Understanding the Burden of Trust for Business Leaders

opinion expressed by entrepreneur Contributors are yours.

Every year since 2000, Edelman, a global public relations firm, has held a international survey To assess people’s confidence in our core institutions. The survey is called the Edelman Trust Barometer, and earlier this year, Edelman released the most recent results based on responses from more than 36,000 respondents in 28 countries. The results paint a dismal but not surprising picture: high levels of mistrust that undermine our ability to communicate, collaborate, and solve the problems we face.

But within this hazy picture, the Edelman Trust barometer finds hope in an unexpected place: business. Among the institutions studied, 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 media. Furthermore, business is seen as most capable of solving social problems and achieving results, a shocking 53 points more than the primary institution created to solve social problems: the government.

Businesses are trusted exclusively by their own employees. Seventy percent of respondents globally and 74 percent in the US said they trust their employer. On a more personal level, 66% of respondents said they trust their CEO, and 74% said they trust their coworkers, a trust level second only to scientists.

RELATED: Study reveals US trust crisis with government, business and media

burden of trust

Given these results, business leaders need to ask themselves a question: If our organizations have reserves of an increasingly scarce resource – trust – how can we use that asset to help solve society’s problems? What responsibility to use?

Our employees and customers have already made up their mind. According to the Edelman Trust Barometer, 58% of people make buying decisions, 60% make employment decisions, and 64% make investment decisions based on their beliefs and values. In addition, 60% want their CEOs to speak on contentious issues they care about, and 81% want CEOs to appear in person on public policy issues. As a more specific example, according to Deloitte Global 2022 Gen Z and Millennial Survey Nearly half of Gen Z (48%) and Millennials (43%) say they have put some pressure on their employer to act on climate change, for example.

This is perhaps surprising but unwelcome news for the CEO. Historically, many business leaders have avoided getting into the dirty waters of social affairs. Unless the issue had clear implications for the bottom line, it was considered dangerous at best and downright dangerous to be involved.

A world in which every business is involved in every issue that society considers important would be noisy, disorienting and unproductive. But the trust that people place in businesses, and especially in their own employers, creates an opportunity, responsibility, and avenue for business leaders to act. The challenge is deciding when to do so, especially given the pace of change, divisions in society, as well as the limitations of time, attention and resources.

RELATED: How Entrepreneurs Can Navigate the Crisis of Trust

When should business leaders act on these issues?

The key to businesses is to speak up and act when they have a credible reason to do so. Without a credible reason, corporate action becomes demonstrative, confusing, or even counter-productive, and often erodes trust. But with a credible reason to take action, corporate action is much more likely to achieve the three “i”s: intentional, informed, and impactful. Businesses can examine the issue along three dimensions to determine whether they have a credible reason to speak or act on an issue:

  • Impact on Mission: A company’s purpose for existing is defined by its mission and how it will achieve 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, at Mineral, our mission is to help businesses and their people grow at work. Therefore, we first look at whether a problem hinders, enhances, or does not affect employers’ ability to build a thriving team. Issues such as anti-harassment, pay equity or mental health are highly relevant as material for a thriving team, while issues such as animal cruelty are less relevant.

  • Employee Effect: The second dimension to examine is the extent to which an external event or problem affects the employees of a business. This requires looking beyond the work experience of the employees to their overall life experience including their families and communities. At Mineral, we have identified incidents and issues such as natural disasters, civil rights legislation, climate change and racially motivated hate crimes that materially affect the well-being of our employees and their families.

  • Customer Impact: The third dimension to examine is the extent to which a problem or incident affects customers. Similar to the employee approach, this approach requires looking at the health and well-being of customers beyond the business’s business relationship with them. For example, at Mineral, our customers are US-based small and medium-sized businesses. When the COVID pandemic closed businesses across the country in the spring of 2020, we joined the campaign to financially support these businesses until the economy can be reopened.

RELATED: CEO Activism – When Leaders Should Speak Up

decision matrix

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

Let’s start with the red zone. If an issue or incident has a significant impact on the company’s mission and its employees or customers, the company has a highly credible reason to act. And if he does, his action is likely to reflect the three “i”s above: intentional, informed, and impactful. Corporate action may include using a website, social media or thought leadership to promote a position, or taking direct action through volunteering or financial contributions.

Now in Orange Zone. If an issue has a high impact on the company’s mission but low impact on its customers and employees, the company must do further analysis to determine whether the action or public position is appropriate. If an issue has a greater impact on customers and employees but less impact on the mission, the same applies. Further analysis may include evaluating whether the company has a unique approach to offering or whether it can take meaningful action to achieve the results.

Now in green and blue zones. If an issue or incident has a greater impact on customers but less impact on mission and employees, the company may use external customer communication to respond to the problem. For example, external communication may mean sending an email to customers acknowledging the issue and asking for the company’s stance or response to it. Similarly, if an issue or incident has a greater impact on employees but less 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 little impact on the mission, employees and customers, the company has no credible reason to take action. It does not mean that the issue or event is not important to the society. It simply means that the company’s involvement may not be productive, or at least not productive enough, to justify taking time, attention, and resources from other efforts. Company officers and employees can certainly still engage as individuals in their individual capacity on the issue.

As indicated in the Edelman Trust Barometer, businesses now have a powerful and unique combination of benefits — trust and potential — but they must use them wisely. Business leaders need to embrace the role of their employees and customers by focusing on issues where there is a credible reason to act and finding that credibility through the impact on the business’s mission, employees and customers. By taking these steps, businesses can confidently move from the conference room to the town square, making a positive difference to their own companies and even wider ones.