It turns out that you aren’t as rational as you may have thought. So, traditional economic theories that assume you are, are… well, flawed. We need an approach that accounts for self-interest and lazy mental short-cuts. Enter Behavioural Economics.
We’ve already told the foundation story of Behavioural Economics in our Management Thinkers series. There we looked at the two men who received Nobel Prizes in Economics for their work in the field:
The Trust Equation is an attempt to highlight the key features of trust in a professional setting. And it does a very good job.
And this is super-helpful to any professional, manager, or team leader, for a simple reason. Trust is your stock-in-trade. If your team, customers, and bosses don’t trust you, you have nothing but a job title. The extent to which you can get things done in a leadership role depends largely on trust.
But how do you inspire that trust? This is what the Trust Equation will show you.
If you are in the business of selling, who are you selling to? Do you know the characteristics of your customers? To target your marketing well, you need an archetype, which marketers call the ‘Buyer Persona’ or sometimes the customer or marketing persona. And sometimes they use ‘Avatar’.
Each of these terms means the same thing. If you do the work, up front, of characterising the people you want to sell to, you can better target your marketing.
The story of stakeholder engagement is a familiar one.
The term stakeholder starts as a new coinage. It becomes a word of art, understood by a select few. It then takes on a very public persona, widely used and at the heart of public discourse.
So managers seek to manage their stakeholders because it’s what they do. That’s their nature. Until we start to realise the category error that represents. And so, a gentle revolution brings us to today, and stakeholder engagement.