This article provides a 6-step procedure for measuring and evaluating the trust that constituencies hold in an organization. (You’ll find Katie Paine’s Trust Measurement Checklist a convenient way to organize your trust measurement project.) First, let’s examine some theories of trust, and how it fits into relationships in general.
We need to look no further than Chipotle’s plummeting sales to know that trust, or lack thereof, has a measurable effect on the financial health of any organization. Thanks to the economic collapse of 2008, people trust corporations less than at almost any other time in our history. Thus, when trust helps an organization build relationships with key constituencies, it saves that organization money by reducing the costs of litigation, regulation, legislation, pressure campaigns, boycotts, or lost revenue that result from bad relationships.
A high level of trust helps cultivate relationships with donors, consumers, investors, and legislators who are needed to support organizational goals. When employees trust their employer they are more likely to support the mission of the organization and be satisfied with their jobs. Lower employee turnover has a direct impact on the bottom line. Trust from the financial community is critical to an organization’s access to capital and therefore its ability to grow. Good relationships with the media can often avert a crisis.
The essential transparency of social media has also helped redefine the importance and relevance of trust in today’s marketplace. If you are doing something wrong, bad, or hurtful (or simply perceived to be), chances are that someone will report it somewhere in social media. If you’re lucky, it won’t be photographed or end up on YouTube. If your stakeholders have a high degree of trust in your organization, chances are good they’ll come to your defense and what could have been a devastating scandal may be forgiven in a day or two.
Even though examples such as these make it clear that trust is important, few organizations actually measure the trust that their constituencies have in them because they either don’t know how, or think they can’t afford it. With this article, those excuses go out the window.
What is Trust?