ConsumerLoop #10, September 2001

Trust and Brand Governance

Trust is a curious thing – a firm belief in the reliability, truth or strength of a person or thing. Once this is broken or breached, it is difficult and slow to rebuild – sometimes it may prove even impossible to restore. The construct of trust is one of the key consumer and brand values watched by Through the Loop in its Knowledge Development Programme.

Currently, the deconstruction of trust is pervasive at many different levels of society and across many types of organisations. The very discontinuity of the world today is destroying trust as we once knew it. This applies from nature itself, to governments, the economy, companies and brands. We now need to search for a new construct of trust because the old model is outdated.

Just to put this in context, in 2001, we have seen the effects of nature being turned into an industrial process, the complete lack of engagement of society in the political infrastructure, consumer uncertainty fuelled by a bear market and an uneven economy and, specifically a feeling of the individual being out of control. The world is no longer ‘trust me’ but ‘show me’ because of the forces of globalisation, technological convergence and changes in consumer values.

Trust is important in the online world too. In the online consumer relationship, trust creates a point of entry and allows engagement. In fact, the slow take-up of e-commerce may be a reflection of a lack of trust in the process both in terms of divulging personal information and perceived security.

Restoring the value of trust to the individual will be a significant challenge for the next decade for all types of organisation. This applies both internally to employees and externally to customers and other stakeholders.

In "order to put trust back together again" we need to put in place a more contemporary model. New forms of governance are just the tip of the iceberg for all organisations. Mandatory values of behaviour are trust, transparency and openness. The perception of these three elements should be a point of focus.

Trust – a firm belief in the reliability/ strength of a company and brand is the foundation-stone on which a relationship is built. A failure to meet expectations, or a failure to perform undermines trust. Some companies have the benefit of trust as a part of their brand identity. To name but a few examples, Boots the Chemist, Johnson & Johnson, Volvo, Virgin (in some areas) and Nordstrom. However, we live in more difficult times and it is apparent that there is an abdication of trust by organisations and this abdication can have significant effects both internally and externally.

Transparency at all levels of the value chain will be important. There is no point in being "whiter than white" at one point of the value chain and dirty at the other. Dissonance at different levels of the value chain is a recipe for disaster, upstream must match downstream and vice-versa. Ethical and environmental principles are involved here now. For this reason, delegation to third parties must be carefully handled. Through the Loop expects that transparency will become more and more critical especially for food and beverage brands and products with sourcing arrangements from the third world.

Openness towards employees and other stakeholders is also becoming a greater requirement. Voluntary disclosure of a wide range of corporate activities is considered to be necessary. Unclear messages result in the consumer being confused and looking for an appropriate source of authority. This is often dangerous and opens the door to pressure groups – and yet another interpretation.

Now that we live in a new era, described by Hamish Pringle in Brand Manners, as intimacy of information, trust is set to become a defining characteristic. Corporate conduct is now but "a click away" from exposure. Understanding this and getting to the core issues for your organisation in the context of your own brand will enable a way forward.

While corporate governance is a well accepted principle, it is apparent that brands will also need to be profiled and audited in the light of the values of trust, transparency and openness. Brand governance will need to come into play.

Brand governance is an emerging field and companies are looking for new processes to quantify and qualify the pillars for various stakeholders. Brand governance is about driving greater accountability at all levels within an organisation.

From an internal perspective, a brand governance audit should look at how employees are involved, committed and trust the company. New employment rules of short term rather than long term contracts, more temporary and interim staff and more difficult employment conditions undermine trust and therefore loyalty. Openness and transparency should allow greater employee empowerment. The flows of information around the organisation are also a critical dimension. Qualifying and quantifying will allow companies a much fuller understanding of their own internal marketing processes. Getting to the dynamics of internal marketing will prove to be an important part of brand governance.

The other role of brand governance is to look at all the facets facing external stakeholders and the roles of trust, transparency and openness. Again there needs to be a process of qualification and quantification. Perhaps the core attributes are missing, or in the worse case scenario, have been undermined by corporate action. Brand governance needs to measure the gap to be closed.

Through the Loop expects to be involved with the processes of brand governance in the future. Brand governance lays the foundation for corporate citizenship (internally and externally). Finally, closing the gap between the desired values of trust, integrity and openness and actual should be a part of corporate objectives.

Through the Loop is now looking for best practices in this area. Our own research for clients has shown that consumers are learning more about companies and are clearly interested in how they behave. This is starting to affect how they make brand choices. The need to develop brand governance will be an issue that has the ability to make or break companies and brands.

• Introduce brand governance process to align internal and external behaviour.
• Establish qualification and quantification.
• Communicate the results of brand governance to internal and external stakeholders. It should be noted that "telling" people that they should change their behaviour does not change their attitudes. Effecting attitudinal change is critical.
• Establish a plan to move forward towards the mandatory values of trust, transparency and openness. Note where interim steps may need to be made.