Tuesday 24 April 2018

Why Activate Trust?

Last week, Edelman released the Australian and global findings from the 2012 Edelman Trust Barometer. In Australia, we’ve seen a lot of shifts in trust over the past few years– from the rising influence of NGOs, to the decline in trust of government, the social purpose of business, to the credibility of employees as company spokespeople and the rise social media.

But, why do we survey trust? Why does trust matter and what is the true connection between trust and reputation?

At Edelman, it is our point of view that trust and reputation aren’t the same thing; however, they are intrinsically interrelated.  Think of it this way:

  • Reputation is an aggregate analysis of past behaviour and a company’s conduct over time.
  • Trust is the expectation of future behaviour based on past performance.

In other words, Reputation is what’s in the rear-view mirror, whereas Trust is what people expect a company will do in the future, based on their understanding of its past.

There is no doubt companies must be vigilant to earn, nurture and protect a positive reputation among stakeholders. However, there is danger in building reputation alone. A company may have a good reputation based on product/service, financial or operational excellence, but this doesn’t inherently inoculate from risk or fuel forward momentum.  When Reputation is not matched with Trust, growth barriers can arise.  This is when we see companies lose public support for acquisitions, struggle for forgiveness after missteps, or undergo acrimonious union actions.

Trust, however, is a license to operate and permission for the business to act, do, manufacture, offer services, etc. in the future.  Trust allows you to bring stakeholders along as active participants and advocates because of the depth and confidence inherent in the relationship.

Therefore, the management of trust is emerging as one of the most critical core competencies of the 21st century corporation.  Trust will help ease stakeholders through moments of uncertainty and change because of beliefs their longer term expectations will be met.  This gives business the breathing room it needs to act.

For example Trust will keep shareholders from dumping their stock when a company makes a long-term investment at the risk of short-term earnings. Trust will help employees get behind difficult challenges to make their employer more competitive. Trust is essential to create and maintain an advantageous regulatory environment. And, of course, trust will keep customers loyal, confident that, at least in large measure, the brand is meeting their expectations and values.

An authentic balance of reputation and trust, built upon both operational and societal performance, is the clear mandate for optimal business success. Companies must work to close the gap between stakeholder expectations and perceived performance. This will be done through committing to business decisions to meet or exceed expectations and through transparent and open communications about performance against these initiatives.


Our team at Edelman looks forward to discussing trust with you and sharing our new TrustED diagnostic tool which helps assess your current levels of trust, stakeholder expectations and company performance.


Kate Ferguson