Companies from Boeing to Facebook lose faith by not giving enough attention to confidence as a key ingredient for meeting the needs of their stakeholders. But there is also a chance where there is a crisis. How can managers turn confidence into a competitive advantage? (Webcam business)
Confidence is important because cooperation is a prerequisite. Confidence means becoming vulnerable to others’ actions, because people are convinced of their good intentions and their ability to achieve results. Opinions indicate that there is a decrease in this readiness – or at least an uneven distribution: the confidence in small companies is still very large, but large companies are hardly trusted.
And while Big Tech continues to lead the sector’s trust rankings, its pole position appears to be jeopardized. Consumers have been informed over the past months that Amazon, Apple, Facebook, Google and Microsoft have heard vocal commands from users, that Google has stopped users from locking out of home and baby monitor and Boeing has outsourced software to the 737 Max to $9 an hour.
The fading trust in companies not only calls regulatory authorities into the plan, it also clears the way for trust as a differentiator. In this new game of trust, four strategic options crystallize. The second is confidence as a service; the third is trust as a platform strategy; the fourth is open architecture that helps each actor to build their game of confidence.
We call companies that do that “trust champions” the first strategic option to adopt trust as a product strategy: One recent example is the American consumer electronics company Sonos. He competes in the smart speaker market with Google, Amazon and Apple and recently launched a new product whose unique point of sales is trust-based. In the same way that other smart speakers can’t react to voice commands, but it doesn’t listen to what people say in the privacy of their homes: you can trust that you don’t get sniffy.
There are a group of people in their houses who just don’t want microphones,” explained Patrick Spence, CEO of Sonos, right after his speaker without a microphone. “We thought that it was a good chance to…give people peace of mind.
Whether the choice will help pioneers of consumer electronics to expand their share of a market dominated by Google and Amazon, but Sonos is not alone in betting privacy as a competitive edge in the wake of rampant violations of privacy by large technology firms, will become too quick. Among the most prominent companies are toymakers for children like the iconic Lego brand that decided to control the type of data that would be transmitted against its social media buttons for the social “Lego Life” network. It is only one of many “first security” features to mark the successes of its online universe that attracted six million people in its first year.
The open source software company Mozilla has published its second annual ‘privacy not included,’ which rates 70 products, from the toys and intelligent speaker to the video stamp cooker, during the Christmas shopping season last year. Only five products met the minimum security standards of Mozilla in the “Toys and Games” section. Ashley Boyd, Mozilla’s vice prize manager explained, while acknowledging that the number of products shown “is a drop in buckets,” that the purpose of the list is “to conduct a conversation where producers can see that consumers are concerned about this information.”
Although voluntary data protection standards such as the Trustable Technology Mark (by Mozilla and Things on) are still in its infancy, the trust based product strategies already include topics such as sustainability, safety and health. In 2012, Jessica Alba launched Honest Company, challenging consumer giant Procter & Gamble, before expanding into cleaning, cleanliness and other products, with an environmentally friendly and affordable alternative to Pampers’s wipers. With a valuation of over $1 billion in only three years, the celebry start-up has achieved unicorn status.
A brilliant example of how to compete with trust is the honest company – but it’s also a careful tale. Following its meteoric rise, the quality control and product labelling issues both affected its image and its assessment. While a change in leadership, a diminution in the size of its product line and audacious investments in quality assurance have put the company back in its path, the downturn holds a key lesson for champions of confidence: the more confidence-based you compete, it’s hard for you to come across if you do not take the action.
As a service, trust brokers’ offer confidence. Their objective is to enhance or maintain trust for other companies. One example is New York’s Source map, a specialist software company in mapping global supply chains. Greater transparency in the supply chain “enables firms to charge higher prices and avoid reputable risks,” argues its CEO Leonardo Bonanni.
The growing certification industry itself is the third and most established approach to brokering trust. With the ESG increasingly recognized as risk indicators and future financial results, there is a great deal in businesses’ interest in building confidence in sustainability efforts.
Next are confidence platforms.” Unlike trust champions, it focuses on the systemic dimension of the confidence building process and realizes that confidence is an ecosystem that brings stakeholders together, as well as the intentions and capabilities of the individual actors.
Confidence architects are perhaps the most radical when they reimagine the social and Technical foundations on which confidence is built. They all strive to build new collaborative architectures that will produce confidence in open and decentralized environments while pursuing different objectives and taking on different legal forms.
Confidence is the successful company operating system. The deterioration of the company’s power in view of unprecedented levels and the felt rise in intended and unmeaning corporate misdeeds gave rise to a new environment of trust champions, brokers, platforms and architects. Market leaders need to tap into this ecosystem to avoid jeopardizing their competitive edge by losing their public confidence; smaller actors may enjoy greater social confidence, but they face the enormous challenge of turning a confidence benefit into a competitive advantage.
However, the game of confidence is not a game of a zero sum. Confidence is not an enduring resource. It is an exercise muscle that becomes stronger. Thus, the crisis of trust is also a chance to create a system of operations for more sustainable and cohesive societies.
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