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It’s up to a business to earn trust by demonstrating it is trustworthy

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The writer is author of ‘Who Can You Trust?’ and Trust Fellow at Saïd Business School, Oxford

So how do I build or rebuild trust?” It’s a question that leaders often ask me, as if damaged trust in their business or organisation is a physical object that just needs a little tinkering here and there.

But trust is essentially a belief; a confident relationship with the unknown. Trust can’t be “built”. It’s up to others — customers, employers, the public — to give a business their trust. And it’s up to that business to earn it by demonstrating it is trustworthy, not just in capability but also in character.

There are many, many examples of how not to gain trust. During the Boeing crisis last year, its now former chief executive Dennis Muilenburg repeatedly blamed a flawed automated flight control system for sending two brand-new 737 Max jets into deadly plunges.

Boeing’s solution to restoring trust? Changes to the Max software and new training. Necessary practical solutions, granted, but that was not enough.

Mr Muilenburg’s purely technical messages have done little to calm passenger fears. When travelling for work, friends and family would ask: “Are you getting on a Boeing 737 Max?” Whoever asked that before? And the fallout is costing the company. Now the aircraft is grounded and Boeing expects the 737 Max crisis costs to reach $18.6bn.

Boeing felt the impact of losing trust immediately, but it can take time to filter through in other companies, and that gap can breed complacency.

I was on a panel with Ruth Porat, chief financial officer of Google parent Alphabet, and other tech leaders at the World Economic Forum in 2018. Tellingly, the title of the session came with a question mark: “In Technology We Trust?” In the opening minutes, Ms Porat declared she didn’t believe Google had any trust issues because people still performed trillions of searches on its platform daily. I was stunned. No trust problems?

The same indicators used to track growth or performance are often used to measure trust. Trust barometers give companies and institutions percentages and points to show trust shifts year on year. Trust, however, isn’t that simple. For instance, I may trust Google to search; however, I don’t trust the Google Chrome web browser after the recent password hack.

Google and Boeing highlight a key point often missed during a crisis: money is the currency of transactions; trust is the currency of interactions. Without trust, a business becomes purely transactional over time.

Profits may remain strong and user numbers steady during a crisis, but confidence is eroded, a more valuable asset long term. A lack of trust can hurt the launch of new ventures, for example.

Of the two components of corporate trust, capability depends on reliability and competence. It’s how a business does things. Character hinges on integrity and empathy. It’s why a business chooses to do certain things, and not do others.

We are emotional beings. In a crisis, people need to hear an empathetic voice that shows genuine care for the human consequences of a mistake — a plane crash, violation of data, credit default swaps.

We want to know what’s going on in a leader’s heart, not just their head, but above all we want to know a company has integrity. It comes down to intentions and motives. People will not move on until they believe the interests of the company aligns with their own best interests. Quick fixes are not enough.

For Facebook, the Cambridge Analytica data scandal is far from over when it comes to trust. Because we know Facebook lied. No technical solution will fix that. Consider the hostile response in June last year when Facebook announced it would be launching Libra, a new cryptocurrency. “So you won’t take down lies?” congresswoman Alexandria Ocasio-Cortez blasted at Mark Zuckerberg, Facebook’s founder and chief executive, when she got five minutes to grill him.

While the hearing was meant to be focused on Libra, members of Congress focused on Facebook’s past data mis-steps and their latest decision not to prohibit political ads that are false or misleading. If we can’t trust the platform with our emails and phone numbers, why would we trust the company with our hard-earned money?

Facebook Portal, a smart display device, has flopped. After the platform’s privacy scandals, the consumer response to a device with a camera and a microphone was somewhere between hesitation, horror and rejection. It was a trust fail, not a technological one.

Similarly, when the Wall Street Journal revealed Google was working on Project Nightingale, a partnership with the hospital network Ascension to gather personal health data on millions of Americans, Google faced a public backlash. When a company announces a new product, and the general response is a firm “no thanks”, it’s a sign the company has lost permission to interact with us in different areas of our lives.

Mistrust and anger towards tech companies remains sky-high. Yet tech leaders keep pointing the finger at “capability” problems and downplaying “character” issues. Blaming it all on functional glitches — bugs, system errors, algorithms, rogue engineers and so on — is so much easier than taking a long hard look at behaviours or culture.

We saw the same pattern with the 2008 financial crisis, when dismal practices around banks’ balance sheets were blamed, rather than individual bad actors or corporate culture. Consequently, banks have spent the past decade focused on capability fixes — sticking to regulations, paying punitive fines, changing terms and conditions. All well and good — but internal technical changes alone do little to re-earn public trust.

Five ways for leaders to earn trust

Competence: Be upfront about what you can do, but more importantly what you can’t do.

Reliability: Work on being consistent in your behaviours from day to day, especially when you are under pressure.

Empathy: Take the time to genuinely listen and understand other people’s interests and needs as well as your own.

Integrity: Develop an astute awareness of how closely your words align with your actions.

Honesty: Communicate openly about your intentions and motives.

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Mexico: More social spending, no big business bailout

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MEXICO CITY — Mexican President Andrés Manuel López Obrador said Sunday there will be no huge economic stimulus program as the country faces the threat of coronavirus-induced crisis almost certainly unlike any it has seen in the past century.

Instead, the administration will expand his signature social programs, continue to prop up the heavily indebted state-owned oil company, deepen the government’s austerity campaign and do everything possible to avoid taking on more debt.

“There is a lesson that we have learned well and that we don’t forget,” López Obrador said to an empty and echoing National Palace patio. “An economic model that only benefits minorities does not yield general well-being, but on the contrary engenders public misery and violence.”

The economic reactivation plan remains consistent with his administration’s priority of helping Mexico’s most vulnerable through greater public spending on social welfare, keeping people employed and cutting costs in the sprawling government, he said.

As an example, he said the top level of government bureaucrats — from undersecretaries on up to him — will have their salaries reduced and give up their annual year-end bonuses.

López Obrador quoted U.S. President Franklin D. Roosevelt, who he described as that country’s best president “We have always known that heedless self interest was bad morals, we now know that it is bad economics.”

Before the speech Sunday, the primary association of Mexican industries, Concamin, warned in a statement that the pandemic could cause Mexico’s worst recession in a century. It called for “support to businesses to avoid the temporary closure of hundreds of thousands of them.”

Thus far, López Obrador has mostly talked about protecting the country’s poorest and placed special emphasis on those working in the informal half of Mexico’s economy. The industrial chamber made multiple references to the government’s support being widely inclusive.

López Obrador has praised billionaire Carlos Slim for his commitment to not laying off any workers during the crisis and urged other business owners to follow his example. The president has said that only workers in essential businesses should still be going to work and that those who stay at home should continue to be paid.

But he tried to appear open while not making any promises. Last week he received several of the country’s top businessmen and on Saturday he tweeted a photograph of a video call he had with BlackRock Chairman and CEO Larry Fink, during which they exchanged “opinions about the coronavirus and the deterioration of the global economy.”

Even before the pandemic, Mexico’s economy had already been in recession. Then last week, Mexico’s Treasury predicted the country’s economy will contract as much as 3.9% in 2020 because of the pandemic, and private analysts are making even direr predictions.

The Bank of America predicted Thursday that Mexico’s GDP could contract 8% this year. That would be a bigger downturn than during the 2009 global recession, complicated in Mexico by the H1N1 pandemic, when GDP decreased 6.5%. It would also be worse than the December 1994 peso crisis, following which the country’s GDP fell 6.2% in 1995.

A close economic partner of the United States, Mexico will expect to receive some benefit from the huge $2 trillion stimulus package approved there.

On Sunday, López Obrador continued to strike an optimistic tone.

“This crisis is passing, transitory,” he said of the pandemic. “Soon normality will return. We will overcome the coronavirus. We will reactivate the economy and Mexico will continue standing showing the world its glory and its greatness.”

Mexico has reported 79 deaths related to the virus and nearly 2,000 confirmed infections.

For most people, the coronavirus results in mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. But it can cause more several illness, including pneumonia and death, for some, especially older adults and people with existing health problems.

The new coronavirus has caused a global pandemic that has sickened at least 1.2 million, killed more than 69,000 worldwide, crippled economies and forced restrictions on the movement of millions of people in an effort to stop the virus from spreading and overwhelming health care systems.

Christopher Sherman, The Associated Press



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Coronavirus: Calgary business collects 3,500 pounds of pet food, donations in 4 hours – Calgary

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Calgarians are well-known for their community spirit, and despite the novel coronavirus crisis, that spirit was extended to include pets Saturday.

More than 3,500 pounds of pet food and donations were collected during a pet food drive on April 4 and delivered to the Calgary Food Bank.

“Being an essential business, we’ve been very fortunate,” Malmberg said.

“This crisis hasn’t affected us as much as a lot of companies, a lot of people. So we just wanted to do something.”


READ MORE:
What is an essential service? After groceries, it depends where you live in Canada

After hearing of a shortage of pet food donations at the Calgary Food Bank, Malmberg posted on social media April 1 that his store would be able to collect pet food and donations April 4.

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“A lot of people, when they think of the [Calgary] Food Bank they’re thinking about food. But so many of the clients have dogs and cats and small animals,” he said.

Malmberg invited people to stop by the parking lot of his Lake Bonavista store on Saturday between noon and 4 p.m. Volunteers accepted donations from the backs of vehicles, and within the first couple of hours, Malmberg could tell the initiative was a huge success.

Malmberg said providing pet food for clients of the Calgary Food Bank might just be enough to ensure people are not forced to make difficult decisions.

“If [people] don’t have the food to feed their animals, they’re either going to have to surrender them or abandon them,” he said.

The four-hour food drive was such a success that Malmberg said he had to call on volunteers to bring more trucks to help deliver the donations to the food bank.

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“I just want to thank the entire city. The response has been overwhelming,” Malmberg said.

For more information on the Calgary Food Bank click here.


© 2020 Global News, a division of Corus Entertainment Inc.





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Cath Kidston to call in administrators amid coronavirus lockdown | Business

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Cath Kidston is preparing to call in administrators, putting more than 900 jobs at risk, as the vintage-inspired chain battles for survival during the coronavirus lockdown.

The business, which has 60 stores in the UK and a further 180 overseas, has filed a notice of intention to appoint administrators, a legal process which protects the business from creditors for 10 working days, as it considers potential rescue options. The group employs 941 people in the UK, 820 of whom were furloughed on 22 March under the government scheme.

Advisory firm Alvarez & Marsal (A&M) was appointed last month to help Cath Kidston seek a buyer as the British brand, which opened its first store in 1993, struggled to make a profit for its Hong Kong-based owner Baring Private Equity Asia.

Cath Kidston Group has been in difficulties for some time, recording a pretax loss of £42.3m in the year to the end of March 2018 when sales rose just 1.2% and it closed small retail businesses in France and Spain.

Coronavirus lockdowns in the UK and elsewhere have only added to the difficulties and it is understood that even if a buyer is found, the rescue is likely to involve a pre-pack administration.

A Cath Kidston spokesperson said: “The notice of intention forms part of the process by which Cath Kidston is continuing to work with A&M to explore all options for the company in the current climate.”

The group is one of many retailers battling for survival in the UK after the Covid-19 pandemic forced the closure of most stores.

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Debenhams is also preparing to call in administrators after the struggling department store was forced to close all its outlets under the lockdown while Sir Phillip Green’s Arcadia Group, the owner of Topshop and Miss Selfridge, is expected to permanently close hundreds of stores as it suffers from competition from the likes of Asos, Boohoo and Primark.

The lockdown has added to existing pressures on retailers from the consumer switch to online shopping and rising costs from business rates coupled with the fall in the value of the pound since the 2016 Brexit vote.


Fashion brands have been hit particularly hard as young people switch from spending on outfits to alternatives such as digital subscriptions and mobile phones while competition from online businesses remains intense.

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