A Deficit of Trust

February 3, 2010

During the State of the Union address, President Obama took aim at the problem of trust. Interestingly, trust-building is one of the biggest priorities for corporate citizens right now, too.

If you track any of the major polling operations that evaluate trust metrics — Gallup, Harris, Edelman, Rasmussen, etc. — you will find a remarkable consistency in how Americans evaluate different institutions and functions, although the specific weights and values may vary.

Generally speaking, Congress rates at the low end of the trust totem pole, followed by lawyers, the mainstream media, and big business. On the other end, Americans tend to trust the military, faith-based leaders, nonprofit leaders, small business owners, teachers, doctors, firemen, and other emergency responders.

Another interesting element is that while people don’t like Congress, the media, or big business in general, they really like their specific member of Congress, their favorite television channels, and their favorite stores and brands. What we also find is that authority figures seem to have lost their credibility.

In a Rasmussen poll taken right after the State of the Union address, just 27% of respondents believed the president’s statement that the government had put 2 million people back to work. Likewise, according to Edelman’s annual trust survey, the best spokesperson for a company often is not the CEO, but someone who is perceived as a peer or somebody “like me.”

We have become so accustomed to spin that we almost automatically discount what public spokespeople say. In a way we have lost something very precious, which also underscores the fact that we need to develop a new management science. We need to learn how to manage in order to build up trust.

The people we tend to trust highly have jobs that are seen to clearly benefit others. We recognize that our armed forces personnel put their lives on the line for us. By definition, teachers and doctors are committed to improving people’s lives. Firemen rush in to harm’s way. Their social contributions are obvious and easily understood.

What can we learn about what people don’t like?

Big organizations, particularly Congress, have to overcome a perception of collective irresponsibility. “Bigness” is equated with remoteness, a lack of sensitivity to local, immediate needs, issues, and priorities. People take personally the saying, “don’t take it personally, it’s just business.” They think that bigness leads to a de-sensitizing of people to the decisions that they make.

Big business also suffers from guilt by association. At the height of the Enron, Worldcom, and Global Crossing scandals of 2001-2002, magazines like BusinessWeek started to keep scorecards. Tabulating everything together, they came up with 17 “scandals” (and some of them were pretty minor), less than one half of one percent of the publicly traded companies in North America. And yet these few incidents were enough to trigger public outrage and the passage of Sarbanes-Oxley, which penalized all of the law-abiding companies on the stock exchanges and required any company wishing to join them in the future to take on higher regulatory burdens.

These perceptions can have real consequences, but people may not be exactly clear what they are punishing or what they are trying to incentivize.

So what does this mean for corporate citizens? I think the first challenge is to raise awareness about what business is all about and to convey the fundamental point that most businesses – big and small — are made up of people who care about what they do.

Everyone focuses on the self-interest evidenced by profit, but they lose sight of the altruism required to generate the sale. If the customers don’t want to buy, then the business doesn’t stay in business. People working for Microsoft or Home Depot or L.L.Bean or Merck, for example, don’t just think of themselves as selling products; they think of themselves as changing people’s lives for the better. Go to a business planning retreat and almost invariably the number one question is: “how can we make our customers’ lives better?”

Somehow this gets lost in translation. Companies need to do a better job of raising awareness about how much they care.

Secondly, companies have to figure out ways to get local and get personable and be more “human.” A company like Wal-Mart has a real challenge because its bigness is part of its competitive advantage. Wal-Mart has tried to overcome the challenge by hiring greeters. If I were a Wal-Mart manager, I would go further. I would make it a point for my people staffing the floor departments to learn their regular customers’ names, something that higher-end retailers, like Brooks Brothers and Nordstrom, have learned well.

Other companies have worked hard to put their people in the field through volunteer projects or by sitting on local boards or by joining Rotary or other civic clubs. Meanwhile, some companies combine their national network with a local storefront approach – think of your insurance agent or your Starbucks café. They do a good job of being part of the fabric of their communities.

Third, companies have to learn how to be transparent. In the immortal words of author Don Tapscott, “If you are going to be naked, you better be buff.” Another way of saying this is that companies can’t be fake. Or rather, they can be fake for a little while, but then the consequences of discovery of the truth grow worse the longer the disparity between appearance and reality goes on. Marketers talk about the millennial generation’s “yearning for authenticity,” but the truth is even simpler: If you want to be trusted, you have to be trustworthy.

Trust-building is a core part of CSR management, and yet notice we haven’t said one word about philanthropy. Trust-building is about behavior and social interactions. It’s about how you communicate and what you do. It’s also a long-term process — not one that can be solved overnight.

In this current political environment, where different industries are being criticized for different reasons, CSR managers have a critical role to play. The role is not just the corporate conscience, but also the preserver of the company’s business, reputation, and future.

Our ability to overcome the deficit of trust may be limited in the short-term, but it can start now.