In the 2021 Edelman Trust Barometer, the majority of respondents say they believe consumers and employees have the power to force business to change (68% and 62% respectively).
We recommend you keep those numbers in mind
as you read this Insight.
The survey also found (perhaps somewhat surprisingly) that business has become the most trusted "institution" around the world (61% of respondents globally, 63% in Australia).
That's ahead of government and even not for profits in some countries (though not in Australia where trust in those organisations also increased).
Business is in an interesting position.
On one hand....the business sector could collectively say "we've cracked the trust code". And if you were to take that view, you'd probably also say that nothing much more needs to be done to win over consumers.
Not so fast.....
While a number in the 60s is a majority, it's not a landslide.
On the other hand, we believe there's two fundamental questions that need answers:
How do we justify this apparent consumer faith?
How do we not just maintain the momentum but increase it?
To the justification point, it could simply be that business has been the beneficiary of bad behaviour by governments and politicians. Simple recent observation suggests that's not a bad argument.
Our hypothesis, supported by some of the other findings in the Edelman report, is that political leaders infrequently appear to have the best interests of the community truly at the forefront of their thinking. At least that's the perception, and as we know...perception becomes reality for many, if not most, humans.
To fill the void, the community turns to business, where at least there are some indications of "business doing good while doing well".
That's the hypothesis...
What's driving this trust in business?
It's an interesting situation, because you don't have to try too hard to come up with examples of less than squeaky clean behaviour by some of the biggest businesses on the planet (there's no need to name them here I'm sure). So while it's clear that not all businesses have contributed to this increasing trust level, it also seems that consumers - at least those responding to the Edelman survey - aren't necessarily prepared to tar all of the business sector with the same brush.
Assuming that's true, what are the characteristics of business that have most contributed to rising trust levels among consumers (and where does your business sit in comparison)?
First, a business will be deemed trustworthy when they're seen to be doing the right thing by their customers. They're the businesses who know their customers intimately. Further, they deliberately serve a high proportion of "ideal" customers (because they know with a high degree of accuracy their ideal customer profile) and intentionally avoid tweaking their product or service offer in order to serve all comers.
These businesses also deliver products and services at prices that provide value and utility to customers and a reasonable profit for themselves (and, by the way, to those in their supply chain).
In short, as we're fond of saying, trusted businesses deliver the right products and services, at the right price to the right customers. And businesses that can do this have no need nor temptation to sell inappropriate products to people whom they ought not.
Second, a business will rate as trustworthy when it treats its employees well. That means:
it recruits well - it can do this because they build a reputation as an "employer of choice" which creates competition for any available roles in the business. This also means the business can be selective and achieve a high degree of good "fit" when recruiting;
it onboards new employees well - it has structured processes and programs involving a range of others in the business to provide guidance and mentorship to new team members;
it manages performance well - its performance management system is well understood and easy to use by all involved. All employees are clear on responsibilities and accountabilities and communication around performance is open and direct. They’re also clear on how their day-to-day work contributes to the longer term aspirations of the business and its underlying purpose;
it rewards and recognises people appropriately and fairly - it understands the needs and wants of all employees and, while it's generally inevitable that some compromises will exist, remuneration and benefit structures clearly reflect employee preferences.
The outcome is highly engaged employees who are likely to contribute discretionary effort. They’ll go way beyond what's called for in their job description to deliver high quality results time and time again.
Third, customers and employees of trusted businesses will be supported by high quality, logical and customer focused processes and operations. The customer experience will come first in designing processes and systems and will be easy to use for employees. These businesses don't, for example, buy the latest technological wizardry only to find that when installed, it frustrates the life out of both customers and employees.
In essence, good internal operations means fewer customer complaints and therefore, higher trust levels.
What's the glue that holds all this together?
At the core of all this - the customer, employee and operations puzzle - is the underlying purpose of the business. The reason it exists beyond the profit motive....the reason customers are better off as a result of dealing with the business.
It's purpose that allows a business to:
identify, profile and target its ideal customer;
fully engage employees who understand how their contribution "fits"; and,
build an operational framework that support team members to deliver a brilliant customer experience.
And these are the factors creating a high level of trust among their customers.
There’s a flow-on effect because this trust will be reflected into the broader community among those who are neither customers nor employees. That's because the very manner in which this type of purpose-driven business conducts itself delivers a strong reputation that permeates beyond those it touches directly.
How does business build on these results?
It's our very strong belief that more businesses, of all sizes,
must become better acquainted with, clearly articulate and demonstrate their underlying purpose.
That means taking the time to revisit the origins of the business and understand the customer problems the founders set out to resolve. It also means involving employees in the process because without them, you're unlikely to achieve the result you'd hope for. It's great for business owners and their immediate leadership group to be on board with purpose but the reality is it's your teams who deal with customers on a daily basis and who are critical in your efforts to build trust through purpose.
Why is it important to maintain the momentum?
Because it would be easy for business to become complacent and to think, collectively, the job's been done.
But it hasn't.
That's because it would also be easy for the 63% of respondents to the Edelman survey who say they trust business to change their tune.
And that would be a problem...remember we mentioned at the beginning of this insight that hidden in the research were these two gems:
68% of respondents said consumers have the power to force business to change; and
62% of respondents said employees have that power.
So it seems it's your customers and employees
hold most, if not all, of the aces.
If your business isn't looking seriously at the long-term benefits of being truly purpose-driven these days it's not unreasonable to say you're probably in serious peril.
If this Insight has given you food for thought, GrowthCatalyst can work with you to help create sustainable growth built on stakeholder trust. We invite you to contact us to arrange a meeting, face-to-face or virtual.
Alternatively, you can book a time for an initial discussion here.
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