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Richard Edelman: The business community is going to have to take care of its community health, not just its, you know, little part of the world of its store, or its factory or its office

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Introduction

Paul Laudicina: I am Paul Laudicina, chairman emeritus of Kearney and Founder of its Global Business Policy Council, and this is Coronavirus: a world transformed. And today, we’re talking about trust. Our guest, Richard Edelman, is a leading authority on trust in institutions. He is CEO of the public relations firm Edelman and creator of the Edelman Trust Barometer, which studies trust in business, government, media, and NGOs.

For the last two decades, the Edelman Trust Barometer has been released at the beginning of
every year, as it was once again in 2020. But this year is a very different kind of year, and
Edelman thought it necessary to release a spring update to gauge how public trust was faring in
the midst of a global pandemic. The spring update surveyed people in 11 countries around the world and the results show that amid the COVID-19 pandemic, trust in government, especially local government, surged 11 points to an all-time high of 65 percent, positioning government as the most trusted institution for the first time in Edelman’s 20 years of studying trust, but with an important footnote in the results for the US and France, where the increase in trust in government is largely a function of increased trust in state and local government.

In addition, there is a notable disappointment in how the private sector has performed during the
crisis, prompting Edelman to define this time as a “moment of reckoning for business, which
must now deliver on the promise of stakeholder capitalism.” More recently, the company conducted an Edelman Trust Barometer flash poll in response to racial unrest in the US. And we’ll touch upon this survey and how citizens are demanding brands play a vocal role in not only addressing critical questions of public health, but also in addressing systemic racism.

Interview with Guest

Paul Laudicina: So welcome, Richard. I'd like to start by addressing our current national conversation about race and inequity as people around the US and the world protest far too many tragic examples of racial injustice. The 2020 Trust Barometer that you released shows a growing public perception of unfairness in the system, driving distrust across all institutions. What, Richard, do leaders at all levels need to understand about this current climate of fear and distrust?

Richard Edelman: Well, I think, Paul, that on the matter of race, there's a very clear message that brands have to step up. And they have to step up because the buyers are different. They have different motives. They are exercising belief-driven buying, and they believe in brand democracy, and they think that brands should stand up for them. And that brands have the ability to be more flexible than their corporate parents.

So, you know, 60% of Americans are going to buy or boycott based on a brand's response to
the current protests. That's stunning. Also in the study says that four times as many people will
give brands more trust if they speak up and act. So—and this is across Republicans and Democrats—twice as many Republicans will give you trust; seven times as many Democrats. It's across all age groups, but more profoundly with Millennials. It's more profound with women. But again, the clear message for business is, you have to get involved in the discussion around
race, which has historically been the third rail of the American conversation, which is you avoid
it at all costs. No. Now you have to walk into it because we, as a people, have had quite enough. And brands are the ones that inspire us and motivate us and educate us and so advocate on our behalf.

Paul Laudicina: That's really interesting, Richard, and we've seen some major American brands actually begin to demonstrate that they understand the importance of brands and what kind of a role they could be playing, perhaps inadvertently, in promoting injustice and racial disparity. Do you think, then, you see some corporate movement in the right direction of late, Richard?

Richard Edelman: So there are two or three examples: Aunt Jemima with a brand symbol from 1889. You also have Cream of Wheat. You have Uncle Ben's, but these are just repairing old images. I think the more interesting question is what brands are going to do affirmatively. And I'll give you an example of Dove—Dove men's and women's products. They're actually advocating for something called the CROWN Act that enables people to go to school or go to work with
whatever hairdo they want. And they are pushing for legislation in the states to make that
happen. And so that's—that's serious, direct change. That I think brands are over time going to
be expected to carry out.

Paul Laudicina: Well, let's if we could, Richard, kind of open aperture a little bit more and talk about the results of the Spring 2020 Trust Barometer. What surprised you in the results that you released just recently?

Richard Edelman: So it stunned me that government’s the most trusted institution in the world. Because this is a much bigger reaction than 2001 or 2008, when we had, you know, the 9/11 event, and we also had the great recession of 2008. This is actually more like World War II, where it's global. It's having a serious effect on values. People are scared. And so government is seen as the information source, as the relief agency, as the one who's going to find the drugs. And that's amazing that for the first time in 20 years, Paul, that we've been following it, it's the first time government's ever been the most trusted institution.

Paul Laudicina: Well, that is, in fact, extraordinarily interesting, especially in light of the fact that two-thirds of respondents, as I understand it, say that those with less education, less money, and fewer resources are bearing a disproportionate burden of suffering in the pandemic. So we have trust in government going up; at the same time, a majority of respondents—a large majority of respondents—are saying that there is this inequity in the system itself. And I take the point that this is a higher increase in trust than any time we've seen at other moments in recent crises like in 2008 or 9/11. But how uniform is this expression of trust in government? What are some of the important distinctions that perhaps should be noted here, Richard?

Richard Edelman: So it's pretty universal. There are a couple of exception countries—Japan, France. And then in the US, government trust went up, but it was largely based on state and local government. So that's a nuance. It's the same in France: state and local government. But the reality is that business has trailed behind government the last few months. If you're thinking of this as a bike race, the yellow jersey’s been government and business has been going behind. Business has kept its head down, trying to figure out a good business model. And, you know, in some cases asking for government relief, but the moment that business has to show up big is this return to work, which is right around now.

So, do you wear masks on planes? Do you have spacing at restaurants? I think Starbucks is a
perfect example of a company that's reimagined its stores and made it clear that the workers’
safety is the first order of priority. And that, you know, customers will wait six feet apart. And,
you know, even if it means reduced revenues, and they'll facilitate their takeout business and
they'll figure it out. But again, it has to be around the premise that we will not push for opening before it is time. That's a big risk for business.

Paul Laudicina: Which is curious because we do see such variations in how local governments are handling the response to the pandemic, don't we? But in January, when you released your
annual results, an increasingly dominant popular concern was expressed about fear about the
future and fear of job loss was high then. And now it must be even higher. Of course,
understandably, it's over 55%. But people are obviously in crisis mode. They fear financial
insecurity.

But I remember you saying in Davos a year ago that popular concern about one's job security
had shifted from worrying about immigration to worrying about automation. So what's the
message there to business leaders about how to calm fears and earn trust among their
employees and stakeholders?

Richard Edelman: Well, the first job is to keep the employees safe. And that's a matter of equipment. It's a matter of how you set up your physical space. And for example, Edelman when we go back we're going to have half the number of people on a floor and we're going to have double shifts, you know, like, some in the morning, some in the evening or some days some of the other days of the week.

But the second point and the longer-term threat is the Fourth Industrial Revolution, which will of
necessity, you know, automate jobs. And so I think it's business's responsibility to do retraining.
And not just to the people who remain at the company because government won't do it. Government's too constrained at the moment. And that's going to be the trust killer for business if, if every business winds up like an Amazon store with no people in it, no retail clerks.

Paul Laudicina: Yeah. Well, what about the business of the media? Richard, I note from the results of your spring survey that traditional media and owned media saw big gains and despite high levels of trust in news sources, there's this need that you've expressed for credible and unbiased journalism. How are people getting their information about the pandemic? I also note that doctors, scientists, professionals, like in the sciences, tend to have greater credibility with the public than perhaps just spokespersons for government and so forth. How does all of this shake out in terms of how people get information about and trust the information they receive about the pandemic on the one hand, or perhaps even racial injustice on the other?

Richard Edelman: I think we're in a moment of battle for truth, Paul, and it's pretty hard when you have government leaders speculating about certain medical cures. I think the best combination is an elected official with a public health expert. That’s what's necessary. And we need to improve the quality of information flow. In fact, I find it fascinating that it's one of the biggest demands on brands. And that brands are to absolutely be part of the information flow. Because people aren't getting it suitably. You have to hear or see or read something five or six times before you believe it, partly because there's a lot of disinformation out there. Fake news is shared 10 times more often than real news. And the local news ecosystem has been actually cut in half the number of journalists or more. So a lot of what particularly young people rely upon is social. And it's not necessarily fact-checked or warranted. It's very politicized in many cases, and so that has to be countered by real facts from corporations with sources such as doctors or health experts.

Paul Laudicina: Mmmhmm. How about variations internationally, Richard? I understand that there may well be cultural differences that drive the so-called social trust, whereby countries like Japan, South Korea, Singapore, China, for example, where they've been more successful in having people place faith in government to lead the fight against the virus, perhaps because of
long-standing cultural traditions of self-denial in the service of collective wellbeing or other
Confucianist concepts that are at work. But what can we learn from data in these countries and perhaps specifically in China? How did what appeared to many in the West as the harsh lockdowns there affect public trust in that part of the world?

Richard Edelman: While there was fairly much global unanimity around the right of government to request and demand lockdowns, and also to take our data. Now, I don't think that's a long-term proposition that we're going to be comfortable with. And yet, for that moment of time,
it made sense, because we all want to get rid of this disease, and we need to do it collectively.
So there are higher trust levels in government in Asia. I mean, in the West, we went into this
crisis with low trust in government and low trust in media, usually the two key information
sources in a crisis. But in Asia, it's different. And I think that their work was actually pretty
impressive in China, in particular, in encountering what they found in Wuhan and making sure
that it was limited. So their system works.

Paul Laudicina: Yeah, it is pretty impressive, isn't it, Richard, that there would be so much unanimity across the world across different cultures with, you know, majorities of the public across all countries from the Middle East to Asia, Europe, and the US, where the government's highest priority should be saving as many lives as possible, even if it means the economy is going to sustain more damage and recover more slowly. Do you think these kinds of attitudes and behaviors are likely to stick or do you think over time like we're seeing in certain parts of the
United States, fatigue with protecting life through the extraordinary measures of you know,
obviously, social distancing, wearing masks, keeping the number of people out of public
engagements and so forth, is that likely to change? Or do you think the survey data suggests people are just not going to emerge until they feel it's safe?

Richard Edelman: I think it winds up being 50/50, Paul, and I think some part of it is your ideology or your political affiliation and some part of it may be where you live, you know, graphically, but I think there's a large proportion of the population that is tired of being locked down, and you know, it's summer and they want to go out and enjoy it. Even to the extent of wearing masks in theme parks, there's a 50/50. Some do, some don't and, you know all about herd immunity. So, it's partly a problem of belief in authority. Do I believe it or not?

Paul Laudicina: And, and so we saw the differences in Asia. What about, what do the numbers tell us about trust in Europe? You mentioned earlier that in a number of European countries, it was also like the US trust in local government rather than necessarily a national government. Is that how it's playing in Europe?

Richard Edelman: Well, there are giant trust in government, trust in Germany and the UK, for example, Boris Johnson's numbers went 25 points up. And so it's, again, partly him but also partly the National Health Service. And that's government. But I do think in the next phase, business has the chance to get its trust position back up, because government’s will inevitably go down based on disappointment with results.

Paul Laudicina: Well, there's probably a lot of lessons here for the political establishment as we get closer to the 2020 presidential election in the United States. What do you think based on all of your experience and these more recent results, Richard, what's the public looking for from the national government, from the federal government, in the United States and perhaps elsewhere?

Richard Edelman: You know, Paul, we have a means of measuring trust around ability, dependability, integrity, and purpose. Going into this problem as of January, government was low on all four criteria. And now, government has showed itself able. If you include state and local government in the US, for instance—dependable and you know, the extent of frequency of communication seems to indicate some level of integrity and purpose. But now we're starting to get multiple voices, and they're disagreeing, and it's confusing, and I think government scores are going to go down. And so I think we're looking for a plan that makes sense, but that prioritizes safety over economic results.

Paul Laudicina: And so as you sort of step back and take the long view of all of this, what's your sense, Richard, how will our institutions fare going forward? What do you advise leaders of all stripes these days that they should be doing to ensure that their institutions are capable of delivering on their promise to their constituents?

Richard Edelman: Well, again, in the short run, I think the litmus test is for business to execute a return to work safely, to concentrate on just example, safety checks that make it possible for people to feel confident going to hotels, or if you're flying on airplanes. So the business community is going to have to take care of its community health, not just its, you know, little part of the world of its store, or its factory or its office. And we're going to need objective measures such that we can evaluate ourselves whether or not we want to go. And business is also going to have to be flexible about making people come back to work if they're not comfortable.

Paul Laudicina: Yeah, I guess when—when you step back and look at all of this, the principles on which business operate have to be very clear, and the responsibility that they take, even in the midst of so much uncertainty and ambiguity about how long this will last and what measures will ultimately prove successful therapeutically. And in terms of prophylactics. The simple fact is all leaders across all institutions have a real responsibility to come to grips with these issues.

Richard Edelman: I think first and foremost is the drug industry. And they've actually done a terrific job. They're the fastest rise of any industry. And it's partly because the CEO of Gilead promised the first million and a half doses of Remdesivir to be free, for instance, or, pledge of distribution of vaccines. All of these are going to be looked at in a trust context. Does the company do the right thing?

Paul Laudicina: Well, that's a great note, Richard, to thank you. Not just for this discussion today, but for the extraordinary contribution you've made over the last 20 years to help understand how this critical issue of public trust affects the very stability of our societies and our ability to deliver on the needs of people across all demographic and socioeconomic divides. So thanks, Richard, very much for being with us today. Much appreciated. And stay well.

Richard Edelman: Thank you, Paul. You're good man. Talk to you soon.

Wrap-Up (Paul Laudicina)

There’s only so much ground we can cover in one interview, and we’re aware there are
undoubtedly many more questions that you might wish we had been able to discuss during each podcast. So don’t hesitate to be in touch with me with any additional insight we might be able to provide by contacting me at [email protected] or on Twitter at @paullaudicina, and I would be happy to respond. We’ll be back with new episodes of Coronavirus: a world transformed soon. So stay tuned. More is coming.

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About Richard Edelman

Richard Edelman is the CEO of Edelman, a global communications firm. The firm was named to Advertising Age’s 2019 A-List and was honored as PR Agency of the Decade by both Advertising Age and The Holmes Report.

Richard has extensive experience in marketing and reputation management, having led assignments with major corporations, non-governmental organizations, and family businesses in more than 25 industries around the world. He has counseled countries in every region of the world on economic development programs. As the creator of the annual Edelman Trust Barometer, Richard has become one of the foremost authorities on trust in business, government, media, and non-governmental organizations.

In 2020, Richard was inducted into the American Advertising Federation’s Advertising Hall of Fame. In 2019, he was named the PR Agency Professional of the Past 20 Years by PRWeek and was inducted into the publication’s Hall of Fame. In 2014, he was inducted in the Arthur W. Page Society’s Hall of Fame. Richard is regarded as an industry thought leader and has posted weekly to his blog since 2004. Kishore was awarded the President’s Scholarship in 1967. He graduated with a first-class honors degree in philosophy from the University of Singapore in 1971. He also earned a master’s degree in philosophy in 1976 and an honorary doctorate in 1995 from Dalhousie University in Canada. He spent a year as a fellow at the Center for International Affairs at Harvard University from 1991 to 1992.

He serves on the Board of Directors of the Ad Council, the Atlantic Council, the Children’s Aid Society, the Gettysburg Foundation, the 9/11 Museum, and the National Committee on US China Relations. He is a member of the Civic Committee of the Commercial Club of Chicago, World Economic Forum, and PR Seminar.

Richard earned his MBA from Harvard Business School in 1978 and a bachelor of arts from Harvard College in 1976.