Purpose Over Paycheck
Building Trust Among Employees
Trust is the foundation for building strong teams and strong companies. Trust is not a commodity that can be bought or sold. It is earned over time through actions, decisions, and interactions.”
Otsuka is well-established in the pharmaceutical industry, with a range of drug, nutritional supplement, and food and beverage products, and a solid commitment to sustainability. When the company reached a saturation point in Japan with Pocari Sweat, a beverage that replenishes the body’s fluids and electrolytes, it decided to move into the Indonesian market. This region is highly competitive—major players in the Indonesian beverage market include international conglomerates, but local brands also have a significant presence and are popular among consumers.
As a Japan-based company, Otsuka strives to be sensitive to the various cultures into which it distributes its products. Leadership in Tokyo became concerned when the local Indonesian Otsuka team planned the Pocari Sweat promotion to coincide with the end of Ramadan, a month-long observance in the Islamic faith that is a time of fasting, prayer, and reflection. The Indonesian team, well-attuned to the cultural nuances of their country, insisted that the promotion would be well-received. Otsuka executives in Japan decided to trust their Indonesian counterparts and agreed to support the promotion. The introduction of Pocari Sweat proved to be a significant success. Today, it remains one of Indonesia’s leading sports drink brands, widely available in supermarkets, convenience stores, and other retail outlets nationwide.
This story—and there are many like it—underscores the value that can be unlocked when consumer products organizations deliberately focus on building a foundation of trust with employees and teams, not just at home but throughout the regions where they operate.
Employees in the consumer products space are not that different from employees of companies in other industries. Many people today, especially the younger part of the workforce, are asking for more transparency from their leadership, increased recognition, more opportunities to participate, and more purpose or meaning in their careers.12 On the topic of trust, many organizations tend to apply this only to their consumers, customers, and society, but for consumer products companies trust is an intangible currency with employees as much as with any other stakeholder. In fact, unlike other industries, global companies such as Procter & Gamble, Reckitt, BASF, and many others provide a powerful platform for their employees because of their potential for real impact on the world around them.
Leaders in consumer products organizations need to always think about ways they can continue to sow and grow trust with their employees, many of whom bring highly specialized skills in a competitive employment landscape.
12. “6 Gen Z Traits You Need to Know to A ttract, Hire, and Retain Them,” LinkedIn, 2019.
The performance of a company that has trust is better because it improves communication, commitment, and productivity. When there is no trust between employees, or between employees and leadership, companies have to work much harder to achieve the same or lesser results.”
“Quiet quitting” refers to doing the minimum requirements of one’s job and putting in no more time, effort, or enthusiasm than absolutely necessary. It’s happening more than many think, especially in consumer products-related industries. While it’s impossible to measure quiet quitting, there is data on turnover. A 2021 survey by The Consumer Goods Forum found that the average annual employee turnover rate in the CPG industry was 17.6 percent. This statistic is much higher in the F&B industry since it includes restaurant employees. A 2021 report by Workstream, a hiring platform for the hourly workforce, found that the overall turnover rate in the food and beverage industry was 69.7 percent.
Where turnover was once a matter of “the cost of doing business,” employee loyalty becomes a currency of its own in the post-industrial age, where hard-won knowledge is often locked in the minds of employees. In a world where attracting, retaining, and building talent is harder than ever—and where employees’ voices have become amplified—consumer products leaders are asking questions like “How do we make sure our workforce feels valued and also aligned to our company values?” and “Are we providing our employees access to modern tools and training that keep them engaged, challenged, and productive?”
A recent study found that 75 percent of employees say they would stay longer with a company they trust.13 Statistics like this tell us just how much the world has changed since earlier eras. Employees today expect to have their voices heard, to be acknowledged for their contributions, and ultimately, to be respected in the new trust value chain.
Throughout 2020-2022, consumer products industries were significantly affected by the pandemic due to supply chain disruptions, changes in consumer demand, and government-imposed restrictions on retail operations. Many companies in the industry experienced significant declines in revenue and profits, which led to cost-cutting measures such as layoffs. Industries like CPG and F&B were more likely to implement layoffs and other cost-cutting measures than those in other industries. According to a survey of more than 800 organizations, 57 percent of consumer products companies had implemented cost-cutting measures in response to the pandemic, compared to 47 percent of companies across all industries.14
“It’s not about how you treat employees during the good times,” said Dan Jacob, President, ProAQTive. “It’s how you treat your employees during a downturn, like a pandemic. These moments of upheaval present the opportunity to earn trust with your employees.”
Not every company was—or is—in the position to take layoffs off the table in the midst of daunting economic realities. But larger global consumer products enterprises might do well to explore other cost-cutting measures as they endure storms. When the weather clears, it can prove expensive and time-consuming to recruit and train new talent. There are also optics. If employees have it in their minds that their employer’s first financial strategy is to cut staff, it erodes trust and takes years to regain it. Take Disney as an example. After announcing widespread layoffs in early 2023, to the shock of many, the company ran ads during the Super Bowl only weeks later—ads that cost, on average, $6.5 million per 30 seconds. Numerous outlets and voices widely criticized the company for the decision.
The pandemic was also instrumental in providing a novel opportunity for two-way trust between consumer products employees and their employers in the form of remote and hybrid work. Approximately 95 percent of companies in the Consumer Goods and Retail industry shifted to remote work during the pandemic.15 Many companies in these industries were able to adapt to remote work quickly, with the majority of employees working from home within two weeks of the initial COVID-19 lockdowns. The shift to remote work was facilitated by technology and digital tools, which allowed employees to collaborate, communicate, and access information from home. Even amidst fresh challenges of finding new ways to manage and coordinate supply chains, employees and employers were driven to develop a new level of trust for one another.
13. Edelman Trust Barometer: Trust in the Workplace, 2021. 14. “COVID-19: Implications for business,” McKinsey & Company, 2020. 15. “Consumer Sentiment and Behavior During the Coronavirus Crisis,” McKinsey and Company, 2020.
Within our own four walls: What today’s consumer products companies are doing to build trust with employees
“Trust with employees comes down to making sure that there’s a consistent message that’s crafted from the top down, so everyone is singing from the same hymn book,” said Sam Venugopal, Partner at PwC. “You have to go beyond slogans. It’s about creating and driving a consistent message that will percolate down to help drive that trust is paramount and that technology adoption that enables trust is critical.” This kind of clarity has historically been easier to achieve for smaller organizations and startups. It stands to reason that small-to-medium-sized businesses, with fewer leaders, employees, and messages to convey, would be better suited for crafting and pushing through one consistent message. But larger consumer products companies must change the way they operate in this regard to inspire employees.
In many ways, to thrive in a fast-changing world, these organizations need to embrace a startup mindset. This means cultivating a culture that fosters agility, innovation, and collaboration. A culture that breaks free from red tape and rigid rules and empowers each employee to shape their own path and contribute to a shared vision. In the article “The CPG CEO of The Future,” one CPG leader put it this way: “You have to inspire, motivate, and reward your people in ways that are meaningful to them, not in cookie-cutter ways that stifle their potential. That should be your top priority as a CEO because that’s what makes the difference.”
The best leaders build trust from the inside out. An organization that does not have the trust of its employees can never earn the trust of its customers.”
However, consumer products leaders should tread with some caution and not attempt to impose a culture from the top down. Culture should grow organically from the actions of leaders, not their words. “I have this dilemma, which is that I want to transform the culture, but I don’t want a culture transformation program. I believe that culture comes out of your deeds,” said Alan Jope, former CEO of Unilever.
Flatter and more agile organizations tend to be more successful compared to siloed, bureaucratic, and matrixed organizations. Large companies with executives distant from marketplace realities and consumers should break down their business into smaller teams to enable more direct collaboration and decision-making. Ideas can come from anywhere in the organization; consumer products companies should experiment with different ways of working, such as assembling people around problems based on talents and skills, to achieve tremendous focus and solve problems in a finite period.16
16. “The CPG CEO of The Future: Insight into the Transformation of CPG Leadership,” SpencerStuart, 2019. 17. “The Neuroscience of Trust Management behaviors that foster employee engagement,” Harvard Business Review.18. “The Correlation Between Employee Engagement and Performance,” LSA Global.
To establish and maintain trust, consumer products leaders are recognizing the importance of viewing employees not just as workers that contribute to the bottom line but as people who have families, life goals, and dreams. One study found that employees in high-trust organizations are more productive, have more energy at work, collaborate better with their colleagues, and stay with their employers longer than people working at low-trust companies. They also suffer less chronic stress and are happier with their lives, and these factors fuel stronger performance.17 Another study found “there is a positive correlation between employee engagement and performance: highly engaged workplaces grow 16.29 percent faster and have a 26 percent higher stock performance.” 18
Providing opportunities for career growth has become essential in industries like CPG and F&B. “It used to be that an employee was on a defined track,” said John Cooper of Veeva Systems. “Managers looked at performance, then moved on to the next year, rinse and repeat. Now there is more openness for employees to discuss possibilities with their managers, where they’re asking questions like ‘What do you enjoy?’ and ‘What would you like more exposure to?’” According to Cooper, one can look to the area of sustainability as evidence of this trend. A number of employees at CPG, F&B, and Specialty Chemicals companies are voluntarily moving into the sustainability space within their organizations as a way to find more meaning in their careers and to use their platform to make a positive difference.
To grow trust, many consumer products organizations are offering training and development programs, mentorship programs, and other opportunities for employees to develop their skills and advance their careers. For example, Unilever offers career development programs that help employees identify potential career paths within the company, provide skills training, and connect them with experienced mentors who can provide guidance and support. This builds trust with employees by demonstrating a commitment to their long-term growth and development. It helps create a sense of loyalty and engagement, which can lead to improved productivity and retention.
As we’ve seen, there are many actions consumer products leaders can take to build loyalty and trust among their workforces. We can think of these either at the enterprise level or the functional level. Here are some questions leaders might ask to assess how they are building trust at home.
Are we routinely hosting executive town halls where we’re sharing the company vision, strategy, business results, and employee engagement programs?
Are we establishing a consistent message across the organization so that all employees—no matter where they operate in the company—are aligned and bought in?
Are we engaging our teams (cross-functionally) as part of greater transformation initiatives?
Does our organization invest in a company intranet where employees can praise one another or share grievances?
Do we offer skills training, competency training programs, and career growth paths?
Does our organization offer financial advice and make financial planners available at no cost?
Are we giving employees the tools to make the best use of their time, freeing them from tedious manual work so they can focus on applying their expertise?
