BOSTON: Trust is more important to brands than ever, and a company's perceived trustworthiness could make or break them.
That's according to BCG's Trust Index, which measures and decodes stakeholder perception of the trustworthiness of more than 1,000 of the world's largest companies. The report found that higher levels of trustworthiness can lead to improved economic value for the company, as well as carrying value for recruitment, a company's Net Promoter Score, and its ESG performance. In fact, the Index's 100 most trusted companies generated 2.5 times as much value as similar businesses.
The factors most critical for contributing to higher levels of trust overall? Transparency (31%) and resilience (30%), followed by fairness (22%) and competence (19%). This is slightly different for the lowest rated companies, however, for whom resilience — or lack thereof — weighed most heavily. Social media is also perceived to carry more weight for low trust companies: social media accounted for 28% of the trust score of companies in the bottom 100 compared to 12% of the score for the top 100.
The Index also identified trust "destroyers", "foundations" and "enhancers." Destroyers include corruption, fraud, scandals and catastrophic events. Trust foundations include the company's financial position, governance and workforce and product and service performance. Trust enhancers, meanwhile, are strategic collaboration and investment, innovation, digital capabilities, social responsibility and environment and sustainability.
These tools can be leveraged differently depending on how the company is perceived. High trust companies should invest in trust enhancers and be sure to act quickly in the case of a trust-destroying event, emphasizing their transparency and fairness in the process. Low trust companies, on the other hand, must focus on improving their resilience in the face of crisis. Once they've done so, improving governance, quality of products and services, and support for their workforce are key, according to the report.
The good news, for low trust companies in any case, is that trust is dynamic. The Index reports that fewer than half of the top 100 companies in any given year remain at the top of the list by the following year, and the same is true of the bottom 100. By focusing on decreasing trust destroyers while capitalizing on trust enhancers, any company can strive to improve its perceived trustworthiness.
The Index scrapes the internet for real-time stakeholder communications and uses natural language processing and artificial intelligence to analyze and quantify trustworthiness perceptions of the companies measured.