don’t we trust Goliath, but tend to trust David blindly?

Why is it that we seem to generally mistrust big corporations, but blindly trust the small store around the corner? Why is it that there seems to be an undeniable negative correlation between size and trust? And yes, let me put this upfront, there are examples of companies that managed to keep high level of trust when becoming big. But the fundamental question is, why do they manage and not the others? Let me get this straight, this article won’t deliver the answers, but gives a hint and opens up (hopefully) a discussion of what companies need to do as they grow in size to keep the trust in them. How can companies avoid the pitfall of becoming “too big to be trusted”?

As often, it is worthwhile to travel back in time & history, back to the Latin language. In Latin, there is one words that describes it all: “fides”. But “fides” means much more than just trust, it also means credibility, reliability, a guarantee or promise, a credit or a good name, honesty, honor, sincerity and a sense of duty and loyalty. Already at this point, you will understand that if we still project most of these meanings in our understanding of trust/fides today, it will be difficult to gain and keep trust. But “fides” meant much more than just these words, it was a fundamental part of society. I found the following description that – in a few sentences – gives you an idea about the importance “fides” (our trust today) had back in Roman times:

For the Romans, FIDES was an essential element in the character of a man of public affairs, and a necessary constituent element of all social and political transactions (perhaps = 'good faith'). FIDES meant 'reliability', a sense of trust between two partiesif a relationshipbetween them was to exist. FIDES was always reciprocal and mutual, and implied both privileges and responsibilitieson both sides. In both public and private life, the violation of FIDES was considered a serious matter, with both legal and religious consequences. FIDES, in fact, was one of the first of the 'virtues' to be considered an actual divinity at Rome. (https://www.csun.edu/~hcfll004/fides.html)

I believe, this explains it all. But let me point out the key reasons somewhat more clearly:

1. Trust is personal, hence about a person.

One, if not the single most important factor is that we are used ever since to build trust in persons, not companies. Small companies however, often have the advantage to have one single owner. In past times, the streets were full of signs of Meier & Cie, Nordman Brothers, Henderson & cie and Maus & Son etc. If we decided to buy something from that store, a product or service, we bought it from that man or women. We most likely decided first, if we like the persons before buying their products and services. It was about building instant trust to a person. The company was secondary, or not important at all.

Today, big corporations fail to have a visible face on which we could first decide if we should trust them or not. Yes, some CEOs are well known, but they often go as quickly as they come. Think about it, why was Facebook so long completely protected from being mistrusted, even so, it was clear that Data was what we traded in every day and that all the information were used to make money? It is because there is and was only one CEO ever since: Mark Zuckerberg. What Facebook did, no big existing corporation would have been able to achieve with the same level of freedom, because we trusted Mark. Or at least, we trusted little Mark, when FB was still a small start-up. If you followed the recent hearing at US Congress, you might have noticed that Mark was well advised and did a few very smart things to gain “fides” back:

a) it was only him appearing at the hearings and he took full responsibility for the incidence! Yes, that was brilliant. We forgive people quickly, but we don’t forgive companies fast.

b) he made Facebook small again and brought Facebook in the minds of people back to the garage where it started and said that they made some classical start-up mistakes, when they were so enthusiastic about the idea and just went for it. Yes, that was brilliant too. Making mistakes is human and we are more forgiving, if they happened somewhat innocently, when they happened before they knew any better.

Have a look at the share price of Facebook just after the congress hearings to get an idea about how Trust was re-in stored, even so fundamentally, nothing was changed (of course, the usual predictable law suits will be priced in at one point…).

So, trust is easier established when linked to a person. There is only one big risk with this: the person itself. Remember the oil catastrophe in the Gulf of Mexico in 2010: Deep Water Horizon? If you have seen the movie, you might understand that there were a serious of issues leading at the end to the catastrophe, and quite a few companies involved. Yet, to the public it was at early stage only one: BP! BP’s CEO Tony Hayward gave a perfect example of how you should not act (at least if your aim is not to kill all trust). He did everything wrong to destroy instantly all (little) trust that existed into Goliath BP by doing 3 things:

a) for too long, not showing his face on ground where it happens

b) giving irritating statements like “it is only a small tiny dip into a big ocean”

c) once he made it there, claiming that none more than himself, wants this to get over soon, as he wants “his life” back, too. In face of several casualties and threatening the income of many fishers etc, this sounded highly arrogant.

Ignorance, denial of responsibility and arrogance of one man, destroyed the trust in BP big time.

Net, having a personal face to the consumers is important, but it needs to be right person and well advised. Otherwise, it is better to hide. That is why, modern management suggest to not project too much of a companies trust into one person only.

2. Trust is reciprocal and mutual.

Imagine you have a “friend”. But this friend is only calling you, when he or she wants something from you. The first time this happens, you will be willing to help, because you trust and believe in a reciprocal relationship. The 2nd time, you will think the same, most likely. But what about when it happens for the 10th time? At one point, you will lose your trust in a reciprocal relationship.

It is the same with a relationship with a company, it need to be reciprocal, too. If you buy your bread at the same bakery every day, you will expect at one point some special treatment, some attention, a smile, be known by your name or even a special price over time. As such, you will feel that they appreciate you as much as you appreciate their bread. The relationship becomes reciprocal. With bigger companies that sell their products not directly but through retailers, this might become more difficult, but even then, it is possible to make the relationship somewhat mutual. For any big corporation, it is possible to give something back: by being honest, by listening to their consumers, by taking the consumer seriously, by adapting the products even more to their needs, by being responsible in their operations, by being a fair employer, by fairly pricing their products (example: not selling them more expansively in high price countries like Switzerland) etc. To illustrate this with a classical pitfall of many companies, think about customer services: isn’t your feeling that when you buy a product of a company and you have, for whatever reasons, the need to call their customer service, but you cannot reach anyone, that you feel somewhat betrayed already? Don’t you feel left alone? You paid the money, but then they don’t care anymore for your concerns. I believe that in most cases, you could plot a graph showing the correlation between trust and quality of service. In fact, the more questionable a proposition of company is, the more likely you will never reach anyone when calling them, if you have a phone number to start with at all...

3. Trust is transparent & honest.

Whenever we sense that a company is hiding something - regardless how unimportant this fact /information is – out natural reaction is that we tend to mistrust them. Some companies still believe that by shedding some light in some areas is sufficient to gain trust. Classics examples are companies that use labels for some parts of their business but hide how bad other parts of their operations are. Clearly, for small and tiny companies it is way easier to create transparencies: for a local butcher, they might have to control only a few farms they know personally to guarantee the supply chain. Big companies work with complex supply chains and it takes much more effort to create transparency. A great example on how this is still possible comes from Carrefour who launched its first food traceability based on blockchain technologies. Blockchain offers a fantastic possibility to create transparency and trust at the same time, as data is not owned (and controlled) by one company anymore.

http://www.carrefour.com/current-news/carrefour-launches-europes-first-food-blockchain-and-plans-to-extend-the-technology-to

4. Trust is built over time – it is a long-time project

For all managers who believe that they can revolutionize trust in their companies, this is bad news. But whilst you can destroy trust fast, it takes a long time to build it up. Often years, decades or even generations. Therefore, trust must be routed and embedded in the company’s purpose, in its values and not just treated as a changing strategy or even worse, as a one-time off project. Unfortunately, this is still often the case.

In summary, if you are serious about trust, you need to have a long-term horizon and ideally bake it in your purpose, your values, make It personal, transparent & honest and based on a reciprocal and mutual relationship with your customers. If you do so – you have a chance to build-up trust or keep a high level of trust as you grow from David to Goliath. This is the moment when you move from too big to be trusted, to big enough to make a difference.

What is your experience with creating trust in big corporations?