Trusted Professional

Study Quantifies Trust as a Multibillion-Dollar Asset That Can Be Easily Lost

pepi-stojanovski-509192-unsplash (2) in a recent report
"Trust incidents are becoming increasingly visible to the general public," said the report. "The heightened transparency inherent in our digital world means trust is a highly flammable, ever-present concern. Managing trust cannot be relegated to simply addressing individual incidents with public relations as necessary. Instead, companies need to intentionally create a culture that builds, maintains and preserves trust."

Trust, in the context of this report, is defined as a consistent experience of competence, integrity, honesty, transparency, commitment, purpose and familiarity. A "trust incident," meanwhile, is defined as any event or circumstance that results in the loss of real or perceived trust in a company. Trust is measured from the perspective of six stakeholder groups: employees, customers, suppliers, media, analysts and investors. 

After looking at 7,030 companies over 20 industries with more than 4 million data points, Accenture has concluded that 54 percent of companies experienced a material drop in trust, and this led to a conservatively estimated $180 billion in revenue losses. This was part of a larger scoring of these companies on Accenture's "Competitive Agility Index," which factors for growth, profitability and sustainability/trust. The report said that that this index "relies on publicly available data (including historical and future consensus data), as well as innovative sustainability and trust measurements. Accenture Strategy uses this data to calculate a score to help companies quantify their competitiveness." The paper's authors said that those companies that had a drop in trust saw their Competitive Agility Index scores decrease more than those that did not, meaning that "while trust accounts for a fraction of a company’s total score, it disproportionately impacts revenue and EBITDA." 

For example, the report pointed to an unnamed business-to-business company: After being named in money laundering allegations, revenue in the following year dropped by almost 34 percent or $1 billion, with EBITDA diving almost 61 percent, or by $700 million, an effect Accenture attributed to the loss of trust. 

Overall, the report said companies must take trust issues seriously. 

"Trust is the furthest thing from a 'soft' corporate issue," the report said. "It’s part of an interdependent strategy that significantly influences your bottom line and competitiveness. Knowing how much is at stake for your company—taking trust and your competitiveness to a forensic level—is becoming the new normal. Behaviors and actions must match stated values, in the eyes of all major stakeholders—employees, customers, suppliers, investors, media and analysts. As our research shows, mishandling trust can negatively and substantially impact growth and profitability."