Business or government: Who do you trust more?
Skepticism towards major institutions remains at an all-time high, according to a new global survey.
Government remains one of the least-trusted institutions, while businesses got the most improved award in the 2016 Edelman Trust Barometer, released Tuesday at the World Economic Forum in Davos, Switzerland. The dissatisfaction towards politicians is in line with the latest Gallup poll, in which Americans ranked government and the economy as the most important problems in early January.
A lack of trust in government is based on the view that the institution is inefficient, unable to get things done and full of strife. Conversely, "business is actually seen as terrific, it gets things done, it is accountable if leaders don't succeed they get changed out. Business has had a huge rally in trust," said Richard Edelman, president and CEO of Edelman.
To some this may come as a surprise, but businesses are more trusted than government in 21 of 28 countries. Eighty percent of those surveyed believe business can both increase its profits while improving the economic and social conditions in the communities in which it operates. Edelman insists "trust matters because people buy products, recommend products, want to work for companies that they trust. If trust doesn't exist you have a really hard time getting things done."
"Leaders now have to behave differently if they want to gain, trust they have to be out in front. So many CEOs put their heads down for the last seven years since the Great Recession and that is the actual opposite of what is going to work in the future," said Edelman.
Edelman believes executives need to put themselves out there and have more visibility. "Do you know that in more than half the countries in the mass population they can't name a single CEO, CEOs are so head down that they are totally unknown? I think the smart CEO's like Howard Schultz of Starbucks or Tim Cook of Apple or Paul Polman of Unilever -- they're actually taking on issues that matter to society. Eighty percent of people in our survey of the Edelman barometer said 'I want to know that a company's going to make money and deliver against societal issues.' And that's a big change from 5 years ago," added Edelman
The Edelman Trust Barometer also revealed the largest ever trust gap between the informed public (defined as those who are college educated between the ages of 25 to 64 with a household income in the top 25 percent of their percentile in their country and reads the news) and the mass population.
The two main culprits: income inequality and different expectations for the future. Less than half of the respondents surveyed believe they will be better off in five years' time.
"The unbelievable divide in the opinions of the elites and the mass population -- this divergence appeared after 2009 but it has really widened profoundly and it's really on the basis that the elites think things are going really well and the mass population is pretty much flat lined since the recession." said Edelman.
When it came to the media, search engines and traditional media were the two most trusted sources for general news and information. Online media showed an impressive gain on the Trust Barometer.
How might "trust issues" play out on a company level? InterContinental Hotels Group CEO Richard Solomons, attending the World Economic Forum in Davos, said trust is an especially important factor in today's hotel industry, where technology and social media can help foster a strong sense of community among hotel guests that builds both customer trust and, ultimately, customer loyalty. With 5,000 hotels in over 100 countries, he attributed the company's trustworthiness to the fact that the InterContinental brand is over 70 years old.
"Trust has become a really important need for customers," Solomons said. "When there's so much uncertainty in the world, whether it's lack of trust in governments, whether it's worrying about things like the Lehman financial disaster, what's happening to interest rates, what's happening with terrorism, there's just a lot of areas of uncertainty. What we found is that customers are looking for organizations that they can trust."
Solomons said IHG now goes beyond just trying to make the booking process seamless and has tried to be ahead of the curve in personalizing the entire customer experience in a digital world. "We spend a lot of time and money and focus on being ahead of the game on digital. Frankly, if that's how your customer wants to interact, that's how you have to interact," Solomons said, citing the hotel company's $4 billion web business and $1 billion mobile business. "We think about the whole guest journey."
