There is now the largest ever gap between trust in business and government.
This is just one of the findings from the 2014 Edelman Trust Barometer which was released today.
It is the firm’s 14th annual exploration of trust with 33,000 people being surveyed in 27 markets around the world on their trust in institutions, credible sources/channels and specific issues and perceptions impacting trust in business and government. Today’s results demonstrate a huge gap since the study was first conducted in 2001.
The overarching theme from today’s results is for businesses to lead the debate for change.
I wrote about the 2013 results via my blog last year. You can look back at it here. It found that peer-to-peer communication is key and revealed a crisis in leadership.
So what do this year’s results show?
Technology is the most trusted industry (79%), while Financial Services remains the least (50%). Small, medium and family-owned companies are more trusted than big businesses.
Looking at this year’s results, I recommend reading Richard Edelman’s commentary in full. He is President and CEO of the company and states: “Trust will be conveyed to those companies and industries that recognise the need to move beyond transactional thinking toward better understanding of the tangible actions that will solve the issues we face.”
The mistrust gap… “can be attributed to a continued destruction of trust in government that began in 2011, and a steady rise in belief in business since its nadir in 2008. In nearly half of the 27 nations we surveyed, there is a gap of more than 20 points. In a few nations, the divide is as much as 40 points. This is a profound evolution in the landscape of trust from 2009 where business had to partner with government to regain trust, to today, where business must lead the debate for change.”
Does that mean businesses need to push for deregulation? No, not according to Edelman, who say that would be “a monumental error in judgment.”
The barometer explores four factors that influence trust in business:
- Industry or Sector: The technology industry continues to lead as the most trusted sector. After changes in sourcing and management and a stronger focus on higher quality products, automotive, food & beverage and consumer packaged goods are showing strong trust rebounds over 2009. Media companies and banks continue to trail, seeing little movement since 2009 and, with additional incidents this year, are facing continued public and regulatory reprimand over ethics, business practices and malfeasance.
- Country of Origin (where a company is headquartered): Companies headquartered in BRIC nations (Brazil, Russia, India and China) continue to suffer a trust discount, not just compared to global perception of western-based companies but also among respondents in western markets. Globally, respondents rated companies based in Germany, a market known for efficiency and productivity, highest followed closely by Sweden, Switzerland and Canada, all of which are known to have strong policies aimed at protecting employees, communities and the environment. China, Russia and India came in at some of the lowest ratings, with no improvement over the past five years.
- Enterprise Type (private vs. public companies, or business size): Family-owned and small- & medium-sized business outperformed big business in all regions but Asia where publicly-traded and big business companies received the highest trust scores. A stronger distrust of state-owned companies exists globally. Comparatively, private companies are seen as more entrepreneurial and innovative than public companies; however, both types face perceived lack of transparency and being responsive to employee needs.
- Leadership/CEO: Overall, trust in leadership has plateaued. Academics and experts remain the most trusted source of information about companies, followed closely by technical experts and “a person like yourself,” which has increased significantly since 2009. CEOs and government leaders remain at the bottom of the list for both Informed and General Publics, with extremely low trust levels on key metrics. Only one in four General Public respondents trust business leaders to correct issues and even fewer – one in five – to tell the truth and make ethical and moral decisions.
Richard Edelman says: “We believe that trust is an asset that enterprises must understand and properly manage in order to be successful in today’s complex operating environment. Unlike reputation, which is based on an aggregate of past experiences with a company or brand, trust is a forward facing metric of stakeholder expectation.”
Looking through the results, it is clearly business’ turn to ascend the soapbox (or “bully pulpit” as it’s known in the US). Business has recovered trust from the crisis period because it is seen as having made demonstrable strides in transparency, supply chain and product quality.
What’s your experience in your organisation? Have you made demonstrable strides in transparency?
Edelman’s research clearly shows there now is an opportunity for business to make its case for change, as 79 percent believe business should be involved in formulating regulation in such industries as energy and food, while a majority feels government cannot go it alone. Eighty-four percent of respondents believe that business can pursue its self-interest while doing good work for society. This is, in fact, the license to lead, beyond the legal construct of license to operate, toward a new role of initiating change.
What is the role of CEOs?
This year’s results show only one in five people trust a business leader to tell the truth and CEOs have low credibility compared to other spokespeople (termed as ‘people like yourself’ – or peer-to-peer communication).
In order to build trust, CEOs need to embrace transparent communications and engage key stakeholders, employees and NGOs.
I’ve written numerous times on my blog about leadership and the importance of consistent communication and informed employee voice. Looking through the Trust Barometer results, there is clearly a new role for CEOs to consider.
Edelman recommends “the CEO become the Chief Engagement Officer, taking responsibility for establishment of the context in which change will occur. Instead of the usual inside game played by business, which relies on lobbying regulators or elected officials, the CEO will take the case to the broader publics to make the macro case for forward progress, not just the micro case for a given product or new factory.
“There should be the usual strong economic rationale, but there must be thoughtful consideration given to arguments that address emotion and risk, as well as societal benefit. This is especially important in industries such as energy, technology and food, where there are important personal consequences to systemic failures such as spills or hacking of personal financial data. And the CEO must have the courage to hear what is being said in the debate and be willing to change accordingly.”
Further reading: If you want to read more about CEOs as Chief Engagement Officers, see this review of a book of that name by John Smythe.
What do you think of the results? Do they tally with your expectations? One area I think it useful for professional communicators to read up on is the attributes of trust (slide 32 in this deck). The barometer offers insights for companies looking to build or restore trust and measures these 16 attributes against how important they are to building trust in business and how they are perceived as performing against each.
You can see a video overview of the results here:
You can see the full results here: