Trust is down, but businesses can rebuild itOPINION // CHRIS TOMLINSON
Most of your customers don’t trust you or your company.
Executives will find this hard to believe, and many will reject the data. But Americans’ growing mistrust of experts and institutions extends to businesspeople and corporations. And that presents a brand problem.
Only 7 percent of American believe that major company CEOs have high ethical standards, and only 9 percent have a very favorable opinion of major companies, according to polling by the Public Affairs Council, a nonpartisan, nonpolitical association for public affairs professionals.
Small-business owners, one of the most trusted groups, scored higher, with 35 percent of Americans considering them highly ethical. In 2015, two-thirds of Americans said they trusted the business community.
“Just when we thought Americans’ views on the honesty and ethics of government and business couldn’t sink any lower, our survey reveals that the trust deficit continues to widen,” the group’s researchers wrote. “Only 42 percent of Americans trust major companies to behave ethically, down from 47 percent last year.”
The primary drivers of a person’s opinion are, as expected, personal experience, news reports and the internet. Social media shaped the impressions of less than half of those surveyed, but 55 percent of people under 21 said it was a significant influence.
More than half of Americans believe that companies do not compensate people fairly, by overpaying executives and underpaying the rank and file.
“People most concerned about executive compensation tend to be older, more educated and more highly compensated themselves,” the report says.
Americans have a wide range of opinions depending on the industry. In a fascinating contrast, a quarter of Americans said they trust food and beverage companies, while more than half said they don’t trust pharmaceutical companies.
“The health insurance sector isn’t rated much higher, with 48 percent calling it less trustworthy and 11 percent calling it more trustworthy,” researchers found. “Other sectors that score poorly include banks and other financial institutions.”
Almost half of Americans believe the pharmaceutical industry needs more oversight, while 41 percent think the health insurance industry needs more regulation.
Energy companies fell near the middle in the polling, with 34 percent of Americans believing they are untrustworthy and 35 percent supporting greater government regulation.
Other surveys have found similar results. The Reputation Institute, a reputation measurement and management services firm, found similar declines in trust for corporations. But it also found that consumers are placing higher importance on a company’s governance.
“Fewer companies are perceived as embodying a sense of sincerity, being genuine and caring,” the institute found in its 2018 consumer survey. “Because of this only 25.5 percent of companies are deemed as sharing the same values and beliefs.”
Generalized perceptions of business create hazards for individual brands. If the public is already predisposed to believe that CEOs can’t be trusted, then merely a whiff of scandal in the C-suite will quickly damage a brand. Watch how quickly social media lynch mobs take down celebrities and politicians for an object lesson in reputational risk.
And take it from a member of the mainstream media, the public loves to pile on when the mighty fall. Sadly, though, few people take satisfaction in the guilty getting their comeuppance. The news reinforces the belief that everyone is crooked.
This is especially true of the 25-44 age group, according to the Reputation Institute. They hold dim views of all institutions, whether commercial, governmental or spiritual.
“All reputation dimension scores are down — especially for citizenship, workplace and governance, because there is a growing belief companies focus on profits over people,” the institute researchers found.
Businesses should not take any comfort in the fact that trust in other institutions is falling just as quickly. Trust is what holds societies together and makes community and commerce possible. Distrust dissolves societies, creates hostility and ultimately engenders violence.
Leaders, business or otherwise, who are authentic, transparent and compassionate can countervail the current trends. Brands that provide quality products, top-notch service and honest transactions can break through the public’s cynicism.
This dynamic is why so many successful CEOs talk about leading purpose-driven companies that do well by doing good. The public is happy to reward businesses that solve their problems while maintaining integrity.
Too often, though, managers are the true cynics who consider these values as naïve and unprofitable. They prioritize marketing gimmicks over customer service. But then again, these are also the men and women who got us to this point in the first place. The moral is quality first and always.
Chris Tomlinson writes commentary about business and economics.chris.tomlinson@chron.comtwitter.com/cltomlinson