“Trust is essential for innovation, it is the currency that underpins it. When consumers can trust businesses, it gives businesses the space and security to innovate, and that innovation can unlock prosperity across Africa for all Africans.” -Amnah Ajmal, Executive Vice President for Market Development in Eastern Europe, Middle East and Africa at Mastercard.
In an era where digital transformation is reshaping the global business landscape, African boards face a unique challenge and opportunity. The continent’s young, digitally-savvy population presents a fertile ground for innovation, yet success hinges on a critical factor: customer trust. A recent study by Mastercard and Harvard Business Review Analytic Services reveals that digital innovations by businesses in Africa will fail unless accompanied by high levels of customer trust. This stark reality emphasises the vital role boards must play in guiding their organisations through the digital age while safeguarding and nurturing customer trust.
The importance of customer trust cannot be overstated. Research from PwC’s Global CEO survey demonstrates that after industry conditions, the level of customer trust is the most significant contributor to profitability. For African businesses, this trust is paramount, with 96% of family business owners acknowledging its critical importance. However, a concerning trust gap exists, with only 27% of customers expressing high trust in the companies they patronise, despite 84% of business executives believing their customers highly trust them.
As stewards of organisational success, boards must recognise that customer trust is not merely a marketing concern but a fundamental business imperative. In Africa, where over 60% of the population is under 25, embracing a digital world built on connection and purpose is essential.
However, this digital embrace comes with heightened expectations and risks. African consumers have shown a propensity to quickly withdraw their trust and spending in response to adverse events, raising the stakes for businesses operating in this dynamic environment.
Boards must ensure that their organisations are not only innovating but doing so in a manner that builds and maintains customer trust. This requires a delicate balance between digital advancement and trust-building measures. The Hierarchy of Trust Framework provides a valuable roadmap for boards to guide their organisations. At its foundation lies brand experience and value exchange, followed by data protection and personalisation, brand values and ethical practices, and ultimately, societal impact.
To effectively oversee this balance, boards should prioritise the following areas:
Data Security and Privacy: With economic activity increasingly moving online, organisations must ensure robust data protection measures are in place. Surprisingly, less than half of African businesses recognise the importance of data security and privacy to customers. Boards should require periodic updates on management’s progress in implementing data protection and reliability measures.
Service Reliability and Availability: Over 70% of African businesses acknowledge the paramount importance of service reliability. Boards should demand regular reports on system uptime, customer service metrics, and plans for infrastructure improvements to ensure consistent service delivery.
Ethical Practices and Values Alignment: African consumers have demonstrated a strong preference for businesses that act on causes they care about, with 80% prioritising such companies compared to a global average of 63%. Boards should guide the development of clear corporate social responsibility strategies that align with local values and concerns, such as environmental sustainability, support for small businesses, and women’s economic empowerment.
Digital Literacy and Inclusion: As guardians of long-term organisational success, boards must advocate for initiatives that bridge the digital divide. This includes supporting digital literacy programess for both employees and customers, and ensuring that the benefits of digital transformation are accessible to all.
Infrastructure Investment: The IFC report highlights significant opportunities for digital transformation across Africa, with more than 600,000 formal businesses and 40 million micro businesses poised to benefit. Boards should diligently oversee and approve strategic investments in digital infrastructure, ensuring management conducts thorough ROI assessments and aligns infrastructure spending with the organisation’s long-term strategy and competitive positioning.
Transparency and Communication: In an era of rapid digital change, clear and consistent communication is crucial. The board must hold management accountable for maintaining clear, consistent, and ethical communication practices that build trust with customers.
Continuous Innovation with Trust: Boards must foster a culture of innovation that places customer trust at its core. This involves encouraging management to develop and implement digital solutions that enhance efficiency and strengthen customer relationships and trust.
As boards guide their organisations through this digital transformation, they must also be mindful of the unique challenges and opportunities present in the African context. The high cost of technology, with African enterprises facing prices up to 35% higher than other regions for similar software and equipment, presents a significant barrier. Boards should advocate for strategic partnerships and investments that can help overcome these cost barriers, potentially exploring local tech solutions that may be more cost-effective and tailored to African markets.
Moreover, boards must push for integration into global markets while supporting the growth of local digital ecosystems. The African startup scene is one of the fastest growing in the world, offering immense potential for innovation and economic growth. By encouraging collaborations with local startups and tech hubs, boards can help their organisations tap into this vibrant ecosystem, fostering innovation that is both cutting-edge and culturally relevant.
The digital transformation of African businesses holds the promise of enhanced productivity, increased wages, and better-quality jobs. However, realising this potential requires a concerted effort to build and maintain customer trust. Boards play a crucial role in this process, ensuring that their organisations navigate the digital landscape with integrity, transparency, and a deep commitment to customer values.
As Africa stands on the cusp of a digital revolution, its businesses have a unique opportunity to leapfrog traditional development stages and establish new paradigms of customer trust in the digital age. By embracing digital transformation while steadfastly focusing on customer trust, African businesses can compete on the global stage and set new standards for customer-centric innovation. The boards that successfully navigate this balance will position their organizations at the forefront of Africa’s digital future, driving prosperity and growth across the continent.
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