Broken trust hurting New Zealand
Media Release 4 September 2008
Broken trust hurting New Zealand
New Zealand is suffering from an epidemic of broken trust that could harm our economy, says author and reputation champion Hannah Samuel.
Samuel says issues such as the Tony Veitch affair, the string of finance company collapses and recent political funding scandals surrounding Winston Peters and New Zealand First have left many Kiwis sceptical about trusting any business or individual.
“Four weeks after it failed to have a complaint that one of its advertising campaigns was ‘grossly misleading’ overturned, Hanover Finance froze funds worth $554 million as it failed to meet its repayment obligations,” says Samuel, who will be speaking at the TIME business convention in Auckland next month.
“Some investors wanting to cash up their funds had repayment requests refused and were apparently told just days before the failure that their money was safe.
“How can investors believe anything that’s promised? And what about the promises made by other businesses in other sectors? How can consumers and investors be confident in the claims that are made?”
The amount of time it took Tony Veitch’s employers to act after learning about the incident in which the former rising star admitted “lashing out” at former partner Kristin Dunne-Powell also dented public trust, says Samuel.
“One week after the news broke TVNZ and the Radio Network were still ducking for cover.
“The incident is about more than one man’s reputation being in tatters. It’s actually about how Veitch and others around him, including his employers, chose to act as a result. Burying their heads in the sand and hoping it would simply go away was not a wise choice.”
Samuel compares this with the way fellow media and sporting celebrity Marc Ellis handled his reputation after being convicted for possessing an illegal class B drug.
“Ellis fronted up, publicly accepted responsibility and did not try to ignore, bleat or blame anyone or anything else, which is more than Veitch, and those who knew of the attack on his former partner, did.”
The string of allegations surrounding suspended Foreign Minister and New Zealand First leader Winston Peters are adding to the growing cynicism and distrust, says Samuel.
“The shenanigans associated with Winston Peters and the funding of NZ First over recent weeks have done nothing but reinforce the perception that politicians often act in their own self-interest and are, indeed, distrusted by many of us.
“Peters has only himself to blame for the situation he finds himself in. Whether he is exonerated or not, the die is cast and his political career is likely to suffer,” says Samuel.
Lack of trust has an economic cost, because every business and individual trades on their reputation, says Samuel. If doubts are raised about levels of trust, people will be less likely to do business.
“Trust is at the heart of every relationship and a breach of trust is almost impossible to win back.
“The most effective, satisfying and profitable businesses are, by and large, those that provide genuinely high-quality services to loyal customers who, without recognition or reward, are willing to recommend and refer the business or person they dealt with to others.
“If it takes them longer to win that trust, because prospective customers have been burned by others too often, that has a business cost.”
Samuel believes trust can be won back but it will take a significant amount of time and effort. “There is a lot of cynicism among people and they are now saying, ‘don’t tell me, show me.’ Even if people haven’t been burned directly, they see and read about people who have. Doubt kills trust.”
The winners out of this will be businesses and individuals who display ‘old-fashioned’ values of honesty and integrity. “These values are more important and relevant in today’s modern world than ever.
“Here lies an opportunity for people with significant leadership skills to demonstrate honesty, transparency and integrity. Businesses and individuals, who are trustworthy, will attract, and retain, customers.”
Hannah Samuel is a reputation advisor and author of ‘Reputation Branding: How to grow your business without spending a cent.’ She will be speaking at the at the TIME Convention, Auckland Convention Centre, THE EDGE, on Friday October 3, see Reputation Branding: How to grow your business without spending a cent.’ She will be speaking at the at the TIME Convention, Auckland Convention Centre, THE EDGE, on Friday October 3, see www.timeconvention.co.nz