Yesterday I had to speak in the Open Forum here in Davos, speak to real people from the village and visitors who do not get access to the Annual Meeting of the World Economic Forum. It reminded me of a few things that are important when restoring confidence as industrialists; it also reminded me of the time when I started at Nestlé as an ice-cream salesman. So let me talk to you as an ice-cream salesman.

We have all seen recent surveys about the loss of trust in managers, companies, etc. There is indeed a problem here. But we should also remember that many of these surveys are prepared by PR consultancies, and usually they present it with an expensive plan how to improve the confidence again.

Let me quote a somewhat different survey done with – and for – real people. It is probably as biased and little reliable as most the others, but with a different bias overall. You may know Scott Adams. If not, you may know his Dilbert comic-strip, the computer engineer lost in a world of incompetent managers. Adams made a poll among the visitors to his Internet site with a total of 17,000 answers. His question, using simple language: who are the weasliest guys. A weasel means somebody who is trying to get away with something or everything.

Top on his list of weasels – and therefore considered worst – are:

• news reporters,
• second-worst came out the lawyers,
• third politicians,
• and only on fourth place tobacco executives.

I am not going to read too much into this. One thing is clear – and we all know it: if you ask in a certain way, you get certain answers. And if you ask simple and straightforward questions, you may get some common sense.

Maybe two more points: a 'traditional' poll on weasels that includes news reporters will probably never be published in the media; and one that includes lawyers will be stopped before it starts. So let us not exaggerate things. Confidence in managers is not as high as it was, but partly this is cyclical, and partly it looks worse than it actually is when taken out of context.

My second point goes in the same direction. We must see the events of the last two years in their broader context. Some of these events were accidents or due to misjudgment; and they were punished quickly and severely by the market. There were also illegal things happening and the courts are taking care of these. But 99% of companies are healthy – now at a somewhat lower share price – and their managers work with the necessary integrity.

However, according to a recent interview of the Founder President of WEF, there are only unhappy senior managers today. I, for my part, am not unhappy, and I see no reason why I should be. Somebody who has no confidence in himself cannot gain the confidence of the employees and people outside a company.

At the same time, when you decide and act, when you have responsibility and the
competence to move things of a certain size and importance, it is natural that you also make mistakes and that you are criticized. We should accept criticism, even if it is sometimes unfair. Of course, we must also understand that we have a responsibility beyond the quarterly figures.

And it takes trustworthy and moral people at all levels of a company. It is even worse to stand by and see that somebody does something wrong and not react than it is to do something wrong. But this is nothing we only discovered in the last five or ten years. This is how we have been managing and selecting people at Nestlé and innumerous other companies. It is not standards that build confidence and trust. Trust is only on merit: it comes from integrity, quality and reliability.

Up to this third and last point, you realized this, I am not overly pessimistic. But there are issues that must be addressed. One of the issues – I already alluded to it – is short-term thinking, financial forecasting and quarterly profit statements.

It is not lack of regulation of corporate governance that has caused the recent slippages and crises in the corporate world. It has more to do with behavior driven by financial analysts, quarterly reporting, the media and the eagerness of certain managers to please everybody all the time.

We are here in a mountain area; and what happens in the corporate world has a lot to do with avalanches that threaten from time to time. It starts with a small snowball: a target of sales or profit for a given quarter was announced. But towards the end of the period in question the manager sees he will not be able to reach the target.

We all know how easy it is to temporarily increase sales through loading, or to increase profit by reducing marketing expenditure, etc.. The next time, when everybody expects that you will do even better, you have not only reach the even more ambitious target numbers, but you also must compensate for the loading of the earlier period. Step by step, the small snowball gets bigger and finally develops into an avalanche.

For the role of the media: we have come to the stage that they no longer report about
companies, but about what analysts say concerning companies. And the analysts do not check their own forecasts against reality, but reality against their forecasts, and from time to time come to the conclusion that the company "has not performed up to their expectations".

As I said, better rules for corporate governance and more detail in rules for accounting cannot overcome this kind of risk. We must overcome the real issue of companies being driven by short-termism and expectations that the business will always go up. The events of the last two years were very healthy in that respect, provided we draw the right conclusions.

There is one further issue that worries me, and this cannot be solved with new standards of corporate accountability either. It is the language we use to communicate, the kind of consultant's language here in Davos, and the loss of our own understanding of important things. I mean the loss of understanding how markets work, where they contribute wealth, why shareholder value is important for the economy and the society and so on.

My conclusion and final point: let us find back to a straight common language among us business leaders and responsible politicians about what markets do, what they are able to achieve for the people. Let us talk and be simple and straightforward like an ice-cream salesman.