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Global Branding: The Edelman Trust Barometer

At the beginning of this year, the Edelman Trust Barometer assessed the impact on trust of a company’s national origin, industry sector, behaviors and communications policies.

[Ironic, isn’t it, that Edelman itself lost credibility this year when it was revealed that they were behind the fake Wal-Mart blogs… details here>> ]

The findings, which were presented at the World Economic Forum in Davos, included:

Opinion leaders in Europe apply a significant “trust discount” for major U.S. brands, such as Coca-Cola (U.S.= 65% vs. Europe= 41%); McDonalds (51% vs. 30%); P&G (70% vs. 44%); and UPS (84% vs. 53%). There is no “trust discount” for non-American global brands operating in the U.S. or any other market (e.g. Sony = 74% in Japan, and 79% in the U.S.), with the exception of Japanese brands in China.

Western based companies continue to make big strides in winning trust in the Chinese market. Big gainers this year included Citigroup, Procter & Gamble, Shell, Unilever and UPS, all now rated trustworthy by more than 75% of Chinese respondents, and up from under 50% two years ago.

German and Canadian companies are highly regarded by more than 70% of opinion leaders in every market surveyed. Less than 40% of opinion leaders expressed trust in global companies headquartered in emerging markets such as China and India, as well as in Korea. Such companies face particular trust deficits when seeking to buy companies in overseas markets.

Companies in the technology and retail sectors are the most trusted, while energy and media-entertainment are the least-trusted industries. Pharmaceutical concerns face considerable skepticism in the U.S. and Germany, while financial firms fare much better in the U.S. and Asia than in Europe.

Television is the big loser in media trustworthiness with the rise of the Internet. When asked where they turn first for trustworthy information, 29% of respondents in the U.S. still cite TV first, down from 39% three years ago. The Internet is now cited by 19%, up from 10% in 2003. The same trend is evident in the U.K., where television has declined from 42% to 33% as respondents’ first choice, while the Internet has risen from 5% to 15%. Newspapers, which are often thought to be the most serious casualty of the Internet wave, show rankings essentially unchanged in most markets at approximately 20%. Newspapers remain the first trusted medium of choice for respondents in France, Germany, Japan, Brazil, Korea, and Italy.

“Articles in business magazines” is the most credible source of information about a company (US = 66%, Canada = 53%; Brazil = 75% Europe = 60%), followed closely by “friends and family,” which has grown very strongly in the U.S. (‘03=35% vs. ’06=58%); Brazil (‘04=66 vs. ‘06=73%) and Canada (‘05=43% vs. ‘06=58%).

Trust has important bottom-line consequences. In most markets, more than 80% say they would refuse to buy goods or services from a company they do not trust, and more than 70% will “criticize them to people they know,” with one-third sharing their opinions and experiences of a distrusted company on the Web.

Trust in institutions overall is lowest in Germany and France, and highest in China, Brazil and the U.S. Business was trusted by only 33% of respondents in Germany, and only 28% in France, vs. 45% in Spain, 51% in Italy and 53% in the U.K. (Comparable figures for the U.S. and China are 49% and 56%, respectively.) Government is the least-trusted institution in Brazil, Spain, Germany, and South Korea, and remains low in the U.S. (38%), UK (33%), France (32%), and Canada (36%). It has increased in China (83%, up from 63% in ’05) and Japan (66%, up from 43% in ’05). Trust in media is low across all countries except for China (73%) and South Korea (49%).

Trust in Non-Governmental Organizations (NGOs), which have consistently been the most-trusted institution in Europe during the six years that the survey has been conducted, has steadily increased in the U.S. (‘01=36%, ’06=54%); and increased significantly in the last 12 months in Canada (’05=45%, ‘06=57%) and Japan (’05=43%, ’06=66%). Despite the survey asking for only trusted global companies, many respondents volunteered NGOs such as the Red Cross in France and the UK and Greenpeace in Germany were also frequently mentioned. NGOs are now the most-trusted institution in every market except Japan and Brazil. The widespread rise in trust of NGOs has now extended to Asia, especially in China, where ratings went from 36% to 60% in last 12 months.

So what will the Trust Barometer tell us in 2007? Stay tuned!

Add comment December 20th, 2006

Doug Smith: Cross Cultural Teams

Teaming is one of the two disciplines for achieving performance in small groups.

In addition to keeping groups small, the team discipline revolves around needed skills, shared sense of purpose, goals and how to get along and work together, and mutual accountability — all of which make these findings from Grovewell must reading for folks in cross cultural teams.

We are all human — we bring with us beliefs and behaviors that reflect ‘how we do things around here’. Increasingly, more and more of us absorb and practice such values in organizations.

Still, the forces of national and ethnic culture remain the starting point because of family, because we ‘grow up’ in contexts heavily influenced by those cultural dimensions. The shift from place to organization going on around the globe holds both promise and peril — but surely one potential advantage comes from blending the best of various cultures into ‘how we do things around here’ in our organizations. Teams are powerful crucibles for making this happen because they are small thick we’s with an orientation toward performance — toward some objective purpose that brings us together meaningfully.

As the Grovewell research shows, achieving performance requires small cross-cultural groups using the team discipline to grapple with how to get the best from values that are seemingly at odds, such as:

1. Individualism versus group orientation
2. Hierarchical versus democratic distribution of power
3. Content-focused versus context-focused communication style
4. Formality versus informality
5. Punctuality versus flexible sense of time
6. Task and goal orientation versus relationship orientation
7. Deductive versus inductive reasoning
8. Holistic versus linear thinking
9. Confrontation versus diplomacy/face-saving
10. Short-term versus long-term viewpoint
11. Competition versus cooperation
12. Loyalty to particular people versus obedience to universal rules
13. Self-determination versus acceptance of fate/circumstance
14. Religious versus secular worldview
15. Permissiveness versus strict rules/regulations
16. Pragmatic flexibility versus adherence to detailed plans
17. Achieved versus ascribed status
18. Change as positive versus tradition as revered
19. Youth orientation versus age veneration
20. Male dominance versus gender equality
21. Rigid class structure versus social mobility
22. Action/doing versus contentment with being

Much turns on the attitudes with which these questions are approached, especially how best to respect differences while finding a shared path to performance that matters.

Folks who jump straight to ‘good versus bad’ step into unpromising territory.

In contrast, those who take the time and make the effort to understand nonjudgementally will build the initial respect and trust required for more difficult choices about the best path to performance.

The Grovewell piece speaks specifically to cross-cultural teams. Over thirty years of experience with small groups, however, suggests to me that several of the items listed apply just as much to folks coming from different organizational cultures (e.g. in a post-merger integration team) and different functional/expertise cultures (e.g. marketing versus engineering).

Add comment December 20th, 2006

Posts filed under 'Leadership'

Global Branding: The Edelman Trust Barometer

Doug Smith: Cross Cultural Teams

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