Trust, More than Ever, the Biggest Indicator of Success
June 7, 2018
What do data and security breaches, companies being called before parliamentary committees to defend sales practices, the introduction of the EU’s General Data Protection Regulation and a recent gathering of 3,200 communications researchers in Prague, Czech Republic from 74 countries have in common?
Besides all happening these past few weeks, the significance of these unrelated events can be tied back to a single attribute… trust.
Trust is the basic quality at the foundation of every relationship. We understand it naturally and our inner alarms go off when it’s damaged or absent.
United Airlines, BP and Facebook are recent examples that have played out in the media of high-profile companies experiencing declines in trust. In some cases, this has led to U.S. Congressional Committees calling on companies to defend their business practices. Corporate Canada is not immune to this.
But what these examples show is what can happen when there’s low trust.
I’ve spent the past seven years conducting research, analyzing data, writing articles and speaking to business leaders around the world about how companies build, manage and protect trust.
Based on my research, acting in the best interests of customers, stakeholders and the public consistently ranks as the top criterion of a trustworthy organization. Last week, I was invited to present my research and findings at the 68th International Communication Association (ICA) Conference in Prague, Czech Republic. One important observation from this event struck me: the international community is starting to take a long, hard look at the importance of trust in today’s complex world.
If “fake news”, a shifting world order and a global focus on transparency are not compelling enough reasons for trust to be top of mind for every company, some of the key conclusions from our research(and others) make it fundamentally clear:
- Empirical evidence shows the single most important asset in ensuring long-term success is a strong foundation of customer trust driven by ethical leadership.
- The 2018 Edelman Trust Barometer validates this, showing that 70 percent of people worldwide believe the number one job for CEOs is to build trust, ahead of delivering high-quality products and services. It also reported only 50 per cent of Canadians trust businessto do the right thing.
- There is a statistically significant relationship between levels of trust and challenges businesses regularly face, including declines in sales, revenues, customer retention and repeat business, and increases in regulatory scrutiny, employee turnover, customer complaints and longer sales cycles.
- Not only can companies manage and measure trust, trust is a key performance metric and an indicator of a company’s future performance.
Results from an Ipsos survey for Readers Digest Canada released in January show 92 per cent of Canadians tend to buy from companies they trust more, even when quality and price of a product or service are similar.
The bottom line for companies is that trust is both measurable and manageable. It cannot be manufactured or engineered. It takes hard work and protecting trust equity requires a purposeful and long-term commitment.
Yet due to the fact that customer trust in a company is not accounted for on the balance sheet, many leaders find it difficult to quantify its value to the success of their organizations… until there’s a crisis.
That’s when many leaders take what is at best a reactive stance when it comes to trust, using it as a talking point to tellstakeholders there’s been a “breach of trust” or that “we need to focus on rebuilding trust.”
Trust is no longer a concept that businesses and their leaders should consider as difficult to quantify. It can be managed and it can be measured. This week’s events as well as the research and evidence make it clear: not only is trust essential to business success, but trust will continue to ascend to its rightful place as the single greatest predictor of a company’s future success.