I’m sitting at home on Zurich Lake. The world’s elite are overhead in helicopters on their way to the World Economic Forum in Davos. They will hear from PR supremo Richard Edelman that trust in banks and other corporations has collapsed while Government is back in favour. For this, they disturb my afternoon nap?
According to the 2009 Edelman Trust Barometer, the public is now nervous of banks and finds itself reliant on government. Can you imagine any other survey results at this moment?
Don’t get me wrong. I love a survey: they’re fun. I love Edelman’s survey: it’s annual and so we get a decent run of material. I love it that my industry has a firm doing research, and doing it consistently.
Still, when anyone says they have survey data on people’s happiness, or who they trust, prepare to get forensic.
Edelman’s data are no surprise. And sure, restoring trust in some firms will be like climbing Everest without oxygen. At one level, the firms face a technical job: getting solvent again. They also have to overcome a well-earned reputation for vanity and cockiness. That’s a human issue of huge interest.
But what a fabulous opportunity this presents for the PR industry. Do our job right and we will be able to hold out heads high when our children ask: “What did you do in the Great Crisis of 2009, daddy (and mummy, of course)?”
CEOs and world leaders shouldn’t ski off the mountain’s edge in panic. Instead, they should interrogate the contradictions in the Trust Barometer’s findings. It seems three-quarters of consumers say they won’t buy products from a company they don’t trust. But, according to the latest IMF forecast, overall consumption and output in some markets looks set to drop by a few percent at most in the developed world. While global economic growth is still predicted to be a half of one percent, which is effective stagnation, rather than decline.
So either the public has more trust in firms than they say, or they are lying when they say they won’t buy from the “untrustworthy”.
Fact is lots of firms have retained the trust they need. And you could go further: we do in some sense still trust banks, since they are still doing most of what most of us ever used them for.
If people are not buying cars or houses, a lack of trust has nothing to do with it. The problem is a shortage of money and credit. We can’t have it both ways. We don’t trust banks now because they were so profligate before. Being mean makes them hateful, but more trustworthy.
When people say they won’t buy goods from corporations they don’t trust we should not take take them at their word. We aren’t shopping now because we are all shopped-out after a decade-long binge, and we’re feeling insecure. But I don’t hear consumers refusing to be customers of this or that firm through lack of trust.
I think people are talking nonsense to Edelman’s researchers.
They are expressing their anger about the state of the economy and sending an emotional message via a survey. Given the mess we are in, who can blame them?
Governments might well be more trusted than previously. Any port in a storm. Besides, the whole point of “The State” is to be a lender and regulator and everything else of last resort. However nobody seriously expects or wants governments to take over any industry, including banks, except as a temporary measure. The public is arguably as angry at state intervention with taxpayers’ money as it is at the private sector’s recent incompetence.
Moreover, Edelman reports that NGOs are getting the most trust in every region of the world except Asia-Pacific. But we don’t trust or expect NGOs to run banks, manufacturing or even our regulatory systems. So, it is an interesting point that they are liked more than before, but not a very insightful one.
Besides, we may be trusting NGOs because trust has to be placed somewhere. If you stop trusting journalists, politicians, businesspeople, etc – in some sense other non-controversial bodies (like charities) seem comparative beacons. They didn’t earn more trust. It got dumped on them. Nothing changed.
But, sure, we’re a bit short of people to trust just now. Good, one might say. A bit more scepticism (a bit less trust) might have kept us safer all along. Richard Edelman is quoted saying:
It has been a catastrophic year for business. It’s going to be harder to rebuild our economies because no institution has captured the trust that business has lost – trust is not a zero-sum game.
But isn’t this circular? We’re frightened. But the trouble will pass and we will become less frightened.
Other key findings also come with a measure of upbeat signs. Here’s a script:
Edelman: Trust in nearly every type of news outlet and spokesperson is down from last year. Trust in business magazines and stock or industry analyst reports—last year’s leaders—decreased from 57% to 44% and from 56% to 47%, respectively.
PS: Why would we trust the media which didn’t warn us of our impending doom and has no striking solutions for it?
Edelman: Globally, only 29% trust information about a company from a CEO—down from 36% last year.
PS: Perhaps, but the Edelman survey also reveals that sixty percent said they need to hear information about a company three to five times before they believe it. So they are more likely to want to hear more – not less – from everybody, including CEOs, analysts, experts, academics and media. Leaders still have to lead and show they have confidence in their ships’ ability to float.
Edelman: Only 13% trust corporate or product advertising—down from last year’s low of 20%.
PS: Sure. Why not say you distrust everything, just to be safe?
Edelman: In the UK, France, and Germany, trust in business was already at a low level of 36% among our tracking audience of 35-64 year-olds – and stayed there this year. The only EU countries where business made a notable gain in trust were the Netherlands and Sweden.
PS: What? No change? That shows that events had no impact. So perhaps we need to dig deeper into what message respondents are sending us. How do we square the absence of trust in corporate utterance with the mainentance of trust in the bodies as a whole?
Edelman: By a 3:1 margin, respondents say that government should intervene to regulate industry or nationalize companies to restore public trust.
PS: Regulation and nationalisation are profoundly different things. And both come in lots of forms. The question and answers are sort of meaningless.
Edelman: In the major Western European economies of the U.K, France, and Germany, three-quarters say that government should step in to prevent future financial crises (73%, 75%, and 74%, respectively); in the United States, not even half (49%) say that the free market should be allowed to function independently.
PS: The public currently hates the “free market” and wants more government control. Who doesn’t? But again I doubt any very large or long-lasting politicial shift here. We’ll see.
Edelman: Globally, the call for government intervention also extends to issues like energy costs, global warming, and access to affordable healthcare, as respondents, by at least a 2:1 margin, say government has the primary responsibility for solving these issues. But business must collaborate: Two-thirds (66%) expect business to partner with governments and advocacy groups to solve these issues.
PS: Great. Death to socialism! Long live the state fixing market failure with the minimum of intervention.