Richard Edelman is a guy who walks the talk.
He’s a recognized authority on trust in business, media and government. In 2014, Glassdoor named him the third highest-rated CEO.
Edelman recently sat down with YPO CEO Scott Mordell in Davos to talk about trust.
Trust plays a big part in what Edelman Worldwide does every day, representing major brands like Dove, REI, Heineken, HP, Adobe, Johnson & Johnson, and PayPal. The 2020 Edelman Trust Barometer – now celebrating its 20th year – was recently released. And according to Edelman, it revealed that despite a “strong global economy and near full employment, none of the four societal institutions that the study measures — government, business, NGOs and media — is trusted. The cause of this paradox can be found in people’s fears about the future and their role in it, which is a wake-up call for our institutions to embrace a new way of effectively building trust: balancing competence with ethical behavior.” Behavior is huge, Edelman says. He also says, “92% told us ‘I expect my CEO to speak up on issues of the day.’ Trust is local. ‘The most trusted institution in the world is my employer.’” This means taking head-on critical issues like diversity, LGBTQ, sustainability, data protection and gun control. It can start small because little things become something bigger – a deeper trust of the company or organization you’re working with and its leaders. Maybe begin with doing away with plastic bottles at work. This may seem like no big deal, but “sustainability is urgent,” Edelman says. “[These are] things that we can do that aren’t a great sacrifice. Each of us should make a difference.” Edelman says, for the first time, business is the most trusted institution, just slightly ahead of NGOs. This is significant because business now is in a position to “do the right thing,” he says. What does that mean? Edelman breaks it down: It means transparency, sustainability, how you treat your employees, and whether you’re involved in improving society. He puts this into practice at his own company. For example, every time he visits an office to do a town hall, he asks a simple question of the audience: Who’s a smoker? There’s usually a show of hands. Then Edelman follows up with a simple deal: “If you come up here right now and shake my hand, I will give you $2,000 to quit smoking. You have to promise to quit, and you have to stop smoking forever, otherwise you owe me the $2,000 back.” So far, 125 Edelman employees have quit smoking through this pact. And when there’s a national tragedy, Edelman takes action. For instance, after the August 2019 mass shooting at a Walmart in El Paso, Texas, Edelman pledged USD1 million of PR time to the Gun Safety Alliance. He invited employees to join him in this pro bono work, offering to pay for their time. Seventy people joined him. An inspired workforce does better things for the planet. “The motivation for business is employees,” Edelman says. “Three-quarters of them say, ‘I want to work for a company where I feel like I can change society. I want to be listened to. I want to be empowered. I want you to stand up for me.’ This is also important for customers – ‘I only buy brands if they stand up for me.’” Edelman says, “fears are eclipsing hope.” When you think about the buoyancy of the economy, it may feel safe to assume trust is going up. This especially is true in developing markets – a good economy leads to happy, trusting people. Unfortunately, according to Edelman, this is broken in the U.S. and other Western markets. The solution? “The key is income equality,” he says. The top fear according to the Edelman Barometer is job loss because of technology. Eighty-three percent of individuals are afraid of gig economy automation or outsourcing. So what can business do to turn things around? Retrain your employees. “People are expecting us to help them,” Edelman says. “We have people who are convinced they’re going to be out of work, so we have to help them be competitive. That’s the mandate. We also have to pay them better.” Eighty percent of folks surveyed in the trust barometer said they expect business to pay better wages. Edelman says he’s had many discussions with clients who say they can’t raise the base pay because it would disrupt the company’s margin. He doesn’t buy it. “I see disruptor brands coming in at a higher price with a sense of sustainability or mission and returning some of that money to a cause, and they’re selling like crazy,” he says. And what about trust with regard to family business? The good news is that family businesses are 20 points more trusted than business in general. Edelman is making his best effort to include his three daughters when it comes to planning the future of Edelman Worldwide. He talks with them about his work, shows them what he does for a living, and invites them to board meetings. “It’s going to be in their hands,” he says. “I’ve told them, ‘Look, you may be owners and managers. It’s up to you, and it’s up to me. I want you to be qualified.’” Following a leader like Edelman may be easier said than done. But he spells out a few keys that CEOs may take to heart: For example, consider the growth of “Giving Tuesday.” This used to just be an idea to raise money for charities, but it’s become a movement. Why? “It’s horizontal; it’s not controlled,” Edelman says. “It is entrepreneurial. I think there’s real genius in letting go, as opposed to [controlling] your people too much.” Discover more insights from the YPO Hub in Davos 2020: 
Do the right thing
Trust in leadership: where is business falling short?
The family business
Key takeaways
