The Trust Advantage: How to Stand Out in a Competitive (and Risky) Market
The start of 2024 has been marked by two significant reports that shed light on the complexities of our world: the 2024 Edelman Trust Barometer Global Report and the World Economic Forum Global Risks Report 2024. While one looks at how much we trust the main institutions in society (business, government, NGOs and the media), the other identifies the interconnected web of risks we face today.
Navigating the Trust Terrain
The Edelman report paints a clear picture of how the public views our main institutions. Here’s the kicker: business is the only one that is trusted. Although businesses remain relatively trusted compared to other institutions, there’s a clear warning signal for them to proactively work on improving.
Deciphering the Global Risks Puzzle
The World Economic Forum (WEF) report is a comprehensive analysis of both the short-term (2 year) and long-term (10 year), intertwined, global risks we’re facing. Think economic instability, environmental challenges, geopolitical tensions, societal upheavals due to inequality, and technological innovation.
This report stresses the urgent need for global collaboration and proactive strategies.
Merging Perspectives for a Broader View
Here’s where things get interesting. When we mesh the insights from both reports, we get a multi-dimensional view of our global challenges, and how much we trust institutions significantly impacts how we tackle these risks.
The trust dynamics outlined in the Edelman report directly impact how we may address the risks highlighted by the WEF. It’s like a dance between perception and reality – how we see our institutions influences how effectively we can tackle global challenges.
And there are problems.
- We don’t trust the institutions we should be able to rely upon to tackle the coming risks.
- We do not trust information given to us by our leaders and the media.
- We believe that innovation, which is what we need to tackle the risks, is not well-managed.
How to Build Trust in a Sceptical World
So, what’s the game plan for SMEs? How do we navigate these waters and take advantage of the shift in trust? Here are some thoughts:
The Edelman report underscores a general skepticism towards institutions. For SME owners and managers, this is an opportunity to step up and fill the trust void. Here’s how:
- Transparency is King: We don’t trust Establishment leaders to tell us the truth, so be clear about your business practices, supply chains, and pricing. Customers gravitate towards businesses they can trust.
- Ethical & Sustainable Practices: Implement and highlight ethical business practices. Whether it’s fair trade, sustainable sourcing, or charitable initiatives, let your ethics shine through. Climate change has become an integral part of planning. Extreme weather events are the new risk, so we can lead on the energy transition.
- Great communication: Invention is not enough. Explain the positive impacts of your innovations and what you do, and answer questions to gain trust, acceptance and adoption. Implementation as important as innovation.
- Speak up: CEOs are expected to speak up about issues and changes in society, not just the changes happening in their business.
- Embrace (some) regulation: People need to know that innovations have been properly evaluated (by scientists), are ethical, and are regulated effectively. Confidence in effective regulation drives adoption.
- Personal Touch: Use your size to your advantage. Build personal relationships with your customers, employees, and suppliers, making them feel valued and heard. Trust is local.
This is more than just a balancing act between mitigating risks and building trust. It’s about laying down the groundwork for a future for SMEs that is resilient, equitable, and where collaboration is the norm, not the exception. The insights from these reports are not just interesting food for thought; they are a call to action that SME owners and managers can use to their distinct advantage.
Trust is built through action. Explore how to strengthen it through sound governance in Small Business, Big Impact.
Bronwyn Reid
16 January 2024
[email protected]
https://bronwynreid.com.au
0417 602981