How to Build Digital Trust to Drive Business Performance – Techstrong Con 2023

Good morning. Great to be here with all of you today. My name is Michael bondar.

I'm a principal with Deloitte and I lead deloitte's work on the topic of trust. It seems like a really big word this word trust and we certainly see it quite a bit in our personal lives. We know it.

We feel it our spouse trust us to do the dishes take the kids to school. We trust a mechanic to fix our car. Sometimes we don't think about how important trust is because it is so embedded into our everyday lives.

The reality is it's just as embedded into the business world and the things that happen in our business interactions and processes. The reality is however that we cannot just intuitively process trust related processes and decisions within the business World much more is required. And so today we want to talk about the notion of trust in the business world what to do about it how to address it and how big is it?

Really? as we move forward trust is a priority for the c-suite and the boards. Consider these numbers.

This is a very recent study. We just completed where 94% of global board members state that trust is important to organizational performance. 85% of CEOs agree and 83% believe that action on this topic is needed and urgently.

So there is a recognition of the importance of this at critical element of the organization and that is seen by the highest levels of the c-suite and boards. As we move forward we ask the question. Why do we think that's the case?

Well in part, it could be answered by the notion that trust is waning. Trust is at a deficit. And especially that is the case within the technology sector consider these numbers.

fewer than 40% of B2B purchasers and b2c consumers trust technology brands That's a startling number. three out of four believe that technology vendors often fall short of being honest and we know that 81% of consumers lose trust in a brand after some sort of a breach. So we see the fragility of trust within the technology sector we see it's recognition of being a critical topic by leadership.

So, why do we think that's the case? Well, it's not only the negative side of it. It's also the positive implications of trust.

When you consider some of these numbers. It's clear that trust drives business performance. From a financial performance aspect trustworthy companies outperform competition by up to four times.

In the face of the great resignation the quiet quitting and the volatile labor market that we're all facing nearly 80% of employees who trust an organization. Feel motivated and engaged to work. Consider what it takes to retain your employees.

to drive that critical element of retention but also recruiting It's largely about trust brand protection. Now, you saw some of the numbers for the tech sector but more broadly. If you do experience a breach there is an opportunity to lose value of the organization anywhere from 26 to 74 percent so brand protection and in the context of trust is essential.

And last but certainly not least is this notion of customer loyalty? We see nearly 90% of customers who highly trusted brand buy again from that brand and 62% by exclusively from that brand. so you see even in these four areas that are seemingly so simple but so essential how much of that is driven by Trust so that brings us to okay.

Well clearly there is a need a trust is low trust is important. There's that recognition what are companies doing about it? And this is where we see a bit of a dichotomy.

61% of the sea Suite believe or say they're organizations will work to improve trust. So that number is lower than 94 and 85 and 83% of just that I write off to you previously. So we see a bit of a degradation there, but that number Falls even lower in terms of specific and explicit focus on this topic.

We're only 19% of organizations have a c Suite leader in place to focus their efforts and help companies earn trust. Less than 10% have put forth a chief trust officer. And even lower 14% only have a way to track to evaluate stakeholder Trust.

These are startling numbers and the dichotomy between that recognition of the importance of the issue and the relative lack of action is significant. So what are the barriers? We've talked to a number of organizations big and small really well established companies as well as those relatively new on the scene and what we see are three key barriers to this action.

First and foremost. What is it? What is trust within the context of my organization?

Defining the seemingly amorphous topic is not a simple exercise and that is a consistent barrier to action for a number of organizations. Second we've all heard this adage. You can only manage what you measure.

And when you think about all the things that we evaluate we quantify and measure within an organization trust is rarely one of them and so effective accurate and most importantly actionable measurement is essential for companies to make progress in this area. And third and this is sort of in the face of the numbers you see in the slide is effective empowered. And authentic leadership and focus on this topic this cannot be a check-the-box exercise.

So we consider these three barriers quite a bit goes into it. It's organizational change. It's Focus.

It's tone from the top but it's also mechanisms methods and approaches to actually measure and quantify this seemingly amorphous thing. But also defining what it means to you. Who do you have to build trust with what does it mean to your organization?

What are those key stakeholder groups and what are their expectations? And what do you have to do to earn their trust? So it's a massive undertaking but one that pays off in a big way for organizations.

So let's step forward. Let's explore. What does it really mean?

And how do we get past these barriers? Well first as a definition and we've spent quite a bit of time at Deloitte trying to better understand exactly what this trust mean in the context of business. It boils down to a very simple and foundational definition trust is gained by organizations that exhibit a high degree of competence.

And the right intent behind their actions now, what does that mean? Competence is delivering upon your promises being capable and reliable in everything that you do. But as the yin and yang suggests that competence has to be in perfect balance with the intent the rationale the motivation the why behind those actions and that is exhibited through another two factors of humanity and transparency.

so at the very foundational layer It's about competence and intent and the four factors you see with capability reliability who made an in transparency. Now that by itself is not enough to make meaningful progress in this area. I get that fully but everything about to share with you apply that lens to it apply that notion of confidence and intent with everything else.

You're about to see and the next set of key topics to cover what you see at the bottom of this page. We wanted to make sure that our research ultimately resulted in valuable information for organizations to make progress in this area. And so we work with academics with industry experts.

We looked within Deloitte and outside of it. And we identified 18 areas we call these trust domains that are disproportionately impactful to earning or gaining or losing trust within an organization. When you consider these words these categories some of them may be let's call them Usual Suspects some of them on newcomers on the scene.

We roll out this framework nearly three years ago. And our view was that this was not going to be a static concept. In fact, it is very dynamic because of the constantly evolving expectations the evolving technology landscape.

Things are coming in the Horizon that we do not even know about yet all of that drives and changes stakeholder expectations. And that's what's necessary to align to those in order to gain trust. But when you consider some of the areas at the bottom, you can see just how far spreading and far-reaching and sort of the breadth of what defines trust within an organization.

Things that compliance cyber posture Innovation intelligence and Technology usage the experience of your Workforce. digital engagement experience of your customer base These are all areas that are essential to earning Trust. Now we did not stop at this level because again, we wanted to be actionable in what we provided to our clients.

And so we further identified over 90 underlying drivers. Those are the actions the steps the processes the programs that organizations have to execute execute what that high degree of competence and the right intent in order to engender and earn trust. And so it is at that level of granularity that action has to be taken in order to make progress in this area.

So let's step forward a bit. And let's see if we can uncover a couple of those drivers. Obviously.

We don't have quite enough time to cover all 90, but I'm going to highlight just two of them. There's quite a bit on this slide. So let me walk you through it.

what a recent study of our show, is that companies that Execute those drivers that I mentioned before with that high degree of competence in the right intent. They that results and change in behavior from their customer base. Will there be B2B or b2c?

Showing that high degree of confidence right intent tends to positively influence engagement loyalty and behavior anywhere from four to 10% Per driver, that's an important callout here. So don't let the four to 10% may seem like a small number. We're talking about 90 drivers and each one of them has a potential impact that four to ten percent Improvement in customer Behavior.

The consequences of inaction or action that is not seen as being highly competent or having the right intent are severe you can see a degradation in desired Behavior. Anyway from 20 to 53 percent. So let's take two examples.

Again. We're talking about a set of 90 drivers that you saw on that framework. We're going to highlight two examples in the B2B world.

If your B2B buyer believes that the organization employs effective measures to prevent data loss and privacy breaches that same B2B buyer is 5% more likely to go out of their way to purchase. 4% more likely to encourage use of that brand that product that service over another option. 4% more likely to purchase additional products and 4% more likely to recommend the brand to others.

So you see that slight uptick and positive behavior driven by that one driver that is part of the 90 within our framework. And the b2c side very similar story. Understanding the importance if an organization illustrates that it understands the importance of data quality access protection and data Integrity.

You can see the positive uptick again for six percent of recommending the brand to others and paying more for the brand. But consider the negative numbers in that slide. Anywhere from 26 to 35% just for this one driver and driving negative behavior or the likelihood in this these positive things taking place.

So there's a very real very measurable. And significant impact on customer Behavior again B2B or b2c. If you don't execute those drivers effectively enough with illustrating that right intent in order to engender and earn that trust for those various stakeholders.

Again, a lot of that on the slide, but it's hopefully illustrates. Just how impactful taking trusted actions can be. And so there are multiple perspectives to consider when evaluating levels of trust within organization.

First we consider outside in perspectives. And consider all the various stakeholders that are surrounding the organization that are in your ecosystem that includes your customer. Certainly your alliance and ecosystem Partners shareholders.

Your board that could be considered kind of that external entity the media the regulators and so on and so forth. understanding their perspectives Whether it be through acting asking direct questions or through sensing, what are the signals out there about the organization? How do we interpret those signals?

How do we identify areas of trust is step one in this journey? Step two is diagnosing Trust From Within the company. Within the humans from the human's perspective that are those within the organization.

And it's asking the right questions asking the right questions to get an objective perspective of what's working. Well and what is not because the reality is the humans within the company are much more likely to identify potential areas of need gaps or things that will erode Trust. Before those are seen by the outside world.

So getting those perspectives is essential. The third component is how do you compare to the industry and sector benchmarks? Where are their gaps?

Based on your performance and what the sector is doing. We talk about this is a very Dynamic World. We're living in both in terms of the expectations.

But also in terms of what others are doing in this space and this can change overnight without giving you view of how others are performing what they're doing what their levels of trust are and how you compare to those. You tend to put yourself in a bit of an echo chamber and most organizations do this. They take measurements of all sorts and types and then they compare themselves to themselves year over year.

And we tend to celebrate at one point gain from prior years. And the reality is we just don't know is that really good? Is that one point Improvement significant enough or is it aligned with the rest of the market the rest of the industry or leading indicators across Industries and sectors so constantly identifying how the ecosystem is performing.

What are the industry Trends the sector Trends and how are you doing a relation to those? That's the third element of evaluating trust for your organization? Probably you apply these three components to the broad framework that you saw previously you measure trust at that level of granularity specificity to allow the company to identify gaps and that subsequently enable the organization to take meaningful action and all those areas.

Now on this slide you see a quick example of a dashboard. And this is just a sample dashboard, but it is this level of practicality granularity and data that is needed to let's call it activate trust and the eyes of the leadership team and management of the organization in order to make meaningful progress in this area. Otherwise, it's just talk.

And unless we're able to provide that level of insight that level of depth Clarity and granularity. We are not going to make progress in this area. so knowing where trust is earned knowing those gaps and deficiencies and understanding where action needs to be taken and how how urgent is that action a prioritizing it effectively.

These are all essential things. When you consider this world that we're living in and the importance of trust within it. The key thing for us all to remember is this is not an amorphous topic.

This is not an area that can be just left the side or considered sort of a nice to have. We have to treat this element this critical element of organizational performance just as we do any other. And how do we treat other topics within organization?

We employ the right leaders position the right infrastructure and team around that topic. We add it to our leadership agenda. We ensure that it is consistently and Appropriately discussed we measure quantify and highlight gaps in efficiencies deficiencies and strengths and we act on all of those appropriately the same is needed for trust.

Argue trust is the one thing that needs it more than anything else, especially in the face of change in a dynamic conditions within a technology sector that we're all operating in so I encourage you to consider those key things. Is that on your leadership. Agenda.

Do you have the right leader in place? Are you measuring quantifying trust in the right way? And are you discussing it appropriately with the right Cadence the right focus and the right approach?

Thanks so much for joining us this morning. It's a pleasure. Hopefully this was impactful.

Thank you.