Determining the viability of the Trust Product Practice in B2B-focused Organizations
Executive Insights:
- Trust is Essential: Trust is foundational to organizational success, impacting communication, leadership, and overall performance, and must be managed effectively.
- Inherited vs. Manufactured Trust: Organizations rely on either inherited trust from compliance or manufactured trust built through transparency and security measures.
- Market Differentiation: Inherited trust ensures compliance but does not differentiate in the market, whereas manufactured trust offers a competitive edge.
- B2B Trust Needs: B2B sectors like technology, e-commerce, and professional services significantly benefit from actively building manufactured trust.
- Regulated Industries: Utilities, agriculture, and traditional manufacturing rely primarily on inherited trust, where additional trust-building has minimal market impact.
- Strategic CISO Role: CISOs must evaluate if their organization needs inherited or manufactured trust and align cybersecurity practices accordingly to enhance market position.
- Evaluating Trust Strategies: Understanding the distinction between inherited and manufactured trust helps leaders decide the viability of the Trust Product Practice, guiding strategic investments in trust-building.
The significance of trust within organizations cannot be overstated. Trust is not just an abstract concept but a foundational element that underpins effective communication, leadership, negotiation, and overall organizational performance. Research by Mayer, Davis, and Schoorman in their seminal work “An Integrative Model of Organizational Trust” highlights how trust facilitates smoother interactions and more robust relationships within and outside the organization. Trust is cited as a crucial factor in numerous organizational contexts, from leadership and management to labor relations and team dynamics to the overall health of critical business relationships.
Within Cybersecurity and IT, trust takes on an even more critical role. Digital transformation is often seen as a progressive journey, and the trust organizations place in their systems, partners, and regulators directly impacts their reputation, operational effectiveness, and financial performance. For data protection leaders, understanding and managing trust is not just a peripheral concern but a central strategic imperative. Understanding the sources of trust in an organization is essential for devising an effective trust strategy. Trust can generally be classified into two categories: inherited and manufactured.
Inherited trust is the trust conferred upon an organization by virtue of its compliance with regulatory frameworks, professional certifications, or statutory requirements. This type of trust is often found in industries where there are stringent regulations ensuring a baseline level of trustworthiness. Customers and stakeholders trust these organizations because they meet established standards set by authoritative bodies.
The most important context to understand with inherited trust is that it does not differentiate in the market. Customers of banks, governments, hospitals, and educational institutions do not undertake extensive due diligence of risk management fundamentals prior to entering business relationships with these organizations. Consumers of these services are not making the functional decision to engage based on the verifiability of evidence of trustworthiness in the same way that SaaS, e-commerce, and professional services do. This missing link to the value journey defines inherited trust: if the risk management and compliance checkboxes are checked, the organization is open for business, and will not get more business if they invest in trust above and beyond the market compliance baseline.
In the healthcare sector, hospitals and clinics inherit trust through accreditation and regulatory compliance, such as the Joint Commission in the U.S. or NHS standards in the UK. These institutions are trusted because they meet high standards of care and safety, ensuring patients receive reliable and effective treatment. Pharmacies also benefit from inherited trust due to licensed pharmacists and regulated drug dispensing practices, assuring customers of the safety and efficacy of medications. Financial services, including banks, credit unions, and insurance companies, inherit trust from regulatory oversight by entities like the FDIC in the U.S. or the FCA in the UK. Compliance with these regulations ensures financial stability and protection for customers’ assets. Insurance companies similarly rely on compliance with regulatory standards and the backing of reinsurance to provide a safety net for policyholders, thus inheriting trust from these institutional safeguards.
Government services, such as regulatory agencies, public utilities, and law enforcement, inherit trust from their mandate to enforce laws and regulations. These services ensure public safety and welfare, and their trustworthiness is derived from their roles in upholding the law, maintaining public order, and providing essential services like water and electricity. The regulatory framework guarantees reliability and safety, which forms the basis of public trust. In the education sector, universities and accredited training institutions inherit trust through recognized educational bodies that ensure institutions meet specific academic and operational standards. Accreditation from these bodies guarantees the quality of education, and the institutions inherit trust from these endorsements. Similarly, in legal services, law firms inherit trust through bar association membership and adherence to legal standards and ethics, ensuring a baseline of professional competence and integrity.
Manufactured trust, on the other hand, is the trust that organizations actively build and communicate. This involves transparent practices, robust security measures, and third-party validation of trustworthiness. In B2B industries where trust is a key buying criterion, manufacturing and shipping trust stories to market can provide a significant market advantage.
In the technology and software industry, SaaS companies, cybersecurity firms, and cloud service providers manufacture trust through robust data security measures, privacy policies, and transparent operations. Assurance certifications like ISO 27001 and SSAE18 SOC 2 Type II further build trust, demonstrating a commitment to best practices and the defense of confidential information bound by duty. Firms that manufacture their own trust demonstrate trustworthiness through case studies, the sharing of internal testing and governance documents, third-party certifications, and independent assessments. E-commerce and retail sectors also benefit from manufactured trust, particularly in B2B marketplaces. Trust is manufactured through secure-first approaches to their products, vendor certifications, and customer service excellence. Platforms like Amazon rely heavily on vendor reviews and buyer protection policies to build trust. Direct-to-business brands, such as Shopify Plus and Salesforce, manufacture trust through product quality, transparent supply chains, proactive security stories, and responsive customer support. Extensive case studies and customer testimonials play a crucial role in building this trust.
Professional services, including consulting firms, marketing agencies, and financial advisors, rely heavily on manufactured trust. Consulting firms like McKinsey and Deloitte build trust through service excellence, client testimonials, and industry recognition. Financial advisors like Vanguard and Fidelity build trust through certifications (e.g., CFP), fiduciary responsibility, and transparent fee structures. Adherence to ethical standards and providing clear, honest advice are paramount in these industries. Business services, including HR and recruitment services and facility management, manufacture trust through transparent hiring processes, compliance with employment laws, and successful placement records. Firms like Randstad and Korn Ferry build trust through client success stories and adherence to ethical recruitment practices. Facility management companies, like JLL and CBRE, build trust by ensuring facilities are well-maintained and compliant with health and safety regulations. In essence, trust is built by enabling and protecting the incentives of all stakeholders in the shared value journey.
While the Trust Product Practice is a powerful strategy, it is not universally applicable. In some industries, trust is primarily inherited from regulatory compliance and institutional reputation. Additional efforts to manufacture trust do not significantly impact their market position or entity valuation. Utilities, including electricity and water supply services, inherit trust from regulatory oversight and the essential nature of their services. Customers assume reliability and safety due to government regulations, making additional trust-building efforts less impactful. The regulatory framework ensures that these services are consistently provided, and the public trust is primarily derived from these regulations.
Basic commodities, such as agriculture and mining, also inherit trust through regulatory compliance related to safety and environmental standards. In agriculture, trust is inherited from food safety regulations and certifications, such as organic labels. The focus is more on compliance with safety standards than on manufacturing additional trust. In mining, trust is inherited from compliance with safety and environmental regulations, and efforts to build additional trust may not significantly impact market position due to the industry’s reliance on regulatory trust. Traditional manufacturing, including heavy machinery and construction materials, inherits trust through compliance with industry standards and certifications. The primary concern for customers is compliance with safety and performance standards, not additional trust-building efforts. Customers rely on these standards to ensure product quality and safety, and the trust is inherited from regulatory and industry compliance.
Traditional retail, such as grocery stores and local retail shops, inherits trust from food safety regulations and the consistency of supply chains. Customers trust that groceries meet safety standards without additional trust-building efforts. Local retail shops rely largely on community reputation and legal compliance. While excellent customer service can enhance trust, the baseline trust is inherited from local regulations and community standards. Logistics and transportation, including freight shipping and public transport, inherit trust from regulatory compliance ensuring safety and reliability. Customers trust freight companies to meet safety standards and deliver goods without additional trust-building efforts. Public transport inherits trust from government oversight and regulatory compliance ensuring safety and reliability. Passengers trust that public transport meets safety standards due to government regulation.
For CISOs, understanding whether their organization relies on inherited or manufactured trust is crucial for selecting the appropriate trust strategy. In organizations where trust must be manufactured, CISOs can pivot their cybersecurity or IT security practices into a Trust Product framework. By doing so, they can lead their organizations as accountable go-to-market product leaders, aligning security practices with business objectives and enhancing market differentiation. CISOs adopting the Trust Product Practice can develop transparent safety and security measures that build customer confidence. Implementing robust privacy operations that protect user data and underscore the commitment to demonstrating trustworthiness is essential. Using certifications and third-party audits to validate their trust practices can provide further assurance to customers seeking differentiation. Additionally, creating compelling trust narratives can effectively build and maintain trust in the context of an account-based marketing paradigm. This approach allows CISOs to move beyond traditional operational leadership roles and take on a more proactive strategic position within their organizations, ultimately defending and accelerating the value journey for all stakeholders.
Trust is a fundamental ingredient in organizational success. Whether inherited or manufactured, understanding the sources of trust in an organization is essential for devising effective trust strategies. The Trust Product Practice provides a robust framework for organizations that must actively build and communicate trust. By adopting this practice, CISOs can enhance their organization’s market position, foster long-term customer relationships, and drive business growth. This nuanced understanding of trust, along with a strategic approach to building and maintaining it, equips CISOs to lead their organizations with confidence and integrity in an increasingly trust-conscious world.
