I recently gave a talk about my research to the LSE’s Hayek Society. Our discussion ranged widely, inevitably majoring on the current economic climate. I suppose once the rather smug recriminations raining down through the media evaporate all we really want to know is: what next? What is the most effective and sustainable balance between private enterprise and public intervention, and how can we find it?
A few days later I had the opportunity to continue this conversation during an Ashridge client day on leading in turbulent times. In both cases, I used an equation of which I am very fond. Maister, Green and Galford’s trust equation talks about the need to establish trust through credibility, reliability and intimacy. These three combine to form the top line, and are divided by self-orientation below, in that too much self-interest will undermine any currency built up through the top three. It occurs to me that this little equation offers an intuitive recipe for businesses trying to claw their way out of the slump. Credibility may have been affected, but being honest about what is not known as well as what is known is one way to restore it. Indeed, it was the prevarication of the banks that crippled trust between them. Reliability is next, and the importance of managing expectations. Being specific about what can and can’t be achieved – and delivering to this – shores up credibility, and therefore trust. Intimacy. Too many senior management teams have hidden their heads in emergency strategy offsites and internal cost-cutting, forgetting to reach out to their staff, customers and stakeholders to include them in their conversations. Game theory suggests that the wider the field of available information, the better the resulting decisions, and organisational rapport has to start with real human contact between parties, led by your front-line staff. So these three – credibility, reliability and intimacy – these are the priorities for economic survival. But what of self-orientation? I think this is the key. Any activity in the top line could otherwise look like those nasty capitalists ambulance-chasing if people do not see some sort of organisational altruism as well. So if your first instinct is to cut those Sustainability and Corporate Responsibility projects, think again – they may be more crucial to your recovery than you thought.