Consumers worldwide are rapidly losing trust in many of the institutions, systems, and practices they once took for granted. However, there is one notable exception. While trust is eroding overall, trust in businesses is on the rise. For leaders, this opens up new opportunities and challenges.
TRUST IS DECLINING, BUT NOT IN BUSINESS
According to the 2022 Edelman Trust Barometer, an annual survey of more than 36,000 individuals in 28 countries, trust in the United States as a nation has fallen 10 points since 2017. And the U.S. isn’t alone: Trust is eroding around the globe, especially in developed countries and established democracies.
A closer look reveals that the decline in trust seems to be driven by some factors more than others. For example, while trust in elected officials, government institutions, and the media continues to erode, trust in coworkers, business leaders, and businesses seems to be on the rise.
During the pandemic, people reported becoming closer to and most trusting of their coworkers (with an overall increase of 12% globally). Even more surprising is that while government was the most trusted institution at the start of the pandemic, by late 2021, businesses were the most trusted institution globally. On an individual level, people also report trusting their own CEO more than journalists, government officials, or other people in their nation or community.
The growing trust in businesses, in particular, seems to rest on the fact that businesses are considered far more capable of executing plans and strategies that yield results than any other type of institution. According to the 2022 Edelman Trust Barometer, globally, businesses are seen as 53 points more competent than government institutions.
Other recent studies have also found that trust in business is on the rise. A 2021 PWC survey found that 80% of employees report trusting their company the same or more now than before the pandemic, with even more respondents (84%) indicating that they trust their direct manager as much or more now. Such findings suggest that leaders and managers are already doing many things right, including taking action to care for and support the mental health and wellness of their team members.
Given these insights, individuals are also increasingly calling on businesses and business leaders to be more, rather than less, involved in societal issues that range from climate change to healthcare to systemic injustice. What does this mean for business leaders?
AN OPPORTUNITY FOR BUSINESS LEADERS TO DO MORE
With trust in business on the rise, there is a clear opportunity for leaders to expand the role they play in supporting the well-being of their employees and their broader community. Decisions made now could shape an organization for decades to come.
• Trust begets trust: We know that trust breeds trust. When you already have trust, it is easier to build deeper trust. As trust in businesses increases and trust in other types of institutions erodes, business leaders should be doing everything possible to make the most of this situation. Trusting relationships forged with employees, as well as clients and other stakeholders (e.g., other service providers and, in some industries, suppliers) in 2022 hold the potential to have a positive ripple effect on your organization that may be felt for years to come.
• Trust supports retention: In the face of the “great resignation,” leaders are increasingly looking for ways to attract and retain great talent. Trust has always played an important role in retention. With employees increasingly looking to their employers to serve as a pillar of trust and ballast in an uncertain world, trust is more important now than ever before. For trust in businesses and business leaders to persist, however, leaders need to commit to walking their talk on a long-term basis and bringing goodness into everything they do on the job and beyond.
• Trust builds brand loyalty: Trust in brands is no longer just about consumers feeling confident that a product or service they’ve purchased will work. A 2021 study published in the MIT Sloan Management Review found that “Brand trust, love, and respect don’t just give meaning to customers’ lives; they also create a safe haven where things seem right with the world, especially in turbulent times.” At this time, business leaders have a rare opportunity to leverage trust as a way to build strong and potentially lasting relationships between consumers and their brands. On the flip side, leaders also need to recognize that in this climate, any perceived misalignment between an organization’s offerings and its stated mission is also going to be under increased scrutiny.
• Growing trust in business gives leaders an opportunity to build better workplaces and a better world: The growing trust in business globally means that people are increasingly looking to business leaders to take more responsibility in the world at large. While I do support drawing a line between business and politics, the compelling evidence about people’s growing trust in businesses, and specifically their own organizations and CEOs, suggests that leaders do have a role to play in building better workplaces and a better world.
Whether it is how they source products or address social inequalities at the level of recruitment, leaders need to acknowledge that their employees increasingly want them to use their platform and sphere of influence to help drive both business and social change.
Dr. Camille Preston is a business psychologist, leadership expert, and the founder and CEO of AIM Leadership.