Conclusion
Transparency + Integrity = Trust
As we’ve seen in this report, for consumer products companies in the CPG, F&B, and Specialty Chemicals industries, trust is an implicit currency that can be defined in a variety of ways and that can be sown, grown, and measured in just as many. At its heart, trust is the willingness of one party (the trustor) to become vulnerable to another party (the trustee) on the presumption that the trustee will act in ways that benefit the trustor and vice-versa. Companies in these industries must move beyond gauging their success in purely financial terms and strongly consider and mightily invest in trust mechanisms across any and all parties that hold a stake in the success and perception of their brands and products: employees, suppliers, customers, consumers, and broader society.
While trust is an implicit currency, it’s not altogether disconnected from financial currency, and the stakes can be high. A recent Deloitte analysis found examples of three large global companies, each with a market cap of more than $10 billion, that lost 20 to 56 percent of their value—a total $70 billion loss—when they lost their stakeholders’ trust.41
At the end of the day, it might come down to a simple but hard-to-achieve equation: Trust is the product of transparency plus integrity. Transparency is about actively making truthful information widely available at every level, while integrity involves investing in critical trust systems and being deliberate about following through on commitments. In this careful calculation, technology can help to drive transparency and can also help to make integrity actionable in ways not possible before.
A recent Deloitte analysis found examples of three large global companies, each with a market cap of more than $10 billion, that lost 20 to 56 percent of their value—a total $70 billion loss—when they lost their stakeholders’ trust.
41. “Can you measure trust within your organization?” Deloitte, 2022.
For today’s consumer products leaders, it might be easy to view all of these new developments as punitive. After all, these companies operated largely out of the public eye for decades, using financial success as their only metric. Increasing scrutiny from regulators and an expansion of stakeholders and their active participation could certainly be seen as a burden. But moving toward a trust-based economy actually presents a historic opportunity for these companies.
Today, with an authentic approach and the right tools, consumer products organizations can reach unprecedented levels of proximity and intimacy with all stakeholders, which leads to richer conversations, better learnings, improved innovation, and ultimately, to generating more revenue without compromising on compliance or quality.
When it comes to maintaining and growing trust, there is no “one-size-fits-all” solution for consumer products companies. Each organization needs to determine where to place its investments depending on which stakeholders are most important, and these investments may shift over time. However, there are some tangible things leadership can do to build an intangible currency:
It’s not what you say, it’s how you act.
For the C-suite, every small step you can take to position yourself as being communicative and transparent with all stakeholders—shareholders, employees, suppliers, and customers—will serve you well, and over time it will be known that you’re doing right by broader society.
Keep your word.
Be able to back your claims since consumers are scrutinizing these and third-party certifications to make sure that products and brands align to their values, whether that means organic, Halal, free from parabens, and more.
Decide where to invest.
If your focus is on maintaining trust in the employee marketplace, you will make commitments to recruiting, training, skilling, benefits, compensation, and avoiding layoffs at all costs; it’s a loss of trust among employees if this is violated. If focusing on consumer trust, you might invest in pricing transparency and communicating why a price is increasing or reducing prices where possible.
Remain in good standing with the law.
Trust also plays out in the world of compliance and regulatory, where governments are driving best practices and passing legislation that directly affects the consumer goods value chain. You don’t want news coming out about being constantly audited or fined because you haven’t fulfilled your regulatory obligations—that’s now in the mind of all the stakeholders. And it’s not just about the fines but about avoiding media exposure for violating trust.
Learn from your mistakes.
If a crisis does occur, it’s an opportunity to systematize so it doesn’t happen again.
Trust in trust as an implicit currency.
A currency is something you spend. Like all sound investments, you get it back with gains through earned media that comes from social media forums, blogs, press, consumer conversations, and throughout the greater trust value chain of stakeholders.
By implementing these strategies, consumer products companies can foster a culture of transparency and trust, which can have a positive impact on employee morale, customer loyalty, and overall business success.
