To get first-hand insights into the challenges of trust communications, we turned to members of the European Association of Communication Directors working in the crisis-prone fields of media, pharma, politics and the auto industry.
One ongoing news story is inescapable from any discussion of trust in business. Since reports of manipulated emission results first found their way into the news headlines, the VW scandal has dominated the business headlines. But how has this story affected overall trust in the auto industry? To what extent has a crisis focussed on one particular company effected the competition? We asked Michael Baumann, executive director, communications and public affairs at Ford of Europe and a member of the EACD since July 2015, for his insights:
What was Ford communications’ immediate reaction to the VW scandal?
It was of utmost importance to quickly communicate to both the internal and external audiences and stakeholders clarifying that Ford did not have any so-called “defeat devices” and that our vehicles meet all applicable emissions requirements. The message came directly from our European president and CEO, Jim Farley, and stressed the importance of integrity to the company and that we foster a culture of openness and have well established internal processes to raise red flags at Ford. Providing information in a transparent and quick and robust manner helped to protect our brand and corporate reputation.
What kind of long-term challenges does the auto industry face in the wake of the emissions scandal?
Trust is built over the long term but can be lost very quickly. Without doubt, customer trust of the entire industry has been damaged. The challenge is to move from a defensive position and into a more pro-active communication situation aimed at rebuilding trust – and not at the cost of a competitor, but certainly distancing ourselves from any illegal or disreputable behaviour. For example, making it much better known that Ford fully supports efforts to ensure that test procedures more closely match the real-world conditions that customers experience under normal driving, and we have supported the development of a European Real Driving Emissions initiative going into law as part of the Euro 6 standards.
How can that trust be rebuilt?
The public discussion has been – for good reason – quite emotional. But now we need to return to a more open and rational debate about the societal goals and challenges and opportunities posed for the auto industry. We need a fact-driven discussion. The auto industry needs to create an understanding about the competing demands placed on the industry. For example, the need to reduce CO2 emissions, to improve air quality, and to enhance safety often have contradictory implications for each other – there is no simple “silver bullet” cure that takes into account all of these often competing interests. Such a discussion needs to include all societal stakeholders.
Another industry that seems inseparable from the issue of trust is the pharmaceutical, where alarmist stories often set off panic among consumers. Last year, when Martin Shkreli became infamous for raising the price of Daraprim overnight by 5,000 per cent, the backlash had as much to do with general misturst of pharma companies. We asked Nicole Gorfer, head of external communications for the Roche Group and an EACD member since 2008, for her take on the impact of stories such as these on trust in her indus
A recent pharma-related news story to hit the headlines was the coverage of the price hike in medicines by Martin Shkreli. Did that generate a lot of negative feeling about the wider Pharma industry?
This is a perfect example of how misbehaviour of one opportunistic market player crashes trust levels for the whole industry – up to the point where Hillary Clinton states the pharmaceutical industry as her enemy she is most proud of. Shkreli’s defiantly boosting the price of a lifesaving 60 year old medicine he just bought by over 5000 per cent over night provoked a public outcry and kicked-off a debate on embarrassing drug pricing in the US, the pharmaceutical industry’s most important market where innovation premiums in pricing are still granted. For research based companies, this meant pressure in big markets to more actively engage with politics via industry associations and also media, being pushed for more transparency on their drug pricing and value delivered to eventually differentiate from unethical marketing practices. The debate is still ongoing and how the industry is able to tackle that will actually be instrumental for a sustainable R&D pharma business model.
How do you monitor trust levels in your industry and your company?
Traditionally, pharma companies don’t have a good image in Europe when you ask the general public. It therefore comes as no surprise looking at trust indicators such as the Edelman Trust Barometer to see we face trust issues. Does that harm our business per se? Not necessarily, as this picture completely changes when you, for example, ask patients who are desperately looking to take part in one of your clinical studies, whom your products have already helped or even cured. We get a lot of encouraging feedback; this makes me proud and confirms we do make an impact on patients’ lives. And people do believe in our ability to transform treatment journeys as well as quality of life. So it’s a question of which relationships you’re looking at as a meaningful indicator for trust levels. Another example are partnerships – at Roche, we license-in about a third of our research from external sources – be it from start-ups, biotechs, etc. We would really encounter a business problem if low trust levels hindered us from partnering deals.
What kind of conversations go on within your industry about the fight to hold onto the trust of your publics?
Transparency on how we do business is one important step to building trust, but in the end, we are measured by what we deliver and how ethically compliant we act as an industry. That’s crucial as our R&D business model depends on the ability to price premiums in certain markets. It’s our motives that are mostly doubted in public, not the medicines or their quality – and one company’s ethical misbehaviour is enough to confirm the public notion of “I knew it! They all can’t be trusted!” History clearly demonstrates that. So it’s about joint efforts to be more open on how we work in a competitive and highly regulated environment.
If industry-specific scandals such as the VW emission scandal or the prevalence of fake medicines have important repercussions on the trust tells of the relevant industries, the big stories that affect us all – the refugee crisis, terrorist attacks, the ongoing aftershocks of the economic crisis, socio-economic upheavals and geo-political turmoil has no less significant and immediate impact on the degree to which governments and political parties are trusted, as Utta Tuttlies, head of press and communications /spokesperson at the Progressive Alliance of Socialists and Democrats (S&D Group) and also an EACD member since 2008, explains.
What are the biggest challenges facing trust in European politics in 2016?
At a time when we face various crises simultaneously, the biggest challenge is to regain trust of citizens in the functioning of political systems and in politicians. This accounts particularly for the EU and European politicians, who are under threat from various far left and far right movements. The ability to gain trust depends directly on the ability of delivering solutions for people, who are in these times often scared and insecure. Thus, good proposals, convincing arguments and effective implementation of promised actions.
Do you and your team monitor trust levels in the political field or the S&D Group?
Trust is a key issue for any political group or party. We not only closely monitor trust levels all over Europe in the different member states but take concrete action to regain trust by citizens in politics. This starts with our political messages and actions, leads to reliability and credibility and ends with communication and engagement activities to inform our citizens and remain in contact with them.
What steps can governments in Europe take to regain trust?
To regain trust in the European system, we have to act united. Member states must overcome their national selfishness and work together for European solutions. Going back to small and national solutions cannot be the answer in a globalised world.
And politicians must show that they are capable of finding such solutions. This includes defending democracy, freedom of speech and solidarity even in a climate in which hate and xenophobia are growing. Governments have to live up to their responsibilities and must give current and future generations, especially the youth, perspectives for a better life.
But what if threats to a particular industry’s trust levels come not from scandals and headlines, but from underlying structural changes? Take the media, where social media is not only a catalyst for changes in the business model, but also in the standing of traditional media companies as they run to catch up with quicker, more agile digital competition, as Oliver Herrgesell, senior vice president of communications at Turner International and another class-of-2008 EACD member, explains.
To what extent has public trust in traditional media been undermined by social media?
Social media is fast, cheap and everywhere. It empowers literally everyone to communicate globally: everyone is a critic, everyone can be heard. So the noise is getting louder, the constant and sometimes furious media criticism will not stop. However, we need to keep in mind that according to Edelman research, trust in media is among its highest level in the years since the recession. The most striking development is the increasing gap between the informed public and the general population, between those who are able to afford quality media and those who use cheaper information.
The latest Edelman Trust Barometer finds that people trust news from peers and search engines more than news from traditional media. How do you interpret this finding?
While quality journalism can be disruptive and discomforting, the nature of social media is to bring like-minded people together. People like their comfort zone, they trust the buddy-bubble. They follow their friends’ recommendations rather than trust journalists who are strangers for them. In addition they think search engines are more ‘neutral’ than media. Communicators working in the media industry should do what they always do: enable access, build trust and get into conversations. It’s only the ‘how’ that changes, and indeed it is changing significantly – as video is more relevant than ever before, mobile is the primary tool and social media seems to open up for brands a bit more than in the past.
What kind of conversations go on within Turner International about trust among your publics?
Internal communication is key. If management can convince their employees, they can convince everyone. In that sense, the best trust monitor for a corporation is honest staff feedback. For Turner International, the conversation with employees has the highest priority and with this in mind, we create tools and an atmosphere where our colleagues feel safe to speak up.