Across the world there has been a profound decline in trust. What does this mean for business?
How is trust defined? It’s the feeling of security that you get based on the belief that someone or something is knowledgeable, dependable, good, truthful and effective.
Why is this important? Trust is one of the most important factors in creating a strong, successful relationship. It forms the basis for all social interactions and is fundamental to life. In healthy relationships, both sides trust each other to not deliberately ‘hurt’ each other. Love is built on trust. It’s the glue that holds relationships together. Without trust, life is a constant battle against paranoia, suspicion and fear. But trust needs to be earned and fed and watered. It’s easily squandered and can be lost in seconds. never to return.
For 17 years, the Edelman Trust Barometer has measured the level of trust in four institutions – business, media, government and NGOs, amongst more than 33,000 consumers across 28 countries.
The 2017 results aren’t pretty. They reflect a sharp decline in trust. For the first time, trust levels fell for all four institutions. Two are actively distrusted, while people are sitting on the fence for the other two. Overall, they have a combined average score of only 47% placing them robustly in the distrust camp.
Respondents in only five countries felt that the four institutions combined were trustworthy: India, Indonesia, China, Singapore and the UAE. A whopping 19 of the 28 countries have major trust issues!
Looking at each of the four institutions, it probably won’t come as a great surprise that the government is least trusted, scoring only 41% globally with a staggering 75% of countries (21 of the 28) distrusting their own government.
The media fares marginally better, scoring 43% but is distrusted in 82% of countries (23 of the 28) with 17 of them at an all-time low. It is trusted in three: Indonesia, India and China! The media is increasingly seen as biased and prejudiced, carving out its own agenda, while the social media echo chambers we create for ourselves are seen as more trustworthy, with 59% of respondents believing a search engine over a human editor! The most credible spokesperson of all is a peer, a ‘person like yourself’ who is perceived as being on par with both technical and academic experts.
Disappointingly, the credibility of NGO’s has declined to only 53% and they are actively distrusted in eight countries: Poland, UK, Netherlands, Ireland, Germany, Japan, Sweden and Russia. 11 countries trust business before NGO’s.
Globally, business is trusted by only 52% of respondents and is actively distrusted in 13 countries. But eight countries still find businesses trustworthy despite CEOs not being found to be a credible source of information in 23 countries, and all 28 countries seeing a decline on this measure putting CEO integrity at an all-time low.
With a widespread loss of trust, the majority of respondents (53%) no longer believe that the overall system is working for them, a third (32%) are sitting on the fence and only a miserly 15% believe the present system is working in their favour. This is across the board, independent of income and education and frighteningly even higher in a number of western style democracies.
Why is this the case? Corruption and globalisation are the top two concerns for two-thirds of respondents, with nearly a third actively fearful.
In business as in private life, all successful relationships are built on trust. We delegate to each of the four institutions, elements of our welfare or happiness – government (security and public policy), media (information and knowledge), NGO’s (social causes and issues) and business (economics). We put implicit trust in each of them to act with integrity and with our best interests at heart. We need to trust them.
But, what happens if there is a loss of trust? If our trust is poked, prodded and chipped away? Then fear raises its ugly head. Fear that we are no longer protected by capable and reliable organisations. A foundational stone of society itself is kicked out from beneath us and our society starts to implode. The signs are there. The rise of populist movements in a number of countries is fuelled by this very fear, by the rising belief that the system is not fair, that hard work will not be rewarded, that our children do not have a better future and that our current leaders are incapable of solving these problems!
But, it’s not all doom and gloom. Trust is a forward-looking metric. It predicts whether people will believe and support you and what you do in the future. The silver lining here is that of the four institutions, business is viewed as the only one that can make a tangible difference.
For those who are uncertain, business is the most trusted; 75% agree that ‘A company can take specific actions that both increase profits and improve the economic and social conditions in the community where it operates’.
Trust is a valuable asset. If you have it, do everything you possibly can to keep it and ensure that the five most important trust building activities are a strategic priority. If you don’t, then really you know what you must do. Consumers are actively seeking brands and companies that share their values. Be that brand.
The caveat is that there is growing support for business reforms (82% agree that pharma needs more regulation and 70% agree that food that negatively impacts health should be taxed) and anti-business policies (69% agree that ‘we need to prioritise the interests of our country over those of the rest of world’ and 72% want the government to protect local jobs and industries ahead of economic growth). People have genuine fears about the pace of change (53% too fast) and globalisation (50% in the wrong direction) and what that means to their lives and to their jobs on a day by day basis (60% worry about losing job due to lack of skills, 58% to foreign cheaper workers and 54% due to automation).
“Business is the last retaining wall for trust,” says Kathryn Beiser, global chair of Edelman’s Corporate practice. “Its leaders must step up on the issues that matter for society. It has done a masterful job of illustrating the benefits of innovation but has done little to discuss the impact those advances will have on people’s jobs. Business must also focus on paying employees fairly, while providing better benefits and job training.”