Anna Bernasek found she had a “craving” to move forward after the financial crisis of 2008. The result is her provocative book, The Economics of Integrity. On one level, it means that companies can do well by doing good. But she goes one further, positing that companies and organizations that build up trust with customers, and are genuinely committed to integrity, are ultimately going to be more profitable.
If economics, much less an economics book, is not your cup of tea, never fear. Anna is a financial journalist and her new book is highly readable. It’s constructed as a series of linked stories that explores, among other things, how trust between multiple parties underlies the milk industry in the US, the ATM system and the Federal Reserve Bank. She also analyzes what trust means when it comes to a global brand and, unluckily perhaps, chooses Toyota as her example.
Anna is one of four authors, along with Seth Godin, who will be speaking at the April 20, 2010 re-Set Business in New York. This is an intriguing celeb-author event produced by HarperStudio, sponsored by Vanity Fair and masterminded by the very cool Debbie Stier (SVP and Associate Publisher of HarperStudio). Seth Godin is moderating the author panel that includes Anna along with Gary Vaynerchuk, Tom Peters and Michael Eisner. Attendees get a signed copy of each of the authors’ newest books.
See my blog post about Tom Peters’ new book, The Little BIG Things: Memo to Tom Peters From the Department of Punctuation!!
Register here for April 20, 2010 re-Set Business and use the code re-setfriend to get 10 percent off. The event is being held at the spiffy Harvard Club in New York. I’m attending and looking forward to it.
Q & A with Anna Bernasek
DW: I love that your book was born out of your “craving” to move forward after the financial crisis of 2008. Talk about that as the impetus for writing a book.
AB: At first I thought about what went wrong and as a matter of history it’s interesting to think about that. But focusing on what went wrong isn’t nearly as important as focusing on what we ought to do. And once I started down that line it was clear that integrity is the key. In fact, the more I thought about it the more important it appeared to be. One thing led to another and then, my book.
DW: You don’t use words like crowdsourcing or Twitter or blogs when you talk about the “critical role of cooperation in economic activity.” Do you think the growing pervasiveness of social media can have a positive impact on how companies do business with “integrity,” the keystone of your book?
AB: Social media are new, of course, but the effects have been around for a while. Despite pervasive advertising, word of mouth and social norms remain key features of almost any business activity. The new modes of connecting people just amp it up. Good news and bad, truth and error now propagate geometrically, at the speed of light. It’s a challenge to think about, but it’s also the biggest opportunity of our lifetimes. And right now we’re just scratching the surface.
DW: One of your case studies is about the piles of gold in the vault 80 feet below the Federal Reserve Bank of New York’s building in lower Manhattan. Tell us what it was like to walk through the vault and see stacks of gold bricks worth $200 billion (in 2008)? Did you feel like you were in a James Bond movie?
AB: You know, getting in there feels a little spy-like. Or maybe like Harry Potter’s Gringots. But piles of yellow metal are ultimately just piles of yellow metal. The only reason gold is so precious is that it represents something very fundamental to our economy: money itself. Stripped of the mystique, money is just something we all agree has value. So it’s cool to think of all that gold down there, but in the end what happens upstairs every day in the rest of the New York Fed is even more impressive.
DW: One of your chapters is about Toyota as a trusted brand. What will you say about Toyota when you’re speaking about your book, given the recent publicity about failed brakes and recalled cars?
AB: Funny you should ask. The day after publication, the Wall Street Journal’s “Heard on the Street” reporter was calling me up, asking if I wished I picked another example. And I told him no way, what Toyota did over its history is a great example of building a business based on integrity. If it turns out that Toyota loses business because of a subsequent lapse of integrity, well that would just make my point. But personally, I’m waiting to see all the facts come out. Toyota isn’t a master of managing public relations in a crisis, but they are smart people and at least historically they have overcome some pretty tough obstacles to become a very successful company.