Consumers don’t trust what CEOs are saying

Discussion
Oct 19, 2017
Tom Ryan

According to a new global survey from communications firm FleishmanHillard, employees are nearly three times more credible on average than company leaders.

The specific question asked was: “Now thinking more generally, in a time when more and more fake news is circulating about companies, what sources of information do you find most credible when sorting facts from fiction about a company?”

Thirty percent agreed that employees who work in the company are the most reliable source, just behind the top answer, knowledgeable friends, family and colleagues, 34 percent. Leaders of companies scored 11 percent.

The expectation for credible corporate communications on average ranks at the bottom of consumer expectations across all countries. At the same time, the study found consumers looking for corporations to play a more active part in helping shape society. Companies (and their CEOs) were found to be most credible when they are talking about their performance and impact on their communities, but least credible when talking about value and customer care.

FleishmanHillard said the findings underscore a need for a “more authentic narrative” about the value companies deliver to consumers, including what actions they take as corporate citizens.

“CEOs must be an intrinsic part of this — engaging on every level and not just a boardroom fixture,” stated FleishmanHillard in its study. “Companies should also consider giving employees more support and scope to act as brand ambassadors, since they tend to be more credible than social media channels or corporate PR machines.”

The 2017 Edelman Trust Barometer released earlier this year similarly found the credibility of CEOs dropping to an all-time low. Fear of job loss due to the state of trade and automation was likely behind some of the drop in credibility, the study found.

Edelman found employees, on average, are trusted 16 points more than CEOs when it comes to messaging around employee/customer relations (53 percent), financial earnings (38 percent), crises (37 percent), innovation (33 percent), industry issues (32 percent) or programs addressing societal issues (30 percent).

DISCUSSION QUESTIONS: Has the increasing distrust in corporations and institutions weakened messaging from retailers and consumer brands? Should management give employees a louder voice in retail communications or should it be up to CEOs to take a more vocal role in public discourse?

Braintrust
"All businesses, including retailers and consumer brands, need to be more honest and ethical in their behaviors."
"Management needs to define their brand story and then deliver on it in an authentic way. This means from the board room to the back room."
"When the brand promise is regularly presented and then fulfilled by actions, trust can prevail beyond any CEO or other executive comments."

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16 Comments on "Consumers don’t trust what CEOs are saying"

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Mark Ryski
BrainTrust

Lack of faith in corporate leadership is hardly surprising. From VW’s emissions scandal to Tanaka airbags, to Wells Fargo and the Equifax debacle the media is littered with stories of corporate corruption and malfeasance that include CEOs spinning their version of the facts.

All businesses, including retailers and consumer brands, need to not only provide a “more authentic narrative,” they need to be more honest and ethical in their behaviors. Giving employees a louder voice is fine to bring a diversity to a message but if the general public simply doesn’t trust a CEO, then the company has a much bigger problem.

HY Louis
Guest
1 month 2 days ago

No, management needs to keep employees quiet or it may conflict with top management’s message. The CEO should also be careful or he can be held liable. Corporate communications is often a warm body quota filled job that can be the scapegoat. Rule of thumb, when discussing your employer publicly, pretend you live in North Korea.

Max Goldberg
BrainTrust

CEOs are increasingly out of touch with the general populace. Their earning levels put them in a class that has no basis in the every day reality of consumers and their employees. Consumers trust people who are — like themselves — employees. To counteract this, CEOs need to pay more than lip service to consumers’ concerns. They need to lead by example, to demonstrate some nexus point with consumers. They also need to encourage transparency within their companies. Consumers want realism and honesty from the companies they patronize.

Anne Howe
BrainTrust

As humans, we are hardwired to identify with, and therefore trust, people that we perceive to be “like us.” CEOs are so far removed from that perception, so we don’t trust them. Companies can and should have employees at all levels ready and able to share what the company is about and what it stands for. In this age of peer influence, CEOs who ignore this opportunity are unwise.

Art Suriano
BrainTrust

CEOs should be held accountable for many areas that they are not. And yes they should listen more to their employees, especially the ones at store level who can let them know better than anyone what their customers want.

Too many CEO’s today talk about delivering excellent customer service, but when it comes to investing in more staff and better training it falls on deaf ears. It’s hard to motivate employees who are struggling with low pay and challenged to get enough hours when they read about their CEOs taking home millions of dollars a year when we tell these same employees the company has to cut back. Today there is too much short-term thinking at the top based on how to please the stockholders before anyone else, and that is not healthy. What is most unfortunate is these retailers lose so much business because customers can’t find the item or someone to help them. Too many top leaders say they need to hire better people. The truth in most cases is they just need to hire more people and provide better training.

Lee Kent
BrainTrust

Management needs to define their brand story and then deliver on it in an authentic way. This means from the board room to the back room. The entire brand should sing the same song and deliver a genuine experience. And, as Mark said, if the public does not like the CEO, they have a bigger problem. For my 2 cents.

Ryan Mathews
BrainTrust

Almost 20 years ago now Fred Crawford and I addressed this very issue in our book, The Myth of Excellence. Our hypothesis was that in the face of the increasing failure of traditional institutions — churches, schools, political parties, etc. — to be seen by people as sources of values, a “values gap” had emerged. Our conclusions were that: people would begin looking to commercial institutions — companies and brands — in new ways, i.e., examining their values, ethics, etc. and that this gap also created an opportunity for businesses to demonstrate values-based practices … or else.

Since Myth was published the wealth gap in America has widened and corporate leaders are seen as being less and less in touch with their employees and their customers. I think shifting the responsibility for moral leadership off onto the employees is a convenient cop out. Consumers don’t distrust workers, they distrust big companies and people they may see as grossly overpaid executives. So it is the responsibility of the CEO, the rest of the leadership team and the boards of public companies to address tough issues and provide credible, authentic, values-based leadership in a way that bolsters consumer confidence.

Lyle Bunn (Ph.D. Hon)
BrainTrust

This is not so much a CEO trust issue but one more broadly reflective of the authenticity of the brand. When the brand promise is regularly presented and then fulfilled by actions, trust can prevail beyond any CEO or other executive comments. I recently sent a letter complimenting the service of an employee to the CEO of the Cineplex movie chain in Canada (with a cc to some others in the firm), who proclaimed that service members were their great strength. I later learned that the employee had been acknowledged for her contributions to the Cineplex mission, and a small pay increase had been granted. Did this affirm the brand, CEO and executive team to me? Sure did.

Mohamed Amer
BrainTrust

People trust who they identify with over entities and institutions. There has to be a face to a brand. That brand has to represent a set of values that resonate with its customers. CEO communication and behavior need to support and amplify those values. The rest of the organization needs to walk the talk in order for the “narrative” and behaviors to come through as authentic and not convenient or fabricated.

There will always be a gap in the trust factor between the top of the organization and the “regular” employees. It’s a function of how we identify and view others as “like us.” However, the gap need not be as great as reflected in the referenced study.

As to employee retail communications, it’s already happening with every interaction. Therefore, the corporate communication team needs to help line managers to view all employees as brand ambassadors. You want to have well-informed, happy employees that believe in your company values and the actions being taken. The trust you demonstrate to your employees reflects the trust your customers have in your brand, company and leaders.

Ian Percy
BrainTrust

I’ll start by “dittoing” Ryan’s comments. Heck, does anyone trust anyone these days? This article implies 66 percent of us don’t fully trust even family, friends and colleagues! This is almost the same as the pathetic employee engagement level. There’s a correlation there for sure.

Beyond that, I don’t think the approach described here would pass Research 101. Talk about leading the witness! “Now thinking more generally, in a time when more and more fake news is circulating about companies, what sources of information do you find most credible when sorting facts from fiction about a company?” Especially given the current and toxic political and cultural environment, the question should have started with “What sources … ”

Mind you these days it could have been made worse with: “In a time when many CEOs are fat balding misogynistic snakes who on a whim can make or break your career, who do you think is most likely to lie to you?”

Cathy Hotka
BrainTrust

I’ll agree completely. And what’s really galling to the average person is that the overt lies they’re being told don’t elicit any punishment. This is a huge problem for a democracy, and exceedingly damaging to consumer trust.

Ralph Jacobson
BrainTrust

Messaging has to at least seem to be genuine. Brands do well with line-level staff making the company pitches, as well as plain old customers. No one wants to hear from a CEO, except when there is a PR disaster that needs to be dealt with quickly.

Craig Sundstrom
Guest

I’m not sure I understand the premise of the question … or to be more precise, perhaps I should say I don’t think it makes much sense. People have greatly different interactions with these two groups; customers have day-to-day contact with employees on routine matters, while the general public (and sometimes customers, too) has sporadic and impersonal contact with management. And the latter is often in the form of “rah-rah” press releases or response to some crisis. By their very nature, these latter two interactions are likely to arouse suspicion(s).

Now, certainly, employees can be a gold mine of gossipy information, much of it ill-informed or not in the company’s best interest to be shared. I don’t think increasing the promulgation of either of these is something any responsible person would advocate. A company needs a strong and consistent voice, providing it is one of a CEO’s jobs … one of the main ones.

Ian Percy
BrainTrust

You are right re the CEO’s role as Chief Communicator, Craig. I’ve been advocating a full 30 percent of her/his time should be given to this. Unfortunately many, if not most, would barely break 5 percent.

Cristian Grossmann
BrainTrust

Both consumers and employees can easily detect when messaging has been diluted through a bottleneck of PR and legal constraints. In our current content marketing boom, galvanizing a cult of personality within your brand means leading with transparency and conviction and reminding employees that their voice is crucial to the team’s success.

The tricky part of encouraging employees to engage in the public discourse surrounding the retail industry is of course ensuring that the messaging stays on brand. Encouraging on-brand public discourse within a workforce involves three things:

  1. The CEO should make themselves available via email, office hours, or regular all-hands meetings to receive feedback and create dialogue;
  2. PR training should be a mandatory yet engaging part of the onboarding process;
  3. Employees who positively contribute to public discourse as a representative of the brand should be rewarded.
Janet Dorenkott
BrainTrust

Distrust in corporations? Sure, but I distrust polls and surveys even more. I think most people distrust surveys these days. Leading questions like this make it easy to distrust them. You need to look no further than our last election to see how leading questions skew results.

As far as giving employees a more vocal role, I think that can be done in a way that gives them the freedom to speak without harming the corporate message. After all, much of what molds the CEO’s direction, is information that is communicated up from the field.

wpDiscuz
Braintrust
"All businesses, including retailers and consumer brands, need to be more honest and ethical in their behaviors."
"Management needs to define their brand story and then deliver on it in an authentic way. This means from the board room to the back room."
"When the brand promise is regularly presented and then fulfilled by actions, trust can prevail beyond any CEO or other executive comments."

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