In the UK, the proportion of people surveyed for the annual study who said they trust business “a great deal” dropped to 10 per cent, down from 17 per cent a year earlier. Worse still, for top executives, CEO’s were the fourth least-trusted spokespeople (ranked at 39 per cent) out of the 11 possible choices – ahead of only entrepreneurs (37 per cent), boards of directors (36 per cent) and bloggers (20 per cent).
The new CEO: the chief engagement officer
With the gap between trust in businesses and trust in CEOs larger than ever, Edelman president Richard Edelman said at the report’s launch event in London today (21 January) it is now time for top executives to “step out of their comfort zone” and become “chief engagement officers” in order to set the context for a change in trust levels.
He advised CEOs to “participate” – in the form of speaking to customers, similar to the way in which politicians go on listening tours – “advocate” – speaking out on issues but not “hiding behind a trade association” and not just speaking out when the business is undergoing a crisis – and to “evaluate” the impact of these changes on society as they go.
The role of the new leader is also in defining their company’s core purpose, according to the former BP chief executive Lord John Browne, who headed up the energy company from 1995 before resigning in 2007.
He said at the event: “Leaders should examine deeply the purpose of their business activity and define their contribution to society beyond financial performance. The next generation of CEOs will spend more time than ever looking at the degree of and enacting their core purpose – and if they’re bold enough the prizes can be enormous.”
Part of defining a company’s core purpose will also involve learning from failures, Lord Browne said. He advised CEOs to set expectations that there “should be failures, will be failures and that we will learn from them…if you [communicate] everything as successful then no learning takes place” and pointed to Canadian engineers who used to wear rings made of steel from bridges that had collapsed to remind them of past failures.
The art of delegation
The Trust Barometer found the UK “informed public” trusts regular employees (ranked at 52 per cent) more than chief executives (39 per cent), which is why chief engagement officers should look to “dispersed authority” to boost the perception of their organisations.
Edelman said: “If you are a smart CEO you will allow and encourage employees to go out and speak on your behalf as they are more credible than you are and make them heroes when they talk.”
CEOs should also look to other companies within their sector to “get ahead of the game” when it comes to regulation in order to win back trust over the way they operate, according to the former chair of the Financial Services Authority and current Institute of New Economic Thinking research fellow Lord Adair Turner.
He added: “There needs to be some examples of an industry group, whether that’s a trade association or a combination of businesses, to be the first out of the door to say there’s a problem here [such as sugar in food or corporation tax practises] and we are going to propose what the regulation should be because we know that will be good for the good business operators and not the cowboys.”
How marketers can help shape the business trust revolution
Principal among a company’s advocates should of course be its marketing staff, who should look to create “constant campaigns” around their brand’s purpose, according to Edelman UK CEO Ed Williams. But he warned that “brand can be your greatest asset and also your biggest threat if it’s not authentic”.
He told Marketing Week: “Unilever is a great example where the brand adds something beyond what the corporation does, it says what’s important to the corporation, what it cares about and it’s able to project that…
“Purpose is an important part of the mix, it’s not the principle driver of trust but it’s one of the drivers of trust…I don’t think you switch it on and off, it’s something you’re constantly having to promote, talk about and engage your stakeholders with. Don’t think of it as a one off project. When you run into trouble is when there’s a disconnect between what the brand says publicly and what it delivers”
Upticks in the financial services sector prove this works
For the UK financial services sector, more than half of respondents said increased trust over the past year was due to the industry taking on a new role (55 per cent), improved ethics in the industry (54 per cent) and a change in corporate culture (51 per cent).
Ed Williams said this is evident in the improvements in consumer perception of Barclays over the past year in the wake of the LIBOR rigging scandal in 2012. It led to the appointment of a new CEO Anthony Jenkins who promised to reinvent the business to be “values driven” and resulted in a number of brand purpose-led marketing and communications campaigns.
Williams added “There’s an opportunity for business to lead and the financial services sector shows how positive action can shift the public trust demographic…it’s about engagement, authenticity and action.”
Outside of the financial services sector, Richard Edelman pointed to Unilever CEO Paul Polman, General Electric CEO Jeff Immelt, Starbucks CEO and chairman Howard Schultz and former Walmart CEO Mike Duke as examples of business leaders who have made the chief engagement officer-type role work for their companies.