Which organizations do you trust? Government? The media? Business? The Covid-19 pandemic has had a huge impact on how consumers feel about institutions, and it may surprise you that business is actually the most trusted institution in the United States – for the fourth consecutive year, according to Edelman Trust Barometer. A PwC study yielded similar results, finding that 63% of consumers say they trust American businesses.
Our survey found that this corporate endorsement can be at least partially attributed to the commitments and actions that so many in the business community have taken during the pandemic. Advocating for social justice, protecting communities and the economy by keeping people safe at work, continuing to supply household items, accelerating vaccine production, providing loans to small businesses, rising wages and charitable commitments have all had an impact on trust and reputation. So, yes, the business community has stepped up significantly, but we all recognize that there is still work to be done.
The opportunity now for business leaders is to protect the progress that has been made and manage trust as carefully as we do our balance sheets. Leaders can achieve this by assessing what deserves trust, setting corresponding priorities, monitoring progress, and taking quick action to admit and fix problems when they arise.
I’ve seen major healthcare companies invest real money to target the social, environmental and economic factors that affect health, thereby building confidence in striving to improve health outcomes for their customers and their communities. I’ve seen financial institutions commit to their customers that their money will never go into investments that could harm the environment, building confidence that ethical business practices guide them. I’ve seen companies raise wages for low earners. I’ve also seen executive pay plummet if they fail to meet diversity goals for their workforce, which builds confidence that inclusion is a requirement, not a PR campaign. .
Unfortunately, breaches of trust are also common. We all give our personal data to certain companies, hoping they will protect it and use it responsibly, but data breaches and questionable uses of consumer data happen every day. Many of us direct our savings towards environmental, social and governance (ESG) investments, confident that our money will not be used to harm the planet. But some companies may be tempted to overstate ESG claims, causing governments and regulators to scrutinize assets with green or socially responsible labels.
These opportunities illustrate why it’s so important for business leaders to understand what drives trust. In our recent investigationwe found that consumers and businesses agree on four actions that help build trust:
- Data protection and cybersecurity
- Treat employees well
- Ethical business practices
- Admit mistakes quickly and honestly
There are many examples of companies that have made great strides in these areas over the years, and many continue to improve.
It is equally important to identify points of disagreement between business leaders and consumers. Our survey found that how companies manage their value chains, deploy responsible artificial intelligence and report on ESG actions are all trust factors highly valued by business leaders, but of lesser importance to consumers.
Note the disconnection on the ESG. Consumers are indeed concerned about the environmental and societal impact of companies and their ethical governance. However, many companies have yet to take the time to make the connection between their ESG-related actions and their impact on the average consumer.
This gap in what consumers say increases trust and what companies actually do is also evident in the area of accountability. Consumers want executive oversight. They want companies to quickly take responsibility for their failures and show action to fix them. However, less than half of the companies responding to our survey have formal accountability initiatives in place.
Why this shift in priorities? Maybe it’s because right now there isn’t a single role in the C-suite that really possesses the trust. Our survey found that in most companies, all C-suite roles were at least partially accountable, making accountability and alignment difficult.
So what are the key takeaways for the business world?
1. It’s time to galvanize around trust and transparency.
To do this, tomorrow’s business leaders must set out a clear strategy for building a culture of trust and transparency across the business. For example, a year ago, at PwC, we reached an important milestone by publishing the demographics of our workforce for the first time. We did this because diversity and inclusion is core to our purpose at PwC, and we wanted to apply more rigor, accountability and transparency in how we continue to lead the representation and culture of belonging to our company.
We also did this to foster trust. We want our stakeholders, including employees, as well as the wider community, to know that we take DEI seriously and hold ourselves accountable for achieving our goals. While we are energized by the progress we have made, we recognize that we still have work to do – and we remain committed to publicly sharing our progress through our Goal report.
2. To build trust, leaders must communicate the “why” behind big decisions.
When done effectively, take a multi-stakeholder approach building trust can create a positive feedback loop that can be a real force multiplier.
For example, at PwC, we recently went through a landmark transformation that included a brand overhaul and a bold new strategy we call the New Equation. Any change of this magnitude was bound to cause some unease among our extensive network of stakeholders, but this time around the way we responded to their concerns and potential questions was different. We have communicated not just the “what” but the “why” to our broad group of stakeholders – not just customers and our employees, but also regulators, analysts, alumni, the business community, NGOs and NPOs, future talents, etc.
We also made sure to tailor our communications to each stakeholder audience to foster better understanding. It was very important to motivate each stakeholder audience to join us on the journey.
3. Leaders must act with integrity, courage and vulnerability.
When mistakes do happen, as they inevitably will, leaders need to make a lasting and transparent commitment to getting it right.
For nearly 90 years, our firm has had the great privilege of tallying the votes for the Academy Awards and identifying the winners. During the 2017 Oscars, one of our PwC partners mistakenly gave the wrong envelope to a presenter. On behalf of our firm, I immediately took responsibility. I have personally contacted dozens of affected people, including producers, presenters, managers and filmmakers. In the months that followed, we took swift action to understand how the error was made, and worked closely with the Academy to design new protocols and safeguards to prevent the error from occurring. reproduces itself. We did it because it was the right thing to do and we wanted to regain the trust of our customer, our collective stakeholders.
I think our recent study is good news for business and society. Our business community has come a long way to build trust with consumers and align increased social needs with the responsibility to increase revenue. Although this is a hill we are still climbing, we are seizing the opportunity to bring about positive and lasting change for our stakeholders and society as a whole – and it is a step in the right direction.