The Business of Trust

By Teresa Henderson, Executive Vice President and General Manager

On January 25, Edelman’s 2011 Trust Barometer findings (http://www.edelman.com/trust/2011/)  were presented by CEO Richard Edelman at the World Economic Forum in Davos. And while trust in business, government, media and NGOs is up globally in comparison to 2010, trust in business in the U.S. is down. Surprised? Neither were we.

Also unsurprising are the industry sectors that are the least trusted in America. Banks and financial services companies ranked 15th and 16th out of 16 sectors measured in the study. Insurance companies fared only slightly better, and media companies ranked low, too. One oddity in the study: the relatively low trust Americans have in beer and liquor companies, which have typically fared well financially during recessionary times.

If it’s bad to be a broker, it’s good to be a geek: Technology once again ranked as the most trusted industry in the U.S. and, in fact, gained trust in the past 12 months. It’s also good again to “drive American” as successful rebounds by U.S. car companies fueled a jump by the automotive industry to number 2 on the most trusted list. My father, who spent most of his career at Chrysler Corp. and proudly wore a tie tack featuring the Chrysler pentastar, sometimes even on the weekend, would be proud.

Trust is proving to be money in the bank for today’s companies and has become a business imperative. When a company is trusted, 52 percent of people will believe positive information about the organization after hearing it only once or twice. Only 14 percent will accept negative information on the first or second go-round. Conversely, organizations that are not trusted get very little benefit of the doubt: 59 percent will believe negative information the first or second time it’s heard but only 9 percent will believe the first or second positive message.

So what should companies do if their organization or their industry at large is suffering from a deficit of trust? Here are four simple first steps to take – and stick to.

1. Align profit and purpose for social benefit. Today’s consumer is willing to pay more for goods and services offered by companies who are socially responsible. Today’s consumer is also willing to punish bad actors by not doing business with them. To paraphrase Spike Lee: do the right thing. Give back in a relevant way.

2. Speak up with multiple trusted voices. In addition to the CEO, call on credentialed academicians or subject matter experts to tell your story in a transparent fashion. And don’t rely on just a press release. Use video and online vehicles. Just use them appropriately.

3. Leaders must walk the walk and be accountable for their actions. This one is simple. Employees, boards of directors, shareholders and consumers expect those who are entrusted with running organizations to be fiscally, socially and morally responsible. There is no alternative.

4. Make trust deposits. Conserve water. Find ways to reduce your carbon footprint. Allow your employees to identify a non-profit organization that could benefit from their volunteer hours. Sponsor a health-awareness event in your community. These are just a few things that can be done in short order and it’s perfectly OK to talk about the steps your company is taking. (Get your employees involved and they will help you tell your stories without being asked.) You’ll be in a better position to weather any future storm.