Understanding the burden of trust for business leaders

Since 2000, Edelman, an international public relations firm, has conducted an international survey to assess people’s trust in our basic institutions. This 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 confusing but not surprising picture: high levels of mistrust undermine our ability to communicate, collaborate, and solve the problems we face.

But amid this bleak picture, the Edelman Trust’s barometer finds hope in an unexpected place: business. Business is the most trusted of the institutions studied, with 61% of global respondents saying they trust business, 59% for NGOs, 52% for government and 50% for the media. In addition, business is seen as having the most potential to solve society’s problems and achieve results, which is surprisingly 53 points higher than the primary institution established to solve society’s problems – the government.

Businesses especially rely on their own employees. 77% of respondents globally, and 74% in the US, said they trust their employer. On a personal level, 66% of respondents said they trusted their CEO, and 74% said they trusted their colleagues, second only to scientists.

RELATED: Study Reveals Crisis in America’s Trust with Government, Business and Media

Burden of trust

As we look at these results, business leaders must ask ourselves one question: What responsibility do we have to use that resource that our organizations increasingly have—trust—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 CEOs to speak out on controversial issues they care about, and 81% want CEOs to be seen personally on public policy issues. For example, according to the Deloitte Global 2022 Gen Z and Millennial Study, half of Gen Zs (48%) and Millennials (43%) say they have put some pressure on their employer to take action on climate change. .

This is perhaps unsurprising, but unwelcome news for CEOs. Historically, many business leaders have avoided wading into the murky waters of community affairs. Unless the issue had clear implications for the bottom line, it was considered a distraction at best and a risk to step into at worst.

A world where every business is involved in every issue that society believes is important will be noisy, confusing and counterproductive. But the trust people place in business, especially their own employers, creates opportunities, responsibilities and opportunities for business leaders. The challenge is deciding when to do it, especially given the speed of change, the divisions in society, and the limitations of time, attention, and resources.

Related: How Entrepreneurs Can Navigate a Crisis of Confidence

When should business leaders act on these issues?

The key to businesses is to speak up and act when they have a good reason to do so. Without a credible rationale, corporate action can be ineffective, confusing, or even counterproductive, and often undermines trust. But corporate action is more likely to achieve the three “i’s” of good cause action: intentional, informed, and impactful. Businesses can determine whether they have a valid reason to speak out or act on an issue by examining it from three angles:

• Impact on mission: A company’s existential purpose is defined by its mission, and how it achieves that mission is defined by its values. Therefore, the first step is to assess the extent to which an external event or issue affects an organization’s ability to fulfill its mission and values. For example, in mining, our mission is to help businesses and their people grow at work. Therefore, we first consider whether an issue hinders, enhances, or impairs employers’ ability to create a thriving workforce. Issues such as anti-harassment, pay equity or mental health are highly relevant to what we call the substance of the affluent group, but issues such as animal cruelty are less relevant.

• Employee Impact; The second dimension to examine is how much an external event or issue affects business employees. This requires looking beyond the work experience of workers to their entire life experience, including their families and communities. In mining, we identify incidents and issues that affect the safety of our employees and their families, such as natural disasters, civil rights legislation, climate change and racially motivated hate crimes.

• Customer Impact: A third dimension to examine is the extent to which an issue or event affects customers. Similar to the employee perspective, this perspective requires looking beyond the business relationship to the health and well-being of customers. For example, in mining, our customers are US-based small and medium-sized businesses. In the spring of 2020, when the Covid pandemic forced the closure of businesses nationwide, we joined campaigns to fund these businesses until the economy reopened.

Related: CEO Activism – When Leaders Should Speak Up

Decision matrix

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

Let’s start with the red zones. If an issue or event has a significant impact on the company’s mission and its employees or customers, a company has a very good reason to take action. If he does so, his actions will reflect the three “I’s” above: intentional, informed, and affective. Corporate action can include using a website, social media, or thought leadership to promote a cause or take direct action through volunteering or financial contributions.

Now to the orange zones. If an issue has a high impact on the company’s mission but a low impact on its customers and employees, the company should conduct further analysis to determine whether action or public stance is appropriate. The same is true if the 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 vision 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 a low impact on the mission and employees, a company can use external customer relations to respond to the issue. For example, external communication may mean sending an email acknowledging the issue and the company’s position or response to customers. Similarly, if an issue 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 issue.

The last is the gray zone. If an issue or incident has a low impact on the mission, employees, and customers, the company may not have a credible basis for action. This does not mean that the issue or event is not important to society. It may simply be that the company’s involvement is not productive, or at least not effective enough, to justify taking time, attention, and resources away from other efforts. Company executives and employees may still participate in the matter in their individual capacity as individuals.

As noted in the Edelman Trust Barometer, businesses now have a powerful and unique combination of benefits—trust and competence—but they must use them wisely. Business leaders must embrace the role assigned by their employees and customers, focusing on issues for which they have credibility, and earning that credibility through its impact on the business mission, employees, and customers. By taking these steps, businesses can step out of the conference room into the town square with confidence, leading to positive change both for their organization and on a larger scale.