Understanding the weight 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 major institutions. That survey is called the Edelman Trust Barometer, and earlier this year Edelman released the latest results based on responses from more than 36,000 respondents in 28 countries. The results paint a disturbing 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 picture, the Edelman Trust Barometer finds hope in an unexpected place: business. Of the institutions surveyed, business is the most trusted, with 61% of global respondents reporting that they trust business, compared to 59% for NGOs, 52% for government and 50% for the media. In addition, business is seen as the most capable of solving societal problems and getting results, scoring a staggering 53 points higher than the primary institution created to solve societal problems: government.

The business is especially trusted by its own employees. Seventy-seven percent of respondents globally and 74% in the US say they trust their employer. On a more personal level, 66% of respondents say they trust their CEO and 74% say they trust their colleagues, a level of trust second only to scientists.

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

The burden of trust

Given these results, business leaders must ask themselves: If our organizations are stockpiled with an increasingly scarce resource—trust—what responsibility do we have to use that asset to help society solve our problems?

Our employees and customers have already made up their minds. According to the Edelman Trust Barometer, 58% of people make purchasing 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 they care about, 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, almost half of Gen Z (48%) and Millennials (43%) say they have put some pressure on their employer to take action on climate change, for example .

This is probably not surprising, but unwelcome news for CEOs. Historically, many business leaders have shied away from wading into the murky waters of public affairs. Unless the problem had clear implications for the bottom line, it was considered distracting at best and dangerous at worst to intervene.

A world where every business deals with every issue society deems important would be noisy, disorienting and unproductive. But the confidence that people vote in business, and in particular in their own employers, creates opportunity, responsibility and a pathway for business leaders to act. The challenge is deciding when to do this, especially given the speed of change, the bifurcation in society, and the constraints of time, attention and resources.

Related: How entrepreneurs can deal with a crisis of confidence

When should business leaders act on these issues?

The key for business is to speak up and act when there is a credible reason to do so. Without a credible reason, corporate action becomes performative, confusing or even counterproductive and often undermines trust. But with a credible reason for action, corporate action is much more likely to hit the three “i’s”: intentional, informed, and impactful. A business can determine whether it has a credible reason to speak or act on an issue by examining the issue along three dimensions:

  • Mission Impact: A company’s purpose for existence is determined by its mission, and how it will achieve that mission is determined by its values. Therefore, the first step is to assess the extent to which an external event or problem affects the organization’s ability to fulfill its mission and values. For example, at Mineral, our mission is to help businesses and their employees thrive at work. So we first look at whether an issue is hindering, enhancing, or not affecting employers’ ability to create a thriving team. Issues such as anti-bullying, fair pay or mental health are highly relevant to what we consider the ingredients of a thriving team, while an issue such as animal cruelty is less relevant.

  • Impact on employees: The second dimension to examine is the extent to which an external event or problem affects the employees of the business. This requires looking beyond employees’ work experiences to their entire life experiences, 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 significantly affect the well-being of our employees and their families.

  • Impact on the customer: The third dimension to examine is the extent to which a problem or event affects customers. Like the employee perspective, this perspective requires considering the health and well-being of customers outside of the business’s commercial relationship with them. For example, at Mineral, our customers are US-based small and medium-sized businesses. When the Covid pandemic caused businesses across the country to close in the spring of 2020, we joined campaigns to financially support these businesses until the economy could be reopened.

Related: CEO activism – when leaders need to speak up

Decision matrix

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

Let’s start with the red zones. If a problem or event has a strong impact on the company’s mission and its employees or customers, the company has a very good reason to act. And if he does, his action will likely reflect the three “i’s” above: intentional, informed, and impactful. Corporate action can 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 the company’s mission but a low impact on its customers and employees, then the company should do further analysis to determine whether 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. Further 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 area. 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 address the problem. For example, external communication may mean sending an email to customers confirming the problem and the company’s position or response to it. Likewise, 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 address the problem.

Last is the gray area. If a problem or event has little impact on the mission, employees, and customers, the company probably has no 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. The directors and officers of the company could certainly still engage in the matter in their personal capacity.

As outlined in Edelman’s Trust Barometer, businesses now have a powerful and unique combination of advantages—trust and competence—but they must use them wisely. Business leaders must embrace the role their employees and customers have assigned to them, focusing on issues where there is a credible reason to act and finding that trust through impact on the business mission, employees and customers. By taking these steps, businesses can step confidently from the conference room to the town square, driving positive change both for their own companies and even more broadly.

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