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The business intersection of purpose and trust

In recent years, companies across the economic spectrum have increasingly been engaged in a rethink about what drives them beyond making a profit. In board rooms across the globe, business leaders began asking themselves questions like, “What is our greater purpose?” and “Why do we exist?” In August 2019, chief executives from 181 of the biggest US multinationals signed a joint letter from the Business Roundtable in which they recognized their purpose extended beyond solely benefiting their shareholders, committing to deliver value to every stakeholder impacted by their businesses.

Many family businesses had a head-start on this. At one point in time or another, family business founders have had to come to grips with this question of purpose. For some, their purpose was about building a legacy. For others, it was about making products they could be proud to put their name on or having a positive impact on their communities. But, for many, purpose tends to get watered down over time. A founder’s original intent may not translate to the next generation or be held in the same regard. When this happens, it can take a watershed moment to refocus the family business on what’s really important.

For many, COVID-19 has provided such a moment. The global pandemic has shaken businesses to their core, in many cases disrupting relationships with employees, customers, suppliers, communities, and other key stakeholders. Amidst this upheaval, family business leaders are looking for ways to reconnect with these constituents in more meaningful ways. And that search has them thinking anew about the intersection of purpose and trust.

Resilient leaders need to build trust across four key dimensions that have been impacted by the pandemic.

Trust as a form of currency

When it comes to earning and retaining the trust of society at large, family businesses have an inherent advantage.

With the arrival and rapid spread of COVID-19, this trust advantage is creating a once-in-a-lifetime opportunity for family businesses to lead the recovery and position themselves to thrive in a post-COVID world. In fact, if you talk to many family business leaders today, it’s clear that they understand the importance of embedding trust as a catalyst to help their organizations recover. They see trust as a human and multi-dimensional form of currency—it may not have any value in isolation, but its value is accretive. Trust can be stored, in the form of goodwill. And it can also be invested, in pursuit of all kinds of benefits, from economic growth and shareholder value to increased innovation, greater community stability enhanced employee engagement and better health outcomes.

The coronavirus pandemic has brought to light how resilient leaders need to build trust across four key dimensions that have been impacted by the pandemic. First, there’s physical trust—knowing that your physical space is safe. Second, comes emotional trust, or that your emotional and societal needs are being safeguarded. Digital is the third dimension—people need to know that their information is secure, particularly with the virtual expansion of their working and living environments. Finally, there’s financial trust, or having confidence that your financial concerns are being served.

Today, the stakes in preserving trust across these dimensions are greater than ever. We know this: Everyone is watching. The rise of social media has given every voice much more power to share their perspectives and opinions. In recent weeks, the issue of racial inequality has joined COVID-19 concerns as another urgent reason to revisit issues of trust between the public and organizations of all backgrounds. New challenges will continue to emerge and in order for family businesses to thrive in uncertain times, they will need to continue to build their currency of trust.

Purpose and trust

As such, family businesses have to manage a magnitude of challenges they didn’t need to consider when they were founded; from technology to global interconnectedness, there is more complex than ever. And this is bringing many of them back to reflect on their purpose and how to get people to come together toward a common goal. In this collective rethink, family businesses may have a decided edge over other types of organizations. As streamlined enterprises, they tend to be more nimble. Having more direct access to leadership helps convey information to the top quickly. And employees trust that their employers will act on it. In fact, the Edelman Trust Barometer reveals that when it comes to workers employed by large family businesses, they are more likely than their counterparts at non-family businesses to agree that the organization they work for acts on its values, looks to their employer to be a trustworthy source of information about social issues, and they are more likely to believe what their CEO says about the company they work for.

But how exactly can family businesses leverage these advantages in redefining or communicating their purpose?

When people want to share your purpose, you earn a self-replenishing fountain of trust and enthusiasm for what you’re doing.

Honesty, respect, embracing diversity— these things are expected of every family business at this time. They are basic, foundational traits. Every family business needs to examine whether its purpose aligns with human decency.

When the next crisis arises—and it’s arguable that it already has, with global protests bringing fresh attention to issues of racial inequality—companies will need to connect with people in an authentic, When people want to share your purpose, you earn a self-replenishing fountain of trust and enthusiasm for what you’re doing. meaningful way, by imagining the change they want to bring about in society, articulating it, and becoming an instrument of that change. When people want to share your purpose, you earn a self-replenishing fountain of trust and enthusiasm for what you’re doing.

It starts by answering a simple question: Does society want our company to exist? If you can’t answer that in the affirmative, then you have to figure out how to make it so.

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