Understanding the Burden of Trust for Business Leaders

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Every year since 2000, Edelman, a global public relations firm, has conducted an international survey to gauge people’s trust in our core institutions. This survey is called the Edelman Trust Barometer, and earlier this year Edelman released the most recent results based on responses from more than 36,000 respondents in 28 countries. The results paint a disconcerting but not surprising picture: high levels of mistrust that undermine our ability to communicate, collaborate and solve the problems we face.

But within this bleak landscape, the Edelman Trust Barometer finds hope in an unexpected place: business. Of the institutions studied, businesses are the most trusted, with 61% of global respondents saying they trust businesses, compared to 59% for NGOs, 52% for government and 50% for the media. In addition, businesses are seen as the most capable of solving social problems and delivering results, scoring a staggering 53 points higher than the main institution created to solve societal problems: government.

Companies are especially trusted by their own employees. Seventy-seven percent of respondents worldwide and 74% in the US said they trust their employer. On a more personal level, 66% of respondents said they trust their CEO and 74% said they trust their co-workers, a level of trust second only to scientists.

Related: Study Reveals America’s Crisis of Trust in Government, Business and Media

The burden of trust

Given these results, we as business leaders must ask ourselves: If our organizations have stores of an increasingly scarce resource—trust—what responsibility do we have to use that asset to help society solve the our problems?

Our employees and customers have already made up their minds. According to the Edelman Trust Barometer, 58% of people make purchase decisions, 60% make employment decisions and 64% make investment decisions based on their beliefs and values. Additionally, 60% want their CEO to speak out on controversial issues that concern them and 81% want CEOs to be personally visible on public policy issues. As a more specific example, according to the Deloitte Global 2022 Gen Z and Millennial Survey, nearly half of Gen Z (48 percent) and millennials (43 percent) say they have pressured their employer to take action against climate change, for example. .

It’s likely not surprising, but unwelcome news for CEOs. Historically, many business leaders have avoided wading into the murky waters of social affairs. Unless the topic had clear implications for the bottom line, it was considered at best a distraction and at worst dangerous to get involved.

A world in which every company engages in every issue that society deems important would be noisy, disorienting and unproductive. But the trust that people have placed in businesses, and specifically in their own employers, creates an opportunity, a responsibility and a path for business leaders to act. The challenge is deciding when to do it, especially given the pace of change, the division of society, as well as the constraints of time, attention and resources.

Related: How entrepreneurs can navigate the crisis of confidence

When should business leaders act on these issues?

The key for companies is to speak up and act when they have a credible reason to do so. Without a credible reason, corporate action becomes performative, confusing or even counterproductive, often eroding trust. But with a credible reason to act, corporate action has a much higher probability of achieving the three “i’s”: intentional, informed, and impactful. Companies can determine whether they have a credible reason to speak or act on an issue by examining the issue along three dimensions:

  • Mission impact: A company’s purpose for existing is defined by its mission and how it will achieve that mission is defined by its values. Therefore, the first step is to assess the extent to which an external event or problem affects an organization’s ability to fulfill its mission and values. For example, at Mineral, our mission is to help businesses and their people thrive at work. So let’s first look at whether a problem obstructs, enhances, or doesn’t affect entrepreneurs’ ability to build a thriving team. Issues such as anti-bullying, pay equity or mental health are highly relevant to what we consider ingredients for a thriving team, while an issue such as animal cruelty is less relevant.

  • Employee impact: The second dimension to examine is the extent to which an external event or problem affects a company’s employees. This requires looking beyond employees’ work experience to their overall life experience, including their families and communities. At Mineral, we have identified events and issues such as natural disasters, civil rights legislation, climate change and racially motivated hate crimes as those that materially affect the well-being of our employees and their families.

  • Impact on the client: The third dimension to examine is the extent to which a problem or event affects customers. Similar to the employee view, this view requires looking at the health and well-being of customers beyond a company’s business relationship with them. For example, at Mineral, our customers are small and medium-sized companies based in the United States. When the Covid pandemic led to the closure of businesses across the country in the spring of 2020, we joined campaigns to provide financial support to these businesses until the economy could reopen.

Related: CEO Activism: When Leaders Should Speak Up

Decision matrix

The more significant the impact on these dimensions, the more credible a company’s rationale for action. Here’s a simple decision matrix for deciding when and how to act based on these considerations:

Let’s start with the red areas. If an issue or event has a major impact on a company’s mission and its employees or customers, a company has a highly credible reason to act. And if he does, his action is likely to reflect the three “i’s” above: intentional, informed, and impactful. Corporate action could include using a website, social media, or thought leadership to promote a position or take direct action through volunteering or financial contributions.

Now to the orange areas. If an issue has a high impact on a company’s mission, but a low impact on its customers and employees, then the company should do further analysis to determine whether an action or public stance is appropriate. The same would be true if an issue has a high impact on customers and employees, but a low impact on the mission. Additional analysis may include assessing whether the company has a unique perspective to offer or whether it can take meaningful action to deliver results.

Now to the green and blue areas. If a problem or event has a high impact on customers, but a low impact on the mission and employees, a company can use external customer communication to respond to the problem. For example, external communication may mean sending an email to customers acknowledging the problem and the company’s position or response to it. Similarly, if a problem or event has a high impact on employees, but a low impact on the mission and customers, the company can use internal employee communication to respond to the problem.

The last is the gray area. If a problem or event has a low impact on the mission, employees, and customers, the company likely does not have a credible reason to act. This does not mean that the issue or event is not important to society. It simply means that the company’s involvement may not be productive, or at least productive enough, to justify taking time, attention, and resources away from other efforts. Of course, the company’s executives and employees could still participate in the matter as individuals in their personal capacity.

As noted in the Edelman Trust Barometer, companies now have a powerful and unique combination of advantages—trust and competition—but they must use them wisely. Business leaders must embrace the role their employees and customers have given them, focusing on issues where there is a credible reason to act and finding that credibility through impact on the company’s mission, employees and customers. With these steps, companies can confidently move from the conference room to the town square, driving positive change both for their own companies and at an even wider level.

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