The Trust Factor


Back in the day Henry Ford and his wife Clara visited some employees of the Ford Motor Company. After seeing first-hand the deplorable poverty of the people who made him the richest man in the world, he more than doubled the wages of his workers.


Shareholders and bankers bailed. They viewed his generosity as stupidity. As share prices fell, Mr. Ford bought the majority of his company back at bargain basement savings. The press had a field day predicting the downfall of the company.


Instead something strange happened. Workers at Ford could suddenly afford to buy the cars they were building. Sales increased dramatically. The best and brightest engineers and workers from other automotive firms quit their low pay jobs to find employment at Ford, so the product quickly improved. Profits exploded. Despite his famously low IQ and skewed political views, Henry Ford earned the trust of the American people.


If honesty is the best policy, why is that principle so lacking in business? Public trust is the holy grail of business. The company that people can believe in will leapfrog to the top of its field every time. This simple, counter-intuitive principle is incredibly hard to grasp. No modern company puts consumer trust above quarterly profits. As oligarchs battle for the title of richest or first, their paper supremacy exists at the whim of Wall Street casinos and central banking welfare.


Far and away the greatest cost in every firm is the money they will never earn. Accountants can spin profits and losses. But how can you measure something that failed to materialize?