A version of this post appeared on Risk & Compliance Magazine.
In today’s tumultuous media environment, rising callout culture and tense sociopolitical landscape, issues can develop into crises quickly, often wielding significant and long-lasting fiscal and reputational impact in a matter of minutes. This reality has underscored the value of trust, as data from the 2019 Edelman Trust Barometer clearly shows that trusted companies are far more resilient in the face of crisis, experiencing shorter and less damaging crisis lifecycles.
Trust matters
The benefits of trust extend beyond crisis management as well. Trusted companies, for example, financially outperform their respective sectors, are better able to retain and recruit key talent and are generally more resilient in the face of risk, operational and competitive threats. People are six times more likely to recommend their friends, family members or colleagues seek a job at trusted businesses, and 58 percent say they would defend a trusted company if they heard someone criticizing it. Further, trust lowers demand for regulatory scrutiny; only one-in-five people say they would lobby for more regulations for companies they trust versus two-in-five for distrusted businesses. As technology, financial services, health and transportation sectors experience unprecedented levels of consumer and regulatory scrutiny, trust becomes both a distinct competitive advantage and key indicator of a business’ resilience and ability to maintain fiscal health.
Simply stated, trust capital is perhaps a business’ best insurance policy against crises, risk and disruption today – and further, is also its best investment toward driving positive business impact tomorrow.
Central to this truth is that trust, unlike reputation, is a forward-looking metric. Trust looks beyond the current state of play, inherently offering a projection of the relationship dynamics and behavior exchange between an individual and a business or organization. In this way, trust serves as a predictor for how stakeholders will engage with and act on behalf of the business or organization in the future, removing much of the guesswork from risk management and giving the business and its leaders the confidence to pursue bold ideas and innovations without the fear of business-ending failure or inability to rebound quickly from strategic missteps or true crises events.
In short, trust capital is highly precious and valuable.
Measuring and managing trust
It comes as no surprise that cashing in trust capital is much easier than accruing it. Establishing and managing trust is a highly nuanced exercise requiring careful planning, continuous measurement and investment of resources specific to the business’ needs and abilities. An additional challenge is that many of the traditional mediums for reaching stakeholders to build trust are now fraught with their own trust deficits.
Media, previously among the most authoritative and trusted sources of information, for example, plummeted to the least trusted institution in 2018. As fear of fake news surged – with individuals worried about their ability to discern objective facts from misinformation and nearly seven-in-10 fearing false information could be used as a weapon – trust in and engagement with news fell.
In a striking reversal of that trend, this year’s Edelman Trust Barometer tracked a 22-point jump in news engagement over 2018. On its face, this data point might suggest that trust in media has rebounded, but a closer review reveals that fears of misinformation and perceived roadblocks to acquiring facts remain and that the fabric of trust in media, and in all institutions in 2019, is largely fragmented and fragile.
Polarities in trust in 2019 are perhaps most evident upon exploration of trust in media and political party affiliation. In the U.S., for example, people who voted in the 2018 midterm elections identifying as Democrats were significantly more trusting of the media than their Republican counterparts – apparent in the seismic 36-point trust gap between the two political groups.
Further, as people seek answers in a world marked by deep sociocultural and political divides, channels like social media are met with more skepticism than ever. Concerns about fake news and data privacy continue to cloud the media ecosystem, especially in Europe, Canada and the U.S., where the gap between trust between mainstream media and social media is as high as 40 points in some markets.
This data begs the question: In a world where establishing trust is so important, and the traditional channels for building and communicating it are compromised, how can it be done?
Employers lead in trust
Sustained and emerging trends in valued and trusted voices provide promise and direction. Owned platforms – blogs, websites, non-paid media – are now true table stakes for corporate communications in a low-trust media environment. They must be used more heavily to supplement earned and paid strategies.
Also of note is the evolved expectation society has for C-suite leaders to drive positive societal change within the environments they operate. As people seek reliable information, they are also looking for leadership. While trust in government lags business, CEOs are tasked with speaking up and out on issues that extend beyond delivering on the bottom line, including on matters like equal pay, discrimination, sustainability and job training.
Further, today, people hold more trust in their employer than in any single institution, with trust levels at 75 percent globally, 19 points more than business in general and 27 points more than government. Importantly, employees’ expectation that their employers join them in taking action on societal issues (67 percent) is nearly as high as their expectations of personal empowerment (74 percent) and job opportunity (80 percent). In this context, employees should be both critically and carefully considered as a key audience, and potential distributor of messages.
In summary, an investment in employees, addressing their fears and expectations, establishing a platform for the C-suite that allows them to clearly articulate where business strategy and values intersect, and careful selection of owned and select earned channels that authentically deliver those messages are the stepping stones to building trust and achieving the many benefits trust capital yields.
Kari Butcher is managing director, Edelman Intelligence.
