by JARVIS CROMWELL

Back in 2007 we quoted renowned free-marketeer Milton Friedman on the pages of this blog as follows:

“There is one and only one social responsibility of business,” Friedman wrote back in 1970, and that is to “engage in activities designed to increase profits.”

Friedman’s viewpoint ultimately became the guiding principal of an era: profitable self-interest would be viewed as the only reliable endgame by most businesses.

The costs were higher than anyone imagined.

We read today that there is increasing consensus that there will be a 15-25% drop in the standard of living around the world (more in some especially beleaguered regions) as a result of the current crisis. Wow. And some corners are now arguing that 2008 was to capitalism what 1989 was to communism. Is this the demise of free market capitalism as we know it? Or is there a way out of this place?

The optimistic view is that our current sorry state of affairs will herald a new era of free market capitalism that fellow trustmeister Dr. Sri Raghavan and I have termed “Trust Metric capitalism.” The idea is that management teams must demand that their organizations better measure what truly matters for the long-term health of the system. To achieve that, organizations will need to look at metrics beyond short-term profit — the kind that measure the underlying health and vitality of their organization, transactions and markets. The pessimistic view is that leaders will hunker down in a tough market, continue with an agenda that is both short-term oriented and bubble-prone, and generally fail to lead us into sustainable profit and growth.

Over a year ago the futurist Andrew Zolli wrote a piece in where he declared that the oblivious capitalist’s days are numbered. In this case Zolli cast his eye to the future and concluded that a host of global forces will force a remake of the playbook for business success. Business will profit by driving a wider social agenda and “the clinical, value-neutral capitalism of old” will fall by the wayside.

Let’s face it, whichever way you slice it companies have much work to do. That work includes reducing costs and preparing financially for a long winter. But beyond the very real financial constraints, this is a time of customer scarcity and increasing fear. Building trust must now become a central means through which companies will drive customer sales, loyalty and retention, employee engagement, productivity and, ultimately, long-term shareholder value. It is an essential metric to the survival of capitalism as we know it. Warren Buffett compared trust and confidence to the air we breath. We take it for granted until it’s gone.

What do you think? Are the days numbered for the oblivious capitalist — or will leadership rise to the challenge and institute a new set of performance measures to bring us back from the brink? Which companies get it, which don’t? We would like to know your views.

by Jarvis Cromwell, Reputation Garage Founder

The world’s business community has reached, well, let’s just call it a low point: Practically nobody trusts big business. (In the U.S. the number who say they trust big companies and brands hovers around 13%)

So the intent behind this blog is as simple as it is ambitious: We’re an experienced group of professionals who want to help change the dismally low worldview of business. We are pushing for a new era of business performance – where companies and their brands are trusted more than they are today. (Along the way, we also expect to see continuing seismic shifts in marketing practices as we know them.)

Our merry band of “trustmeisters” has been at this for some while already to come up with ideas we can translate into action in our day jobs. The team includes yours truly, a corporate chief marketing officer who is known for his thinking on this topic; a U.S. ad agency chairman who questions the efficacy of many traditional marketing programs and practices; a brand strategist who now is responsible for the P&G brand evaluator globally, a corporate social responsibility expert and U.K. native who has also served as co-head of the U.S. branding practice for a global communications firm; a leading thinker at the intersection of marketing and technology whose day job happens to be at one of the world’s leading consulting firms, an analytics PhD, . We’ll be adding more trustmeisters as we go along.

Are we out to change the world? No, but if trust matters, then a lot of organizations are not supported by strong footings. More importantly, a majority of customers and employees around the world are expressing unhappiness with the current state of affairs. That doesn’t exactly spell brand power or, to use the catch phrase of the moment, employee engagement.

Because traditional practices have failed to prevent or solve these problems, new ideas and actions are called for and therein lies our mission.

For the record, trust matters. Indeed, if you’ve attended any of the last several World Economic Forum meetings in Davos over the past few years, you know that there is significant hand-wringing taking place over this issue. When trust declines, the nature of virtually every exchange and transaction is altered. Brands, which are built on trust, lose value. Sales become harder to generate. Customers defect, as loyalty deteriorates. Employees disengage from their jobs and the company mission.

So if you are looking for the fix for improving upon this sorry state of low-trust, join us here in the Garage as we uncover, evaluate and share emerging new ideas and solutions for what may be the most important marketing issue for our times.

We look forward to hearing from you.