How frequent, honest communication translates to trust in corporations and leadership

2009 Edelman Trust Barometer Executive Summary
“An adherence to transparency is at the core of each of Public Engagement’s pillars. Organizations must be forthright and honest in their actions and communications. When problems arise within companies, stakeholders need to see senior executives take a visible lead in acknowledging errors, correcting mistakes, and working with employees to avoid similar problems going forward. The essence of Public Engagement is the commitment of companies to say—and do as they say. In a time of utter distrust, business leaders must make the case for actions and then demonstrate their progress against those goals.”

Email from Dr. Terrence Flynn APR, FCPRS, to members of the Canadian Public Relations Society (May 13, 2009)
“[CPRS is presenting a webinar] with Lynda Kuhn, senior vice president, communications and consumer affairs, Maple Leaf Foods, Leadership in Difficult Times: The Listeriosis Outbreak. Over the last nine months, Lynda and her communication team have strategically guided Maple Leaf Foods through one of Canada’s most difficult product recalls. From the first sign of difficulty in mid-August last year, through to the resolution of the class action lawsuit in December 2008, Maple Leaf Foods has transformed crisis communications and set a new benchmark for companies responding to future crisis situations.

Lynda will share her personal experiences and “lessons learned,” and provide a context and perspective on the company’s strategy and tactics. I will also provide data from four national surveys that I conducted in conjunction with Leger Marketing, looking at how Canadians responded to Maple Leaf Foods’ communication and how those efforts safeguarded its corporate reputation during those difficult times. Please join us on May 21st and hear why the Maple Leaf Foods case study is the new ‘gold standard’ for crisis communications.”

Maple Leaf Foods and Public Trust

Through much of the second half of 2008, a company that held the attention of Canadians and our various media was Maple Leaf Foods, a leading food processing company that is headquartered in Toronto, Canada. Employing approximately 24,000 people at its operations across Canada and in the United States, United Kingdom and Asia, it had sales of $5.2 billion in 2008.

The cause of the attention was an outbreak of Listeria in Maple Leaf Foods’ processed meats division. Its history (including a detailing of the number of deaths and those who became ill, the government’s existing regulatory involvement and its recent hearings, plus the eventual settlement of a class action lawsuit by Maple Leaf Foods) is well documented.

Also monitored and commented upon by many Canadians (in print, radio and digital media) was Maple Leaf Foods’ response to all of the events, particularly the public face of its president and CEO, Michael McCain, who from the onset accepted responsibility and accountability, providing frequent and ample communication updates to the voracious media, government, consumers and other publics.

Behind the scenes was Maple Leaf Foods’ (relatively small) corporate communications staff, who worked with Mr. McCain to focus on facts and public education, and to provide clear and candid communication through multiple platforms.

Many of us in the public relations realm—recognizing how incredibly difficult and challenging were the circumstances of the listeriosis outbreak and its consequences—were impressed with the transparency of the corporate response, in particular in its communication management.

It was back in the fall of 2008 that, as a member of the CPRS national professional development committee, I began to lobby my industry colleague and friend, Jeanette Jones, ABC, vice president of communications for Maple Leaf Foods, about the possibility of Maple Leaf Foods’ corporate communications department sharing “lessons learned” with CPRS members (and other corporate communicators) through a webinar. I offer my sincere thanks to Jeanette for facilitating the request and, in particular, to Lynda Kuhn for agreeing to present a webinar for the benefit of colleagues in the profession. (The live version of the webinar is scheduled for May 21st, but individuals can register to access the archived version for up to one year.)

2009 Edelman Trust Barometer, Canada Findings

I had already obtained a commitment for the webinar when I attended a February presentation in Toronto by Richard Edelman, where he detailed the “Canada Findings” of the 2009 Edelman Trust Barometer.

Given the 2009 findings on trust in Canada, what struck me during the presentation (and afterwards when poring over the documents) was how Maple Leaf Foods has managed to inspire continued trust (with the majority of Canadians) in its products and corporate reputation. (Results born out by the research being conducted by Dr. Terry Flynn, APR, FCPRS, in conjunction with Leger Marketing.) This trust awarded to Maple Leaf Foods is in spite of the growing distrust by Canadian (echoed globally) of corporations, their CEOs and, in general, corporate communications efforts. For example, corporate communications, such as news releases and reports, are only trusted by 28 per cent of Canadians; live communications, such as a speech or interview from an executive, are only trusted by 24 per cent; a company’s website 15 per cent; and corporate or product advertising 9 per cent.

It is equally telling that the 2009 Edelman Trust Barometer found, “The most important reputation attribute in Canada is ‘frequent, honest communication.’ Higher than the global average of 91 per cent, Canadians desire organizations that, ‘communicates frequently and honestly on the state of its business’ (97 per cent).”

It is my belief that it is this commitment to communication, which really speaks to its corporate values, that has differentiated Maple Leaf Foods from the average company in its crisis communications management and ongoing trust by the Canadian public. Earlier this year Maple Leaf Foods also introduced its first blog, Our Journey to Food Safety Leadership.

Maple Leaf Foods commitment to communication, to being a organizational leader in the highest possible food production standards and internal regulations, and to public education, is for the long term.

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Below is a summary of pertinent information on Trust in Canada, drawn directly from Richard Edelman’s presentation slides, as well as the Executive Summary of the 2009 Edelman Trust Barometer, which Edelman Canada distributed to attendees.

2009 Edelman Trust Barometer, Canada Findings

Globally, Trust is Down 2 per cent (from 51 to 49 per cent). Countries where Trust is down more than 5 per cent include the United States (down 20 per cent), Italy (down 14 per cent), Mexico (down 10 per cent), Spain (down 9 per cent), India (down 9 per cent) and Ireland (down 6 per cent).

Canada is classified as Trust Steady, although the percentage did dip by 4 per cent (from 49 to 45 per cent). Other Trust Steady countries include Germany (down 2 per cent), France (down 1 per cent), UK (no change), Poland (up 2 per cent), Japan (up 2 per cent), South Korea (up 2 per cent) and Russia (up 3 per cent). Trust is up in the Netherlands, Brazil, Sweden and China. New to the Edelman Trust Barometer mix is Australia and Indonesia.

Trust in government increased in Canada, from 39 per cent in 2008, to 51 per cent in 2009 (for a gain of 12 per cent). Other countries where trust in government rose included the UK, Germany, Netherlands, Poland and Brazil. (Four countries trust was down, eight countries trust was steady. Globally, trust is up by 1 per cent.)

Canadians trust their government more than business and are joined in this sentiment by Germany, Italy, France, China, Netherlands and Australia. In the other 13 countries included in the survey, business is trusted more than government.

Industry sectors most trusted in Canada:
(Also indicated: Global/US Percentages)

1. Technology 67% (76/73)
2. Biotech/life sciences 57% (66/62)
3. Health care sector 59% (57/42)
4. Food 54% (55/58)
5. Banks 53% (45/36)

Although in most cases the trust is lower than the global or US percentage, Canadians have more trust in their health care sector (59 per cent vs. Global 57 per cent and US 42 per cent) and banks (53 per cent vs. Global 45 per cent and US 36 per cent).

Companies headquartered in Sweden (73 per cent), Germany (74 per cent) and Canada (74 per cent) remain the most trusted.

Trust of Institutions in Canada

Since 2007, trust in government and media has increased over two years, and trust in business and NGOs has remained steady. (In the US, by comparison, trust in all institutions fell.)

By a 3:1 margin, globally and in Canada, informed publics agree that government should impose stricter regulations and greater control over business across all industries. Canada’s “agreement” level, at 70 per cent, was actually higher than the Global aggregate of 65 per cent.

Canada’s Top Five Most Trusted Information Sources

Traditional Information Sources
1. Stock or industry analyst reports 52%
2. Articles in business magazines 50%
3. Conversations with your friends and peers 42%
4. Conversations with company employees 41%
5. Television news coverage 40%

Trust Levels in Other Avenues

Corporate
– Corporate communications such as news releases, reports 28%
– Live communications such as a speech or interview from an executive 24%
– A company’s own website 15%
– Corporate or product advertising 9%

Digital
– Internet search engines e.g., Google news, Yahoo news 33%
– Free content sources, such as Wikipedia or web portals 29%
– Business blogs 18%
– Personal or non-business blogs or bulletin boards 16%
– Social networking sites such as MySpace or Facebook 9%

Experts, Peers and Employees Top 2009 List of Credible Sources in Canada
(Combination of Above Categories)
– Stock or industry analyst reports 52%
– Articles in business magazines 50%
– Conversations with your friends and peers 42%
– Conversations with company employees 41%
– Television news coverage 40%
– Articles in newspapers 39%
– News coverage on the radio 37%
– Internet search engines e.g., Google news, Yahoo news 33%
– Free content sources, such as Wikipedia or web portals 29%
– Corporate communications such as news releases, reports 28%
– Live communications such as a speech or interview from an executive 24%
– Business blogs 18%
– Personal or non-business blogs or bulletin boards 16%
– A company’s own website 15%
– Corporate or product advertising 9%
– Social networking sites such as MySpace or Facebook 9%

Perceived credibility of corporate channels is relatively low; “conversations with employees” was deemed the most credible source. (Corporate/product advertising lost credibility.)

“Conversations with company employees” was introduced in this 10th Trust Barometer report. It scored a significant 41 per cent in Canada.

Also new was “live communication such as a speech or interview from a company’s senior management,” which weighed in relatively low at 24 per cent.

Corporate communications did not score very highly in general, although news releases, reports and emails did rise by 3 per cent to 28 per cent. Down, fairly significantly, was perceived trust in a company’s website (22 to 15 per cent) and especially, corporate or product advertising (dropping 11 percentage points to only 9 per cent credibility).

From a corporate perspective, perceived credibility of digital channels remains low. Business blogs (new this year) scored 18 per cent. By contrast, free content sources (such as Wikipedia or web portals) were down 8 per cent (37 to 29 per cent). Newly tracked “Internet search engines” was slightly higher, at 33 per cent.

Most Credible Spokespeople

Canadians look to third-party subject experts as the most credible spokespeople. An academic or expert on that company’s industry or issues actually rose by 14 per cent (from 57 to 71 per cent). Financial or industry analysts held steady at 57 per cent. Non-profit organization or NGO representatives rose by 1 per cent (51 to 52 per cent).

A person “like me” dropped from 56 to 49 per cent. Government official or regulator held steady at 37 per cent. Also dropping in credibility was a regular employee of a company (44 to 35 percent).

Although the percentage drop was only by 3 per cent, the credibility of CEOs of companies fell to 27 per cent.

Informed publics need information from multiple sources, by multiple voices. And, on average, they need to hear it three to five times to believe a key message. (This was the largest aggregate number, at 58 per cent. 24 per cent wanted to hear a message four to five times.)

Frequent, honest communication most important reputation attribute in Canada

The most important reputation attribute in Canada is “frequent, honest communication.” Higher than the global average of 91 per cent, Canadians desire organizations that “communicates frequently and honestly on the state of its business” (97 per cent).

Canadian Corporate Attributes and Values that Gain Trust
(Indicated: Canada/Global Percentages)

– Communicates frequently and honestly on the state of its business 97% / 91%
– Is a company that treats its employees well 96% / 93%
– Offers high quality products or services 95% / 94%
– Stays within the spirit and letter of the law in [country] 95% / 90%
– Is a company I trust 94% / 91%
– Gives value for money 92% / 91%
– Commits time, money and resources to the great public good 92% / 85%
– Has senior leadership that can be trusted 91% / 89%
– Has a strong commitment to protect the environment 91% / 87%
– Has a strong financial future 90% / 90%
– Creates and keeps jobs in your area 88% / 86%
– Is an innovator of new products, services or ideas 87% / 87%

Impact of Lack of Trust in a Company

If a company isn’t trusted, 89 per cent of Canadians polled claimed they would refuse to buy their products/services (Global 77 per cent). If the company is trusted, 93 per cent are more likely to buy their products/services (Global 91 per cent). Criticism is also more likely (85 per cent Canada, 72 per cent Global), as is a recommendation (86 per cent Canada, 76 per cent Global).

Although Canadians have a higher percentage of sharing a negative opinion online (45 per cent/34 per cent), they are also even more likely to highlight a positive experience (48 per cent versus 42 per cent). Buying and selling of company shares is also impacted by trust, although more negligibly (32 and 26 per cent versus 20 and 17 per cent).

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Thank you to Katie Clark, senior account director, Edelman Canada, for providing me with Richard Edelman’s PowerPoint Presentation from the February 25, 2009 on “Canada Findings.” Also to Jennifer Hildebrand, manager, special events and communications, Rotman School of Management, University of Toronto, for facilitating my attendance at the event.