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.

To Gain Public Trust, CEOs Must Dare To Engage Risk

By Tony Shelton, Executive Vice President, Crisis and Training

In the wake of the BP spill, automotive recalls and banking fiascos, the public is even less interested in giving the benefit of the doubt to companies that seem more interested in positioning for a legal defense than in making things right.

In fact, Edelman’s 2011 Global Trust Barometer shows unmistakably that today’s CEOs have to be able to demonstrate accountability and action in a crisis. Trust must be earned, and companies today must work even harder to earn it.

Recently, Edelman’s U.S. Crisis Leadership Team -- including Edelman Southwest’s Allen Caudle and Tony Shelton -- met in San Francisco to examine how best to prepare and support executives in successfully engaging new levels of reputational risks in this age of heightened expectations.

The Edelman crisis network is uniquely qualified and experienced to prepare executives for increased scrutiny and responsibility.

For example, Edelman is the company that:

• First used the Internet as a crisis response tool

• Counseled U.S. Airways following the emergency landing of US Airways Flight 1549 in the Hudson River

• Headed up communications for Air France following the disappearance of its flight off the coast of Brazil

• Counseled Imperial Sugar following a deadly explosion at its plant in Georgia.

With this experience as a foundation, Edelman’s crisis practice leaders are preparing executives to engage reputational threats of a ferocity that could hardly have been imagined even five years ago.

A major concept is that the expression of the risk -- whether it is a company whistleblower on 60 Minutes, a Congressional investigation or a sudden crisis event -- must be seen as basic subject matter. The higher level of reasoning that will guide the executive in communication in such situations crosses boundaries of skill sets, media and stakeholder groups.

Successful risk engagement goes beyond protection of the corporate reputation. Its goal must be nothing less than advancement of the reputation.

Whenever the next major oil spill or high-profile recall comes, Edelman’s crisis and risk experts across the country and around the world will be ready to support, advise and guide their clients in this critical pursuit.