How to build trust in a digital ageFollow @PwC
Authors: Olivier Sueur, PwC Advisory, Netherlands and Helene Katz, Banking and Capital Markets , US
The writing on the wall has never been clearer: There is a real crisis of public trust in business, institutions, government and non-governmental organisations. In PwC’s 2017 Global CEO Survey, 69% of CEOs noted it’s harder for businesses to gain and retain people’s trust in an increasingly digitalised world. Technology today amplifies errors and makes misdeeds more visible, fanning cynicism and eroding public confidence in the ability of organisations to behave reputably to achieve their strategy. In an age of instantaneous public judgement, companies that have actively built consumer – and employee – trust perform better in general and in times of crisis.
It has become routine to see brands elevated or broken by a single 10-second video or 140-character tweet. Rolling out corporate statements after the fact has little impact. The 2017 Edelman Trust Barometer — a study of 30,000+ people across 28 countries — reveals confidence in CEOs is at rock bottom. Only 37% surveyed agreed that CEOs are credible as spokespeople, a 12-percentage point drop from 2016 and an all-time low since the survey began in 2001.
Peer-to-peer influence wields the most trust power today. Consumer-generated messages about company activities have greater velocity, persistence and reach. Now, more than ever, organisations must harness that power to accumulate savings in the bank of public trust and goodwill. Organisations with a credit balance — earned through affirmations of its good works — are better positioned to weather a crisis than organisations with no trust equity.
How do businesses build up their balance? High-trust organisations are rigorous at six levels, and consider risks at each of them:
First, they have a strong corporate purpose and are clear about their values and accepted behaviours — whether in the boardroom or online. Since trust is the expectation of consistent, positive actions and outcomes, there must be a shared understanding, commitment and projections of purpose, core values and strategy. Fostering a clear organisational culture enables consistent decision-making, enhancing trust both internally and externally.
Second, their leaders promote alignment between the core values, strategy, business model and risk appetite of the organisation. The CEO’s short-term decisions align with a longer-term vision, and actions today are consistent with those of yesterday and tomorrow. In a digital age, it takes only a few clicks to point out inconsistencies between past and present messages.
Third, highly trusted organisations understand who their direct and indirect stakeholders are, as well as their needs. Technology can be a significant tool to cultivate these relationships.
Next, they manage risk by embedding purpose, values and stakeholder orientation in all processes. To do so doesn’t require a whole-scale culture shift. Companies that successfully build a currency of trust identify specific behaviours that demonstrate the organisation’s purpose, values, and ethics, and create specific goals and incentives in key areas to help achieve them.
High-trust organisations also have robust risk monitoring frameworks to assess whether the way they are working actually leads to the desired outcomes. Sophisticated technologies are available to support monitoring to meet compliance obligations. It is worth noting, however, that risk culture must look beyond the goal of regulatory compliance if it is going to achieve lasting transformation and public trust.
Finally, high-trust organisations demonstrate accountability to all stakeholders and show they are committed to wider social values in addition to the bottom line.
There is no question that technological change has increased business complexity. But it can build or erode trust; ultimately, it is up to business leaders to decide how to leverage technologies to have a beneficial impact on their organisation. An organisational culture that adheres to clear values, is underpinned by a strong risk framework, and successfully leverages digital advancements will achieve greater public trust and ultimately better business.
Olivier is a director within PwC Advisory in the Netherlands, based at the Amsterdam office. He focuses on aligning compliance, integrity and culture to enhance the performance of organisations and has extensive experience in working with financial institutions, regulators, organisations in transport & logistics and professional services firms. Olivier has held several management positions with both financial regulators in The Netherlands: the Dutch Central Bank (DNB) and the Authority for the Financial Markets (AFM). He started his career as a lawyer at the Amsterdam bar.
Helene is a Director in the PwC Banking and Capital Markets team based in New York, specialising in helping organisations develop, implement and execute their enterprise risk management frameworks. Working with her clients, she has focused on developing material risk identification and assessment programs, risk appetite frameworks, scenario analysis and regulatory stress testing programs as well as risk reporting. Helene is currently a member of the PwC project team responsible for updating the 2004 COSO Enterprise Risk Management – Integrated Framework.