Since the 2008 recession, business schools have done extensive soul-searching. What is our role in the larger context of society? How do we empower our participants to understand the language of business, but more importantly to create opportunities for themselves and for others around them? How do we incentivize our graduates to understand business in the context of social good?
I enjoyed spending time in D.C. with Associate Dean Frank Kelley (far left), academic advisor Colleen Davies (right), and the four Bauer students interning there for the semester, from left, Jason, Tracy, Nadine and Vanessa.
I spent the last two days in Washington, D.C., with four of our undergraduate students — Jason, Nadine, Tracy and Vanessa — who are spending this semester working as full-time interns on Capitol Hill. Working through the Washington Internship Student Housing (WISH) program, Colleen Davies and Sarah Gnospelius, our dedicated student advisors, picked four students through a selective screening process for this pilot program. Jason works at the Department of Commerce, Office of Public Affairs, Nadine is at the Consumer Financial Protection Bureau (CFPB), and Vanessa and Tracy are at the Financial Services Roundtable.
Travelling with me from Houston were Frank Kelley and Colleen Davies. Frank is the heart and soul of our undergraduate programs, not just because he is the Associate Dean, but more importantly, he cares, and cares deeply. Colleen is passionate about “her” students and will accept nothing but the very best for and from her students.
We arrived in D.C. Wednesday evening and met the students for dinner. Listening to them talk about their experiences was both fulfilling and humbling. Jason is learning about the importance of communications in public affairs and the value of timely news that connects legislative work to the public. Nadine is working on regulations that will help promote diversity. Vanessa conducts interviews and appreciates the value of effective communications skills when dealing with legislators and financial institutions. Tracy works hard and long on issues related to consumer financial protection. Her latest project involves finding homes for disabled veterans, reallocating foreclosed homes that banks are willing to donate. These students are learning important life skills through this program. They are gaining a solid understanding of the role of public policy in connecting business and society. They are learning to move out of their comfort zones, building their résumés, and making connections which they will take with them long after the semester is over.
Most important, however, is their appreciation for the value of public service. When Jason talked about the importance of communications and news in public affairs, when Nadine talked about the importance of ensuring diversity, when Vanessa spoke about the role and responsibility of financial institutions in serving and protecting the consumer, when Tracy told me about her commitment to helping veterans find homes, it was clear that these students were inspired by goals bigger than themselves. They want to make a difference, and I know they will. You can teach skills inside a classroom, you cannot teach passion for service. Listening to their commitment and their passion was humbling and fulfilling at the same time.
How do we scale these experiences? Your input, please.
About three weeks ago, I participated in a panel discussion along with other business leaders in Houston. Titled “A Crisis in Leadership,” the panel discussion centered on the issue of trust or lack thereof in institutions that power our economy. Why is trust important and how do we increase trust?
The panel discussion where I was featured also included Edelman President and CEO of U.S. Operations Mark Hass, Houston Technology Center CEO Walter Ulrich and moderator Russ Capper, host of the BusinessMakers and EnergyMakers radio show. (Photo provided by Kenn Stearns Photography and The BusinessMakers Show)
The Edelman trust barometer is created by Edelman Berland based on interviews with over 30,000 respondents worldwide. The 2013 Edelman Trust Barometer is based on the 13th annual trust credibility survey and captures the level of trust that the public has in various organizations from government to business across countries and cross-sectionally across various industries. The key takeaways from the research findings were:
- While trust is based on performance, an organization’s message, culture and values, are equally important to build trust. Today less than 20% of those surveyed trust business and even fewer, the government.
- Trust in institutions, while low, is greater than trust in the people that lead these institutions. We trust business more than we trust business leaders; we trust government more than we trust government officials. Sadly enough, today, less than 1 in 5 individuals trust business leaders to do what is right and ethical.
Both factors underline the fact that decline in trust is more about a crisis of leadership. Why is it important for us to create trust?
Trust is important not only because it feels right, but it also makes business sense. If you watched the movie Castaway with Tom Hanks, and ‘Wilson’ the volleyball, you appreciate the fact that Tom’s need to connect with another human being kept him going through the experience. It is our need to be more than ourselves even when we are alone, our need to have a purpose, our need to be connected that drives us to action. And research shows that we are hardwired to seek connections with others, to build trust. Trust in turn generates positive responses which then motivate us to ‘cede power and resources’ to those we trust. Hence, when people trust us they are willing to allow us to make decisions on their behalf.
Here, Jason Kottke tells the story of Ralph the street vendor in NYC, who sells coffee and donuts. Donuts cost 75 cents at Ralph’s food cart. The customer who hands $1 to Ralph when he buys a donut, is motioned toward a bowl with change. Ralph yells “next,” asking you to take your change from the bowl, so he can serve the next customer. Does every customer take exact change from the bowl or do they take more than they should? Does anyone keep track? Interestingly, Ralph’s store serves a large number of customers. Kottke, who observes Ralph, looks at two other vendors nearby and notices that they spend twice as much time on each customer and serve less than half as many as Ralph does. Ralph serves customers in half the time it normally takes, and so the loss he potentially makes in the ‘change bowl’ is more than made up by the volume of business. The business model here is built on trust, and it is this trust that differentiates Ralph’s store from the others.
Jeff Dyer and Wujin Chu examine the buyer/supplier relationship for automakers in the U.S. and find that the least trusted buyers incurred procurement costs that were six times higher than the most trusted buyers. When trust is low, negotiation, diligence costs and enforcement costs are all significantly higher, reducing the value of the business. Driven to an extreme, low levels of trust mean lower investment, income and hence growth. The more effective a country’s legal system, and the greater the trust it engenders, larger is the economic growth. Hence trust is a valuable asset.
How do you build trust? In addition to performance, engagement and transparency are key drivers of trust.
Creating engagement via a shared vision is easier said than done. We live in a world where we spend 8 minutes on average reading the news (via digital editions of an average of seven sources). We spend 10 seconds on a landing page before moving on. Hence creating engagement is a continuous process.
Transparency is equally important. We live in a world where we are separated by what Mitch Joel refers to as ‘Six pixels of separation.’ Behavior matters. The ‘how’ is as important as the ‘what’ and more important today than it has ever been. Our behaviors can cause people to ‘friend’ or ‘unfriend’ us with the click of a mouse. In 2011, the demonstrators in Tunisia and Egypt were initially armed only with cell phones that could take pictures and it gave rise to a whole movement — the Arab Spring.
Of course engagement and transparency must be backed by performance. Then trust follows.
Do you agree?