roadmap to building trust presented by richard edelman bridging cultural gaps alfred herrhausen...
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Roadmap to Building Trust
Presented byRichard Edelman
Bridging Cultural GapsAlfred Herrhausen Society for International Dialogue
17th March 2003
Agenda
1. Quantified differences between U.S. and Europe.
2. Roadmap for bridging cultural differences.
Cultural Differences Are Magnified
Difficult economic environment.
Prospect of war.
Divergence -- left-leaning Europe, right-leaning U.S.
Stronger interest in maintaining local culture.
Companies are put in between home country and need to adapt to local market.
U.S. and European Views are Diverging
Trust in business has increased in the United States, but eroded in Europe.
In the U.S., perception is that business is sound.
In the United States, trust in government has slipped from its post-9/11 high, and remains low in Europe.
“Trust void” in Europe.
NGOs are growing in influence and authority. They are ranked equal to businesses in the U.S., but in Europe outrank business, government, and media.
Media maintains some strength, but is off its 9/11 high.
Trust in Institutions 2003
48% 49%39%
28%35%
45%
25%32%
0%
20%
40%
60%
80%
100%
Business NGOs Government Media
US Europe
Now I would like you to tell me how much you TRUST each to do what is right. Please use a 9-point scale where one means that you “DO NOT TRUST THEM AT ALL” and nine means that you “TRUST THEM A GREAT DEAL”. [TOP FOUR
BOXES SHOWN]
U.S. Trust in Institutions (Tracked 2001-2003)
44%
36%
20%
41%
35%
27%
44%48%
30%
43%38%
41%39%
28%
49%48%
0%
20%
40%
60%
Business NGOs Government Media
Summer 2001 Winter 2002 Summer 2002 Winter 2003
Now I would like you to tell me how much you TRUST each to do what is right. Please use a 9-point scale where one means that you “DO NOT TRUST
THEM AT ALL” and nine means that you “TRUST THEM A GREAT DEAL”. [TOP FOUR BOXES SHOWN]
European Trust in Institutions (Tracked 2001-2003)
32%
48%
36%
23%
51%
26%
33%
42%45%
25%
32%
41%
20%
26%
43%
35%
0%
20%
40%
60%
Business NGOs Government Media
Summer 2001 Winter 2002 Summer 2002 Winter 2003
Now I would like you to tell me how much you TRUST each to do what is right. Please use a 9-point scale where one means that you “DO NOT TRUST THEM AT ALL” and nine means that you “TRUST THEM A GREAT DEAL”. [TOP
FOUR BOXES SHOWN]
Across all regions, technology, consumer durables, and consumer packaged goods sectors command high levels of trust.
However…
In the U.S., scandals and criminal investigations have contributed to making energy, telecommunications, and professional services (including accounting) the least trusted industries.
In Europe, investment/insurance and retail financial services sectors are least credible, while healthcare and airlines are highly trustworthy.
Industry Sectors Under Siege
Benchmark: Trust in Sectors
Now I would like you to tell me how much you TRUST each to do what is right. Please use a 9-point scale where one means that you “DO NOT TRUST
THEM AT ALL” and nine means that you “TRUST THEM A GREAT DEAL”.
42%
44%
47%
38%
55%
59%
36%
36%
38%
40%
42%
43%
45%
48%
51%
65%
66%
66%
30%
42%
54%
54%
51%
58%
0% 20% 40% 60% 80% 100%
Telecomm
Energy
Professional services
Healthcare
Retail financial services
Investment & insurance services
Pharma & drug
Airlines
Automotive
Technology
Consumer packaged goods
Consumer durables
US
Europe
Rank order by US data
Opinion leaders report highest levels of trust in the company they work for
In the United States, mega-brands like Microsoft and Ford command higher levels of trust than NGOs like Greenpeace.
But, U.S. tracking data show’s that NGOs are gaining in the ranks.
The most trusted brands in Europe are NGOs, but the gap is closing between the least trusted NGO and the strongest corporate brand.
Certain U.S. consumer brands (notably McDonalds and Coca-Cola) are less trusted in European markets.
However, major European brands (e.g. Deutsche Bank) maintain comparable trust levels in the United States and in Europe.
Brand Evaluator
Brand Evaluator – U.S. 2003
13%16%
25%29%30%
35%36%36%37%
40%41%
45%47%47%
49%52%
54%55%
56%59%
66%69%
0% 20% 40% 60% 80% 100%
HSBC*Oxfam*
Unilever*Royal Dutch/ Shell
Deutsche BankExxonMobil
MonsantoBASF
CiticorpDow Chemical
GreenpeaceAmnesty
NikeMerck
World Wildlife FundPfizerBayer
McDonalds
Ford MotorMicrosoft
Coca-ColaJohnson & Johnson
* “Never Heard Of % ” over 15
Brand Evaluator – Europe 2003
12%14%
16%21%22%
25%27%28%
30%32%
34%34%
36%37%38%
42%47%
49%51%
62%62%
34%
0% 20% 40% 60% 80% 100%
Monsanto*Citicorp*
Dow Chemical*Pfizer*
McDonaldsHSBC*Merck*
ExxonMobilDeutsche Bank
Royal Dutch/ ShellNike
Johnson & JohnsonUnilever
BASFCoca-Cola
Ford Motor CompanyBayer
Microsoft
OxfamGreenpeace
World Wildlife FundAmnesty International
* “Never Heard Of % ” over 15
How do we bridge gaps in a world filled with mistrust, and facing a difficult geopolitical and economic environment?
What can business do?
The Road Map
Must look beyond traditional constituencies of Wall Street, regulators.
Must bridge cultural gaps from the “inside out.”
Speak simultaneously with all audiences – “paradox of transparency.”
Take position on key issues – global trade, intellectual property.
Business’ Action Plan
Inside-out Approach
Opinion leaders report highest levels of trust in the company they work for.
Natural affinity toward companies perceived to be local
Credibility declines as companies are perceived as more “global”
Build brands from the “Inside Out,” -- start with employees
Local subsidiary must be given the latitude to interpret and respond to cultural differences without jeopardizing the company’s core values.
71%
55%
31%39%57%
49%
28%36%
0%
20%
40%
60%
80%
100%
The companyyou currently
work for
Localcorporations
Largenational
corporations
Globalcorporations
US Europe
Now I would like you to tell me how much you TRUST each to do what is right. Please use a 9-point scale where one means that you “DO NOT TRUST THEM AT ALL” and nine means that you “TRUST THEM A GREAT DEAL”. [TOP FOUR
BOXES SHOWN]
Credibility Declines for Global Firms
Change the Communications Mix
Information conveyed through news media is significantly more trusted than advertising.
Print (business magazines and news weeklies) has high credibility across the board, particularly business magazines.
Radio and TV news are significantly more trusted in Europe than in the United States.
Overall, advertising is not seen as a source of credible information about a company.
Opinion leaders are skeptical of information conveyed through advertising.
17%
20%
45%
58%
37%
44%
52%
4%
5%
20%
32%
35%
45%
49%
0% 20% 40% 60% 80% 100%
Corporate advertising
Product or serviceadvertising
TV news coverage
Radio news coverage
Articles in newspapers
Articles in newsweeklies
Articles in businessmagazines
US
Europe
Types of Media Coverage
Percentage saying source is “Extremely” or “Very Credible”
Rank order by US data
In general, how credible do you feel each of the following sources is for information about a company? Is information about a company that you get from (INSERT SOURCE) extremely credible, very credible, somewhat
credible, or not credible at all?
Advertising vs. Articles in Media
86%
12%
1%
83%
7%9%
0%
20%
40%
60%
80%
100%
I believe informationthat I get from articlesor news stories more…
I believe informationthat I get from
advertisements more…
Neither
U.S. Europe
Please tell me which statement you agree with more.
I believe information that I get from advertisements more than I believe information that I get from articles or news stories
I believe information that I get from articles or news stories
more than I believe information that I get from advertisements
The most trusted spokespersons are those who are seen as having no vested interest in the company.
Across all regions, this includes academics, doctors, and representatives of NGOs.
In Europe, doctors, lawyers, academic, broadcasters and regular employees, are the most credible. There is a much higher regard for media in Europe than the U.S.
U.S. are more skeptical of all audiences, but favor academics, doctors, NGO rep. and the U.S. president.
Those perceived to be in the pay of companies are the least credible spokespersons.
Across all regions, this includes corporate public relations representatives, entertainers/athletes, and union reps.
Use Outside Experts
Credibility of Information Spokespersons
Percentage saying source is “Extremely” or “Very Credible”
Rank order by US data
16%
14%
19%
26%
40%
48%
33%
31%
40%
43%
54%
1%
7%
8%
10%
13%
13%
14%
22%
23%
25%
32%
18%
24%
28%
46%
26%
36%
37%
43%
0% 20% 40% 60% 80% 100%
Entertainer/ Athlete
Company's PR rep
Union rep
Legislator / parliamentarian
Broadcaster
Lawyer
CEO of company
Average person, like yourself
Banker
Religious leader
Regular employee of company
President/ Prime Minister/ Chancellor
NGO rep
Doctor or healthcare specialists
Academic
US
Europe
In general, when forming an opinion of a company, if you received information from (INSERT PERSON) about this company, how credible would the
information be? Would it be extremely credible, very credible, somewhat credible, or not credible at all?
A single source of information no longer exists.
Multiple stories in the media generate higher levels of trust than single sources.
Primary players in the “web of trust” are friends, family and independents.
Opinion leaders are more likely to trust a regular employee than a CEO to give them credible information about a company.
Use Multiple Channels
Frequency of Communications
64%
77%
79%
87%
0% 20% 40% 60% 80% 100%
I am skeptical about the truthfulnessof communications if I only see, read
or hear it one time
I usually don’t believe something thefirst time I see, read or hear it; I am
more likely to believe something I see,read or hear from many different
sources
Europe US
Percentage saying they “Agree” or “Strongly Agree”
Credibility of Communications Sources
26%
27%
32%
34%
33%
42%
51%
40%
11%
13%
19%
19%
25%
25%
26%
35%
38%
35%
0% 20% 40% 60% 80% 100%
Information conveyedby CEOs/ CFOs
A company Web site
Communications issuedby company
The Internet in general
Information conveyedby regular employee
Communications issuedby third parties
Stock or industryanalyst reports
Friends & family
Colleagues
US
Europe
Rank order by US data
Percentage saying source is “Extremely” or “Very Credible”
In general, how credible do you feel each of the following sources is for information about a company? Is information about a company that you get from (INSERT SOURCE) extremely credible, very credible, somewhat
credible, or not credible at all?
Cultural bridges are built on trust, openness, transparency and dialogue
Local subsidiary must be given the latitude to interpret and respond to cultural differences without jeopardizing the company’s core values.
Business retains enough credibility in the United States to take a leadership role. There is a clarion call to European business to step up to fill a trust vacuum in the region.
Move from a “BUY IT” to a “BE IT”
Engage with critics, such as NGOs
Interact with multiple stakeholders and go outside traditional constituencies
Inside-out approach – start with employees
Deliver your message repeatedly, across multiple channels
Trusted relationships are built by engaging audiences in dialogue, not the traditional model with uses advertising for message frequency and control.
Conclusions