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 assess people’s trust in our leading institutions. This survey is called the Edelman Trust Barometer, and earlier this year Edelman released the most recent results based on responses from over 36,000 respondents across 28 countries. The findings paint a disconcerting but unsurprising picture: high levels of distrust that undermine our ability to communicate, collaborate and solve the problems we face.

But within this bleak picture, 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 claiming to trust business, compared to 59% for NGOs, 52% for government and 50% for the media. Furthermore, the business is considered to be the most capable of solving society’s problems and achieving results, scoring a surprisingly 53 points higher than the primary institution created to solve society’s problems: the government.

Companies are particularly popular with their employees. 77% of respondents globally and 74% in the US said they trust their employer. On a more personal level, 66% of respondents said they trusted their CEO and 74% said they trusted their peers, a level of trust second only to scientists.

Related: Study reveals America’s crisis of confidence with government, business and media

The burden of trust

In light of these findings, business leaders must ask themselves: if our organizations have reserves of an increasingly scarce resource – trust – what responsibility should we use that resource to help society solve our problems?

Our employees and customers have already decided. According to the Edelman Trust Barometer, 58% of people make purchasing decisions, 60% make business decisions, and 64% make investment decisions based on their beliefs and values. Additionally, 60% want their CEO to speak up on controversial issues they care about and 81% want CEOs to be personally visible on public policy matters. As a more specific example, according to the Deloitte Global 2022 Gen Z and Millennial Survey, nearly half of Gen Z (48%) and millennials (43%) say they have put pressure on their employer to take action on climate change. , for example .

This is probably unsurprising but unwelcome news for CEOs. Historically, many business leaders have avoided diving into the murky waters of social issues. Unless the problem had clear implications for profits, getting involved was at best distracting and dangerous at worst.

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

Related: how entrepreneurs can tackle the crisis of trust

When should business leaders take action on these issues?

The key for companies is to speak up and act when they have a credible reason for doing so. Without a credible reason, corporate action becomes performative, confusing or even counterproductive and often erodes trust. But with a credible reason for action, corporate action is much more likely to hit the three “i’s”: intentional, informed, and impactful. Companies can determine if they have a credible reason to speak or act on an issue by examining the issue across three dimensions:

  • Impact on the mission: 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 companies and their people thrive on the job. So, let’s first look at whether an issue hinders, improves, or doesn’t affect employers’ ability to build a thriving team. Issues like anti-harassment, wage fairness or mental health are very relevant to what we consider ingredients for a thriving team, while an issue like animal cruelty is less relevant.

  • Impact on employees: The second dimension to look at 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 hate crimes as those that materially impact the well-being of our employees and their families.

  • Impact on the customer: The third dimension to look at is the extent to which a problem or event affects customers. Similar to the employee point of view, this view requires considering 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 businesses based in the United States. When the Covid pandemic caused nationwide business closures in the spring of 2020, we joined campaigns to financially support these businesses until the economy reopened.

Related: CEO Activism: When Leaders Should Talk

Decision matrix

The more significant the impact on these dimensions, the more credible is why a firm acts. Here is a simple decision matrix to decide when and how to act based on these considerations:

Let’s start with the red areas. If a problem or event has a strong impact on a company’s mission and its employees or customers, a company has a highly credible reason for action. And if it does, its action is likely to reflect the three “i’s” above: intentional, informed, and impactful. Business 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 strong impact on a company’s mission but low impact on its customers and employees, the company should conduct further analysis to determine if a public action or position is appropriate. The same would be true if an issue has a high impact on customers and employees, but low impact on the mission. Further analysis may include evaluating whether the company has a unique perspective to offer or whether it can take meaningful action to achieve results.

Now to the green and blue zones. If an issue or event has a high impact on customers, but low impact on the mission and employees, a company can use external communication with customers to respond to the problem. For example, external communication can mean sending an email to customers acknowledging the problem and the company’s location or response to it. Likewise, if an issue or event has a high impact on employees but 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 doesn’t have a credible reason to act. This does not mean that the issue or event is not important to society. It simply means that company involvement may not be productive, or at least productive enough, to justify taking time, attention and resources away from other efforts. Company executives and employees could certainly still engage in the matter as individuals in a personal capacity.

As noted in the Edelman Trust Barometer, companies now have a powerful and unique combination of benefits – trust and expertise – but they need to use them wisely. Business leaders must embrace the role their employees and customers have bestowed on them, focusing on issues where there is a credible reason to act and finding that credibility through impacting the company’s mission, employees and customers. By following these steps, businesses can confidently transition from the conference room to the town square, driving positive change both for their companies and on an even broader level.

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