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18 January 2017

How business needs to respond to the crisis of trust

Written by: Grant Clelland, Senior Director at Edelman

Corporate Reputation, Trust

If this year’s Edelman Trust Barometer were a painting, it would be Edvard Munch’s The Scream.

The image of the anonymous figure, head in hands, with an agonized expression raging against the world, perfectly sums up the general sentiment of this year’s survey. People are angry – they don’t like the direction their lives are taking, and they don’t trust governments, business or media to help them make sense of, let alone solve, the issues they face.

Put simply, the UK is in an unprecedented grip of a crisis of trust in its core institutions. The confidence of Britons in their leaders “to do the right thing” has collapsed – and from an already low level.

Looking at trust in business specifically, the findings make uncomfortable reading. The barometer suggests trust has been damaged by people’s perceptions that senior executives are paid much more than ordinary workers, or that the companies they manage don’t pay their fair share of taxes. Worries about immigration, automation and globalisation all contribute to these negative attitudes and are stoking protectionist sentiment amongst the public. Fears that business is only interested in talking to shareholders, and not to employees about their jobs, just make things worse.

Such gloomy results might prompt business to simply batten down the hatches, try to stay out of the storm and wait for fairer conditions to return. Yet with levels of trust down across the board, they can’t expect politicians or others to bail them out. Business as a whole may not be trusted, but governments, media and NGOs are trusted even less. If there is going to be a return of trust (and we know from previous barometers that there is a strong linkage between businesses that are trusted, and those that perform well financially), companies are going to have to lead the way.

There are five steps a business needs to take if they are to help start to turn things around:

  • For years, Edelman has been advising companies to encourage ‘ordinary’ workers to communicate. Our barometer has shown for years that trust in ‘people like me’ is far higher than for a CEO. This year’s findings show that it is more important than ever to find people who use the same language as – and have similar shared experiences to – their customers
  • Companies should talk about how there are helping create a fairer society – whether that is creating higher paid jobs in areas that need them, curbing executive pay or paying the right levels of tax. Words aren’t enough – they have to be backed up by actions too
  • They should demonstrate they understand that wealth is not being shared uniformly across the UK: that the experience of people in the south east of England, for example, is very different to those in parts of the Midlands or North. They should show how they are creating wealth across the country, helping reduce the disparity that was one of the most significant drivers of the Brexit vote
  • People are pessimistic – but they don’t want to be continuously reminded how bad things are. So, where they can, they should be positive about the prospects for job creation, and try to help give their consumers a reason to be optimistic about their future. They need to help workers, who may fear for their future, to adapt to change, and to understand that the future need not be as bad as they fear. And they need to help governments solve the problems created by automation and the uncertainties of the ‘Gig’ economy
  • Finally, they should show they are listening to the wishes of their customers, their employees or other stakeholders, and are acting on them. They should show they are not just concerned about profits, but about issues that matter in the ‘real’ world – fears of job insecurity and so on

With such little trust in business, the immediate outlook looks as ominous as the blood-red sky in Munch’s painting. Yet to hope the world will simply get better of its own accord is to risk making a huge error. With the global economic environment still uncertain, business need to do all they can to give their customers reason to believe in them. They have little option but to go on the front foot.

To read the full results of the 2017 Edelman Trust Barometer, please click here.

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