Trust: Built on transparency
These days, trust seems to be in short supply. Public trust in governments has been on the decline, and some organizations aren’t too far behind. Yet trust has never been more essential – it’s the bond that underpins relationships, whether we’re talking about a partner, a friend, or a brand. As we adapt to our post-pandemic lives, it is trust that allows us to reconnect in authentic, meaningful, and enduring ways.
This chasm of trust between humans and others in our ecosystems presents both a threat to and an opportunity for organizations. My friend and colleague?Ashley Reichheld ?and I led research to understand the role of trust in times of uncertainty, and we found that trustworthy companies outperform their competitors by 2 ? times. We also learned that 88% of customers who “highly trust a brand” have bought from that brand again, and 62% buy exclusively from that brand.?
Trust has rightly captured many headlines and discussions over the past months. Recently,?David Brooks wrote about trust ?in The New York Times. He identifies several practices for leaders that align with our viewpoint:
-???????"Assume excellence. Within organizations, trust is usually built by leaders who create environments that encourage people to behave with integrity, competence, and benevolence." These organizations are equipped to perform with capability and reliability.?
-???????"Be more human. Our personal lives are no longer held separate from our professional lives, and we recognize that we can—and should—be able to bring our whole selves to work and be open about our emotions and other personal matters."?Humanity, or genuinely caring for the experience and well-being of others, is essential to trust.?
-???????"Maximize feasible vulnerability. Screw-ups are opportunities to build trust as long as you admit error and are clear about what you’re doing and what you’re doing to change."?Finding ways to resolve issues openly and agreeably makes brands more human.
However, our viewpoints diverge on the importance of transparency. Brooks advises:
-???????"Don’t overvalue transparency. There is a widespread perception that people will trust you if you make your organization’s operations more visible to outsiders. This is mostly false."
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We view transparency—defined as the belief that an organization openly shares information, motivation, and choices in plain language—as one of the four major drivers of trust, along with humanity, capability, and reliability. Organizations with a high transparency signal are recognized for their honest communications in marketing, unmistakable motives in financial actions, and straightforward language in how they address customer privacy and user data.?
To apply our research, we developed the?Human Experience (HX?) Trust ID , a simple four-part measurement of how much employees and customers trust a brand along four key dimensions: humanity, capability, reliability, and transparency.?
We found there is great value in transparency, especially when presented with appropriate intent and humanity. For example, customers are 2.8x more likely to continue purchasing from a brand with a high transparency signal even if a data breach occurs. Employees are 1.7 x more likely to be satisfied with their compensation when they believe their company is straightforward about financial performance.??Trust is the glue that holds relationships with customers, employees, and partners together. Being able to trust that a brand is open, honest, and forthcoming—even when it isn’t easy—helps strengthen our bond.
Transparency ranks high in importance in transportation and logistics and in food, beverage, and other consumer package goods. How a brand acts, its motivation for sharing information, and whether or not that information is presented with genuine concern for its impact on us as humans, is critical to earning and keeping our trust. Consider a flight that’s running two hours late; understanding that the delays are weather-related and knowing what to expect helps alleviate our impatience. Or a beverage company that tracks your location and pushes out coupons when you near a grocery store—it’s a little creepy unless you’ve chosen to opt-in to location notification.?
Trust is essential to building relationships, and transparency is one of its most important pillars, especially when it comes to earning loyalty. And as Brooks concludes, “Rebuilding trust isn’t about good intentions; it’s about concrete behaviors.” On that, we agree.
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