Against a backdrop of growing disruption, Alison Kay, EY global vice chair, industries, examines how businesses are regaining the public’s trust
ALISON KAY Thanks to the panellists for such an interesting, wide-ranging debate. Some of the key points that resonated for me were daring to change the rules, building trust over the long term, and letting trust flow from good decision-making underpinned by integrity. I’m also struck by how strongly we agree that disruption is a reality and it is here today.
Disruption is already here
Ronan Dunne of Telefónica UK raises an important point about trust and perceptions: the company changed the rules of the industry by altering the way it contracts with customers. By offering the first-ever SIM-free contracts, the company corrected the misconception that they were trying to lock people in with long contracts. Customers appreciated the freedom to leave when they wanted – and stayed. Trust improved, and competitors soon followed suit.
This ties into one of the most disruptive products I’ve seen in recent years: driverless cars. We’ve all heard about them. When I was driving to a client meeting in San Francisco in November, I counted four satellite-controlled cars during a 30-minute journey. Four!
Many of these cars aren’t produced by traditional automotive manufacturers; they’re created by the companies that brought us internet search engines, technology heavyweights and energy businesses. And they’re out there now. The traditional automotive industry is being challenged by competitors that weren’t on their radar even five years ago.
New mobility solutions are redefining what it means to drive, what a car is and what it can be used for. Previously it was a means of getting from A to B. Now a car can also be a mobile office, an entertainment centre, a data hub – pretty much whatever you want it to be.
It took technology and someone with the vision to change the rules. The point is, it could be you, it could be your competitor or it could be someone with no current links to your industry at all.
Trust: the long-term result of good business decisions?
During the roundtable, I was struck by how strongly the concept of trust resonated: its links to reputation, opportunities to build it during crises, the need – as Tomorrow’s Company’s Mark Goyder put it – for it to “underpin” the business over the long haul.
I believe that trusted companies whose business model balances the needs of the financial against other stakeholders will be best positioned to take advantage of disruption. Short-termism and a blinkered pursuit for profits above all else benefits no one. Businesses that earn the trust of stakeholders – not just investors but consumers, staff, suppliers, the communities and even the governments of the countries and regions in which they operate – will be the winners in the revolution that disruption is bringing.
How diversity can help
Geraldine Huse from Procter & Gamble raises the benefits of diverse leadership in breaking “group think” and challenging the status quo. At EY, we believe that accelerating women’s development is an economic imperative. It creates higher growth, increased prosperity and stronger communities. Even companies with only one female board director perform better than those with none.
Why, then, are we going backwards in terms of women in the workforce? Despite movements like the 30% Club and government mandates for more women on the board in countries ranging from France to India to the United Arab Emirates, gender parity is actually getting worse. In its 2014 Global Gender Gap Report, the World Economic Forum calculated it would take 80 years to achieve gender parity. The latest research shows this gap has widened to 117 years.
We all know that businesses should reflect the communities in which they operate. We are not there yet. Diversity of gender, ethnicity, sexual orientation, backgrounds, experiences and age – it is all indispensable in driving innovation and improving decision-making. We need to make it a priority if we are to seize the opportunities of disruption.
Harnessing the power of disruption
If companies can capture the variety of experience and insight that true diversity brings, they can make decisions that reflect the needs of all stakeholders. This will lead to better business decisions and new directions, which will lead to greater trust and sources of competitive advantage. As I said in the roundtable, all revolutions produce winners and losers. Trust will be key in determining who the winners are.
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To read the roundtable discussion on trust in business (in association with EY) read here