Continuing my series on tips for improving your corporate and stakeholder communication, let’s look at one of today’s top business issues: building trust.
Your written materials are often the first and only tangible means by which a prospective customer or stakeholder evaluates your company. Investors, for example, have virtually unlimited sources of information at their fingertips to help them make decisions. But even audited numbers don’t mean much without trust in company management.
Recognizing new realities
Traditionally, you could rely on showcasing your products and services or leadership team to help establish corporate reputation. Not any longer. The reputation of today’s leading companies is shaped by vastly different factors.
In fact, trust has become an essential line of business in Canada, according to the 2011 Edelman Trust Barometer. Of 10 reputational factors, 83% of Canadians surveyed rank transparent and honest business practices first, followed closely by quality products and services at 81%. Perhaps surprisingly, financial returns is the least important reputational factor among Canadians.
Similarly, 82% of those surveyed want business to create shareholder value in a way that aligns with society’s interests, even if that means sacrificing shareholder value. Although, your banker may not be among this group.
Nevertheless, trust now has tangible value. Consider this … If your company is trusted, 40% will believe positive information after hearing it one to two times. But if your company isn’t trusted, only 7% will believe positive information after first hearing it.
The same is true with negative information: fewer believe bad news about a trusted company when they first here it.
Some industries, however, are more trusted than others. Globally, technology is trusted most (81%), followed by automotive (69%) and telecommunications (68%), while financial services is at the bottom of the heap (50%).
Industries rankings vary geographically, with Canadians staying true to their rumoured preference by ranking brewing and spirits as the second most trusted industry. Go figure, eh.
Creating trust and competitive advantage
So, how do you address this new reality and create competitive advantage?
Whether your company is private or public, the answer is to create a mosaic of trust through strategically conceived and written messages. First, however, you must commit to open communication. That means being transparent about your operations, how you make money, how you treat employees and how you respect the environment.
Stakeholders are looking for leaders who will deliver stakeholder value in new ways. They also want companies to communicate frequently and honestly and consider the role of business in society. In other words, they expect straight talk and the whole story.
Transparency and honesty build credibility and that, in turn, builds trust. So tell it like it is, warts and all, by:
• providing a balanced discussion of strengths and weakness
• translating problems into business risks
• aiming to inform, not impress
By following this transparent approach across your entire communication platform, your company will earn a fair reputational value, no matter how it is measured.
Today, you have an opportunity to build trust by committing to a collaborative approach to business that benefits society, not just shareholders. Remember, trust is no longer a commodity that is acquired, but rather a benefit that is earned.
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Richard Ketchen helps companies get the right message out to stakeholders. An accountant by training but a writer at heart, Richard has worked with leading companies across North America to develop strategies and craft messages for annual reports, websites and other stakeholder communication. You can download a free copy of Richard’s report “How to build trust through strategic messaging” at his website. (http://richardketchen.com/)