We have seen an amazing transformation occur over the past 18 months.  This has been initiated by the banking industry by Ponzi schemes and mortgage fraud in the banking industry.  Life savings have been sacrificed, homes taken, taxpayer money spent, and jobs lost.  This is well-documented.  This doesn’t mean that all banks are bad and in fact . . . a large majority of banks steered clear of the need to make “easy money.”  The problem is that this industry has been tainted by the “best and the brightest” in large banks.  Probably another post on my speculation of why “the best and the brightest” do stupid things, for a preview I suspect selfishness nurtured by reward systems that made these pursuits acceptable.  Regardless of the reason, we now face a crisis of trust.

I was listening to John Gerzema (Young and Rubicam) at The Marketing Forum in San Francisco Avoiding the Looming Crisis in Brand Value (Listen here).  He mentioned several items that the consumer is dealing with right now and include:

  • Selfishness and Collusion
  • Egregious and Criminal Behavior
  • Decaying Infrastructure
  • Failure of Regulatory Oversight
  • Taxpayers as Shareholders
  • Lack of Permanence

Mr. Gerzema in stating the obvious talks about how trust is important to the consumer, but has not been high in importance to corporations.  Ah Duhhh!  Seems like we have played this song before, remember Sears and the mystery car repairs where targets and incentives drove stores to “find” repairs?  The same trust issue exists today as the targets and incentives drove our banking system further and further from what mattered to customers.  Let’s face it, we all were a little greedy and now we are paying the piper.

Many have talked about the transparency needed in organizations or more regulation by government.  Transparency is difficult to achieve as unscrupulous organizations can always hide things or misrepresent them and more regulation will add costs plus there is no guarantee that regulation will keep us from the next crisis.  Regulation may help to prevent a crisis like the one we just had, but not the next crisis as it will be different in some form.  Instead of transparency and regulation, maybe we need to review the target and reward systems that help drive the wrong behavior in the first place.  Targets and incentives have become the defacto purposes in many organizations, hiding the real purpose of serving the customer.

Social media is bringing a different game to the field where now a person can call out an organization.  You get more than one person experiencing the same problem your organization may have a crisis on its hand.  Companies are running out of places to hide their poor product or service.  So, wouldn’t it just be easier to fix the problem?  I would submit to you . . . the answer is yes.  The answer that will possibly save the future.

My hope is that corporations will see the value of systems thinking which focuses attention on the customer, not because we just had a crisis . . . but because when we focus on the customer provisioning services costs less.  This is not the command and control thinking we are used to having in the US where we believe there is a trade-off between costs and good service . . . it is a management paradox. 

We can actually lower costs and better service by providing good products and services.  We don’t need to hide problems, we need to address them.  The customer has a voice louder than ever.  Corporations are in need of building systems that understand customer demand and purpose associated with these demands.  If we begin to rebuild our organizations to acquiesce to customer demands we have a better chance of re-building the trust lost between customer and company.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at info@newsystemsthinking.com.  Reach him on Twitter at www.twitter.com/TriBabbitt or LinkedIn at www.linkedin.com/in/trippbabbitt.