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Why trust is really important to your organization

01 Jun, 2020 Reputation, trust, stakeholder relations

This article was originally published in 2015 and has been completely updated in 2020.

Trust is really important to us as individuals. We have all wondered at some stage, “How far can I trust this person to do the right thing?” But trust applies just as strongly to organizations. Trust allows people to rely on others without feeling obliged to protect themselves with legal precautions at every turn.

Trust between organizations depends greatly on the history of interactions between them or on word of mouth about their previous interactions with others—actions always speak louder than words. Trust is developed when behavior matches expectations. Trust is also related to reputation and ethics, and is crucial to business relationships because almost every business transaction requires a degree of good faith and trust.

Being trustworthy generates a range of organizational benefits, as shown in the extract below from the Edelman Trust Barometer 2020 report:

Definition

Trust is a complex concept, which is difficult to define precisely. One widely used definition states that trust is willingness to accept vulnerability based upon positive expectations of the intentions or behavior of another. In other words, if you trust someone, you are accepting that while it is possible they could act to disadvantage you, they are not likely to.

Trust relates both to interpersonal and group interactions. Individuals are the trustors in the organizational context, but the trust they extend may relate to a larger entity, such as management or the organization as a whole. For organizations, trust is necessary for cooperation and communication, and the foundation for productive relationships. The practical relevance of this is that trust is the strongest predictor of consumer satisfaction (Rawlins, 2007). Due to its importance, trust should be measured and included as a critical indicator on the dashboard of any organization concerned about relationships and reputation.

The most credible sources of information for forming an opinion about a company are:

  • 68% Company technical expert
  • 66% Academic or industry expert
  • 61% A person like yourself
  • 54% Regular employee
  • 47% Financial or industry analyst
  • 47% Successful entrepreneur
  • 47% CEO
  • 44% NGO representative
  • 44% Board of directors
  • 36% Journalist
  • 33% Government official or regulator (Edelman Trust Barometer, 2020, page 63).

Trust and public relations

For public relations practice to be effective, people need to trust you. There’s no point in conveying a message if people don’t trust the source! Therefore, the first requirement is for you to have credibility. Credibility in PR is the confidence that receivers have in the accuracy and truthfulness of your message. To be credible is to be believed. In fact, the word ‘credible’ derives from the Latin word credo, which means ‘I believe’. Credibility is not the same thing as trust, but is closely related. Like trust, source credibility is a complex concept depending on a range of factors. Trustworthiness, competence and honesty appear to be the most important factors contributing to credibility.

Trust is also essential for good relationships between organizations and their stakeholders—and fostering good relationships is generally considered to be a key function of public relations. As the practice of public relations becomes more focused on outcomes and not solely on the output of messages, the contribution of building, maintaining and sustaining mutually beneficial relationships that help organizations achieve their goals has evolved as a central role for public relations. Therefore trust is central to effective PR.

Regaining trust

Reduced or lost trust? Some people consider that trust is like a sheet of glass—once broken it can never be the same again no matter how hard you try to glue it together.

However, a study by researchers from the Wharton School of Business at the University of Pennsylvania suggests that “trust harmed by untrustworthy behavior can be effectively restored when individuals observe a consistent series of trustworthy actions. Also, making a promise to change behavior can help to speed up the trust recovery process.” (But when a person’s trust is violated and the violation includes deception, that trust never fully recovers.)

How can companies rebuild trust?

  • Be open and honest in business practices (94%)
  • Communicate more clearly, effectively and straightforwardly (93%)
  • Visibly demonstrate concern and consideration for employees (50%)
  • Be involved with the community (50%) (Rawlins, 2007).

These findings have implications for public relations practice where other parties feel aggrieved by the actions of the organization and therefore lose trust in it.

Just as the organization can’t create a good reputation through its own actions only, trust also depends on the perceptions of the other party. Those perceptions are influenced by transparency, which means that the organization tells the truth and others can verify it. This allows it to admit mistakes and others will still trust it.

Reference: Brad Rawlins (2007). Trust and PR practice. Retrieved from http://www.instituteforpr.org/

Article updated in 2020.

About the author Kim Harrison

Kim Harrison loves sharing actionable ideas and information about professional communication and business management. He has wide experience as a corporate affairs manager, consultant, author, lecturer, and CEO of a non-profit organization. Kim is a Fellow and former national board member of the Public Relations Institute of Australia, and he ran his State’s professional development program for 7 years, helping many practitioners to strengthen their communication skills. People from 115 countries benefit from the practical knowledge shared in his monthly newsletter and in the eBooks available from cuttingedgepr.com.

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