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Since 2000, Edelman, a global PR agency, has been conducting a international research to assess people’s trust in our core institutions. This survey is called the Edelman Trust Barometer and earlier this year Edelman published the most recent results based on responses from more than 36,000 respondents in 28 countries. The results paint a disturbing but unsurprising picture: a high level of mistrust that undermines our ability to communicate, collaborate and solve problems.
But within this bleak picture, the Edelman Trust Barometer finds hope in an unexpected place: business. Of the institutions surveyed, business is the most trusted, with 61% of respondents globally reporting that they trust business, compared to 59% for NGOs, 52% for the government and 50% for the media. Furthermore, business is seen as the most capable of solving social problems and achieving results, scoring a surprising 53 points higher than the primary institution established to solve social problems: government.
Companies are mainly trusted by their own employees. Seventy-seven percent of respondents worldwide and 74% 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 colleagues, a level of trust second only to scientists.
Related: Study Reveals US Crisis of Confidence With Government, Business and Media
The burden of trust
Given these results, business leaders need to ask ourselves a question: If our organizations have inventories of an increasingly scarce resource – trust – what responsibility do we have to put that to good use to help society solve our problems?
Our employees and customers have already made their choice. 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. Furthermore, 60% want their CEO to speak out on controversial issues they care about, and 81% want CEOs to be personally visible on public policy issues. As a more specific example, according to the Deloitte Global 2022 Gen Z and Millennial Survey nearly half of Gen Zs (48%) and Millennials (43%) say they pressured their employer to take action against climate change, for example.
This is probably not surprising, but unwelcome news for CEOs. Historically, many business leaders have avoided wading into the murky waters of social affairs. Unless the matter had clear implications for profit, getting involved was seen as distracting at best and dangerous at worst.
A world where every company deals with every issue society deems important would be noisy, disorienting and unproductive. But the trust people have placed in companies, 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, the divisions in society and the constraints of time, attention and resources.
Related: How Entrepreneurs Navigate the Confidence Crisis
When should business leaders act on these issues?
The key for companies is to speak and act when they have a credible reason to do so. Without a credible reason, corporate action becomes performative, confusing or even counterproductive and often damages trust. But with a credible reason to act, corporate action is much more likely to achieve the three ‘i’s’: intentional, informed, and impactful. Companies can determine whether they have a credible reason to speak or act on an issue by examining the issue along three dimensions:
Impact on mission: A company’s purpose of existence is determined by its mission and how it will achieve that mission is determined 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. At Mineral, for example, our mission is to help companies and their people thrive at work. So we first look at whether a problem hinders, improves or does not affect employers’ ability to create a thriving team. Issues like anti-harassment, pay equality or mental health are highly relevant to what we consider ingredients for a thriving team, while an issue like animal cruelty is less relevant.
Employee impact: The second dimension to consider is the extent to which an external event or issue affects a company’s employees. This requires us to look beyond employees’ work experience to their overall life experience, including their families and communities. At Mineral, we have identified events and issues such as natural disasters, civil rights legislation, climate change and racially motivated hate crime as events and issues that significantly affect the well-being of our employees and their families.
Impact on the customer: The third dimension to examine is the extent to which a problem or event affects customers. Similar to the employee view, this view requires looking at the health and well-being of customers beyond a company’s commercial relationship with them. At Mineral, for example, our clients are US-based small and medium-sized companies. When the Covid pandemic caused businesses to shut down nationwide in the spring of 2020, we joined campaigns to financially support these businesses until the economy could reopen.
Related: CEO Activism – When Leaders Need to Speak Out
The greater the impact on these dimensions, the more credible a company’s rationale for acting. 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 major impact on a company’s mission and its employees or customers, a company has a very credible reason to act. And if it does, its action will likely reflect the three “i’s” above: intentional, informed, and impactful. Corporate actions may include using a website, social media, or thought leadership to promote a position or take direct action through volunteer or financial contributions.
Now to the orange zones. If an issue has a major impact on a company’s mission, but little impact on its customers and employees, the company must conduct further analysis to determine whether action or a public position is appropriate. The same would be true if an issue has a high impact on customers and employees, but a low impact on the mission. Further analysis may include evaluating whether the company has a unique perspective 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 little impact on the mission and employees, a company can use external customer communication to respond to the issue. For example, external communications may include sending an email to customers acknowledging the issue and the company’s position or response. Likewise, 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 communications with employees to respond to the issue.
The latter is the gray zone. If an issue or event has little impact on the mission, employees and customers, the company probably has no credible reason to act. This does not mean that the issue or event is not important to society. It simply means that the company’s involvement may not be productive, or at least productive enough, to justify taking time, attention, and resources away from other efforts. The company’s executives and employees could certainly still deal with this issue as individuals in a personal capacity.
As indicated in the Edelman Trust Barometer, companies now have a powerful and unique combination of benefits – trust and competence – but they must use them wisely. Business leaders must embrace the role their employees and customers have given them, focus on issues for which there is a credible reason to act, and find credibility through the impact on the company’s mission, employees and customers. By taking these steps, businesses can confidently move from the meeting room to the city square, bringing about positive change both for their own businesses and on an even broader level.