This article first appeared in City AM.
The Middle Ages were a time of disease, rebellion and conflict. Fake news was rife (most people still thought the earth was flat), and – if the Hundred Years War is anything to go by – Britain’s relationship with Europe was difficult, to say the least.
But compared to the stresses and insecurities of modern life, the Middle Ages does at least seem infinitely less complicated. For example, imagine how simple life would be if your entire social network consisted of the handful of people you saw and interacted with every day.
Today, there are many ways to benchmark personal and professional success, but back then survival was the number one ambition. If you weren’t fortunate enough to be born into nobility, you had to learn a trade, and figure out how to keep your customers happy.
Take bakers, for example. If they were caught selling their customers short, they could be placed in stocks and left at the mercy of a bloodthirsty public.
In a small community, the most valuable currency is trust. So, to avoid accusations of fiddling their measurements and selling underweight bread, bakers would routinely throw in one extra loaf or portion, to make absolutely sure that customers were getting at least the amount asked for. This is why a “baker’s dozen” adds up to 13. Better to be over-generous to your customers than to be considered mean or untrustworthy and end up being “pilloried” – literally.
I write this today because over the past few centuries, the relationship between suppliers and consumers has changed enormously. Technological progress, most notably the Industrial Revolution, turned a business from being something local and relationship-based into something much more scalable and less personal.
Companies could serve customers not only in the next village, but in the next county and, ultimately, on the other side of the world. There are all kinds of benefits to this, with customer choice and lower costs the most obvious. No one could deny the massive leaps in living standards that markets and business have enabled.
However, there is, in my view, one massive disadvantage: a conspicuous erosion of that valuable currency, trust.
As a business moves further away from its customers, there is a risk that its ethics or morality can decline. We’ve seen this in a number of high profile corporate scandals over the last few decades – from Enron’s collapse, to sub-prime mortgages in the lead-up to the finance crisis, to the libor scandal.
These firms managed to get away with it for so long because they were too big to be held to account by their customers. Take away the risk of being publicly held to account for misdeeds and soon you just stop caring about your customers, or even forget who they are.
Now, that’s changing, and customers are regaining the power once more. Just look at the backlash faced by Volkswagen after revelations about its faked emission tests, or the outcry when a United Airlines passenger was dragged from his seat. No business has the divine right to be successful, and companies that show contempt for their customers risk being pilloried on a global scale.
If you ask me which companies operating today have the potential to still be successful in 50 years’ time, I’d say I’d look to those businesses that are working hard to treat every global customer as if they were still local. Just like the bakers of old, they’ll recognise the value of always giving their customers more than they asked for, because they’re more interested in the long-term relationship than any single transaction.
Business may have changed in the last few hundred years, but people haven’t. And when it comes to relationships in business, trust is still absolutely everything. Those companies that haven’t figured this out yet, or fail to change their thinking fast enough, will ultimately fade into history.
For journalists in their professional capacity only. Issued by Octopus Group. Registered office: 33 Holborn, London, EC1N 2HT. Registered in England and Wales No. Issued: August 2018.