Our latest book is now available: Extreme Trust: Honesty as a Competitive Advantage.
But what is "extreme trust" and what does it mean for businesses? Our argument is that in a more socially connected, transparent world -- a world of Twittter and Facebook, Wikileaks and YouTube, companies will be held accountable by customers for proactively protecting their interests, rather than simply passively refraining from cheating them or deceiving them. "Extreme trust" comes when a company is proactively trustworthy, or "trustable."
When iTunes reminds you that you already own a tune you're trying to purchase, or when Amazon warns you that a you've already bought a book you're trying to order - these are examples of trustable behavior. In each case, the company is being proactively trustworthy. No one would consider it dishonest for either company simply to accept your order, even though it is probably a mistake for you. It would be your mistake, not the company's, right?
Most businesses today consider themselves trustworthy, and by yesterday's standards they are. They post their prices accurately, they try to maintain the quality and reliability of their products, and they generally do what they say they're going to do. But that's as far as most businesses go, and by tomorrow's standards it won't be nearly good enough. Not even close. These business practices are passively trustworthy, but not proactively trustworthy. They aren't examples of Extreme Trust.
The fact is that far too many businesses still generate substantial profits by fooling customers, or by taking advantage of customer mistakes or lack of knowledge, or simply by not telling customers what they need to know to make an informed decision. They don't break any laws, and they don't mean to do anything wrong. But think for a minute about the standard, generally accepted way some industries have made money for the past several decades:
- To credit card companies, a marginally sophisticated borrower who can never resist spending, rolls his balance from month to month, and often incurs late fees is considered a most valuable customer. The common industry term for a credit card user who dutifully pays his bill in full every month is "deadbeat."
- Mobile phone carriers profit from customers signing up for more expensive calling plans than their usage requires, and from roaming and data services accessed by accident.
- Retail banks make a substantial portion of their operating profit from overdraft charges and other fees assessed for what are usually just simple customer errors. (Many standard bank processes are explicitly designed to encourage overdrafts.)
- The overwhelming majority of companies even today don't allow customers to post product or service reviews on their own Web sites.
Rather than simply following the rule of law, a trustable company is proactively trustworthy, and follows the Golden Rule - called the "principle of reciprocity" in philosophical terms. Extreme trust means giving customers the same kinds of considerations you would want to have yourself - honesty, straightforwardness, and looking out for the other's interest.