How frustrated are your customers?

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Rudolf Mills
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presentation is the sole property of Consulta Research (Pty)

manner, without the written consent of the proprietary

1 All rights strictly reserved. The intellectual capital contained and illustrated in this presentation is the sole property of Consulta Research (Pty) Ltd and may not be copied, infringed upon in whatever manner, without the written consent of the proprietary owners FranklinCovey South Africa National Trust Index Affiliated to: How frustrated are your customers?

Consulta & FranklinCovey SA 2 Consulta has partnered with FranklinCovey SA to develop the research model for the FranklinCovey SA National Trust Index.

2 Consulta & FranklinCovey SA 2 Consulta has partnered with FranklinCovey SA to develop the research model for the FranklinCovey SA National Trust Index. Utilising the intellectual property vested in FranklinCovey about the Speed of Trust, Consulta used their research expertise as well as their position as a reputable, independent research supplier, to develop a robust scientific model. Creating a high trust culture ultimately results in increased organisational excellence and performance. Trust, therefore, provides the proverbial fertile soil for business ideas and concepts to grow. FranklinCovey South Africa aims to provide organisations with the platform to build the skill-set that is required to earn and benefit from the characteristic of trust. The development of the FranklinCovey SA National Trust Index originated from the realisation that trust is the catalyst that will enable South African organisations and society to thrive. This Index will provide a national benchmark of the perception of trust in corporate South Africa. Consulta is proud to be a partner and the independent research supplier for FranklinCovey South Africa.

National Index Development 3 Scientific rigor Our founding principles are built on academically aligned, scientific rigor.

accurate analysis Peer review transparency and full audit-trail quality control Experience in establishment of a national

(SAcsi). The SAcsi is a licensed American Customer Satisfaction Index Measure.

Media experience In 2015 the SAcsi generated media exposure worth R9m in Advertising Equivalent Value (AEV).

3 National Index Development 3 Scientific rigor Our founding principles are built on academically aligned, scientific rigor. The research we do are aligned to academic principles of: Robust theoretical foundation Scientific sampling Robust and accurate analysis Peer review transparency and full audit-trail quality control Experience in establishment of a national index Consulta and our CEO, Prof Adré Schreuder is the founder and custodian of the South African Customer Satisfaction Index (SAcsi). The SAcsi is a licensed American Customer Satisfaction Index Measure. and measured on over 20 countries across the world. Media experience In 2015 the SAcsi generated media exposure worth R9m in Advertising Equivalent Value (AEV). The EVA for 2016 is trending higher than Consulta, through the SAcsi has strong media communication relationships and experience. Credibility Consulta has a reputation for being credible and trustworthy. We will be able to produce research results that are indisputably credible.

4 Research Methodology

5 Questionnaire Design 5 Consulta utilise academic research standards in the design of a questionnaire. The process included A thorough workshop between Consulta and FranklinCovey FranklinCovey Speed of Trust material, readings, and existing model Additional literature review, including academic, internationally published academic articles Following this, the questionnaire was developed by a team of experienced researchers. This team consisted of researchers with several years practical business research experience as well as academic qualifications. Rigorous, scientific questionnaire design, in line with academic standards and international index development principles Finally the questionnaire was tested for thoroughness and also to ensure that it was not too long.

6 Questionnaire Outline 6 1. Screening questions Consent to participate Able to rate Trust Company name (Respondents could indicate that they do not want to name the company they are rating) 2. Framing of questions Respondents needed to rate: 1. Team: The combined perception of the people you work with and are in direct contact with on a regular basis. This will include your peers, your manager as well as your direct reports 2. The company as a whole 3. Questions Respondents were asked 33 questions that tested Trust within their organisation, according to the FranklinCovey Speed of Trust Model 4. Demographic questions

7 Population & Sample 7 Target Population Employees and managers of large and medium sized companies in South Africa A sample frame to reach a representative view of employees at large to medium sized organisations was utilised. Several national databases with company and employee detail was used to invite respondents to participate Total Sample Realised: 1052 interviews A total of 1052 interviews was received and analysed. The interviews are made up of a broad spectrum of company size, employee and managerial level, Proving and Business Industry

8 Sample Breakdown 8 Total Sample Realised: 1052 interviews A good national representation was achieved, although results was deliberately skewed towards senior and top management as well as companies with more than 500 employees MANAGEMENT LEVEL Staff, 15% Senior & Top Management, 45% Junior & Middle Management, 40% More than 500 employees, 45% NUMBER OF EMPLOYEES 1-20 employees, 29% employees, 26%

9 Interview Methodology 9 Interviews was conducted through an online web-survey. Potential respondents received an letter from FranklinCovey explaining that they will be contacted by Consulta as an independent research company Respondents was assured of their anonymity This was followed by a invitation with a link to the online survey

10 Model Results FranklinCovey SA - National Trust Index

11 Model Validity & Reliability 11 The FranklinCovey SA National Trust Index Model is both VALID and RELIABLE according to international academic research criteria. VALIDITY: The research measures TRUST, as well as the dimensions of trust, as set out in the questionnaire. RELIABILITY: The results will remain stable and has little randomness, it measures reality Dimension Cumulative Explained Variance Cronbach Alpha Integrity % Intent % Capabilities % Results % Relationship % (13 Behaviors) This is very important: Basically it means that the results can be trusted to represent the concept and dimensions it is designed to measure and that it represents reality. The results can be trusted to be true!

12 Model Fit 12 The pinnacle of rigorous, robust, scientific research is the development of a Structural Equation Model (SEM). Such as model indicates that the results represent a large complex conceptual construct; such as TRUST. Furthermore, such a model allows us to understand what are the underlying drivers of this construct. It helps us to break TRUST down into the dimensions that make it up and understand the contribution of each dimension towards this larger construct. The FranklinCovey SA National Trust Index Model met all the criteria to be accepted as a robust, scientific Structural Equation Model, i.e.: Bentler Comparative Fit Index: 0.872

13 FranklinCovey SA National Trust Index Model 13 The Model structure as well as the contribution of each dimension towards the higher level concept is illustrated below. The percentage indicated is NOT the Index scores, but rather the underlying strength of contribution of each underlying dimension to the higher level concept 3 Items 3 Items 3 Items 3 Items Integrity Intent Capabilities Results 18% 13% 24% 45% Self Trust (4 Cores of Credibility) FranklinCovey South Africa National Trust Index 46% Overall Team Trust Overall Company Trust 97% 73% Company Market Trust 13 Items Relationship Trust (13 Behaviors) 100% Relationship Trust (13 Behaviors) 54%

14 FranklinCovey SA National Trust Index - RESULT Items 3 Items 3 Items 3 Items 3 Items Integrity 60 Intent 57 Capabilities 62 Results 63 Relationship Trust (13 Behaviors) Self Trust (4 Cores of Credibility) 62 Relationship Trust (13 Behaviors) FranklinCovey South Africa National Trust Index Ov erall Team Trust Ov erall Company Trust Index Score Company Market Trust

15 FranklinCovey SA National Trust Index - Interpretation 15 The FranklinCovey SA National Trust Index stands at 57 This is a composite score, consisting of all the underlying dimensions and contributing towards the scores according to the percentage weights determined by the Structural Equation Model It is not a percentage it is an INDEX SCORE, with the possible score ranging from 0 to 100 The Overall Company Trust Index Score is the main index score, and explains or predicts 73% of an organisation's Market Trust Overall Company Trust Index Score is made up by Team Trust Team Trust consists of Self Trust (4 Cores of Credibility) as well as Relationship Trust (13 Behaviors of High Trust). We can see that Relationship Trust is rated the lowest- it also contributes more (54%) to the Team Trust score, making it relatively slightly more important Self Trust is made up by a number of sub-dimensions, of which Results makes the highest contribution

FranklinCovey SA National Trust Index - Interpretation 16 Using this particular methodology, an Index Score of below 70 is considered LOW, and an Index Score of below 60 is considered VERY POOR!

16 FranklinCovey SA National Trust Index - Interpretation 16 Using this particular methodology, an Index Score of below 70 is considered LOW, and an Index Score of below 60 is considered VERY POOR! Index Score Result Interpretation Above 80 Very Good Fair/ Good Poor Below 60 Franklin Covey National Trust Index Score 57 SAcsi South African Customer Satisfaction Index 76 ACSI American Customer Satisfaction Index 74 Very Poor Compared to other National Index scores, using the same methodology, a National Trust Index of 57 is particularly low.

17 Detailed Results & Interpretation

18 FranklinCovey SA National Trust Index - Province 18 On a Provincial level it is clear that Western Cape and Kwazulu Natal have relatively high Trust Levels. Gauteng has a Trust Index Score of 56 which is very poor. Due to small sample sizes the Other Provinces are grouped together. This combined view also indicate very poor trust amongst these provinces FranklinCovey South Africa - National Trust Index - Province 56 Gauteng 63 Western Cape 61 Kwazulu Natal 55 Other Provinces

19 FranklinCovey SA National Trust Index Company Size 19 Clearly companies with more than 50 employees have major trust concerns, with a Trust Index of only 50. Mid-sized companies also have a very low Trust Index with small companies clearly sitting on a relatively good Trust environment. What was also interesting is that for small companies, the Company Trust was in fact higher than the Team Trust sub-score. For large companies the Company Trust is much lower than the Team Trust score, even though the Team Trust score is also very low. This is a clear indication that suspicion and distrust rises in larger groups of people FranklinCovey South Africa - National Trust Index - Number of Employees 50 More than 500 employees employees employees

20 FranklinCovey SA National Trust Index Management Level 20 What stands out in the Management Level view is that Junior & Middle Management has by far the lowest Trust Index Score. Companies in South Africa will need to invest seriously in this group if they want to improve Trust and business performance. This could also indicate that Senior & Top Management might live under a delusions that there is high Trust in their organisations, while in the ranks below them very low trust exists FranklinCovey South Africa - National Trust Index - Management Level Staff Junior & Middle Management Senior & Top Management

FranklinCovey SA National Trust Index Management Level 21 A further breakdown of the FranklinCovey National Trust Index of 57 indicates that this is made up of 52% of the respondents giving

21 FranklinCovey SA National Trust Index Management Level 21 A further breakdown of the FranklinCovey National Trust Index of 57 indicates that this is made up of 52% of the respondents giving their organisation a LOW TRUST rating. The low Trust Index score coupled with the high percentage of LOW TRUST rating indicates that Trust is a serious problems amongst companies in South Africa.

22 The Team

Key Account Team Prof Adré Schreuder Kobus Badenhorst CEO: Consulta Research

co.za T: +27 12 665 6200 F: +27 86 582 2858 M: +27 82 452 1666 Client Executive

23 Key Account Team Prof Adré Schreuder Kobus Badenhorst CEO: Consulta Research (Pty) Ltd, Founder & Chair of SAcsi Consulta Research (Pty) Ltd. E: T: F: M: Client Executive Consulta Research (Pty) Ltd. E: T: F: M: Judith Claasen Project Executive Consulta Research (Pty) Ltd. E: T: F: M:

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