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«Guidelines for Measuring Trust in Organizations Updated April 2013 By Katie Delahaye Paine Forward In 2003, a coalition of organizations representing ...»

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The Institute for Public Relations

Commission on PR Measurement and Evaluation

University of Florida | PO Box 118400 | Gainesville, FL 32611-8400

(352) 392-0280 | (352) 846-1122 (fax)

www.instituteforpr.com

Guidelines for Measuring Trust

in Organizations

Updated April 2013

By Katie Delahaye Paine

Forward

In 2003, a coalition of organizations representing 50,000 public relations and communications

professionals gathered in New Jersey to discuss ways to restore trust in American business. Buffeted by scandal and crisis since the Enron debacle, the average citizen’s belief in the integrity and honesty of corporate American had reached an all-time low. The coalition agreed on three basic actions that they could recommend to each and every CEO in America.

1. The CEO should articulate a set of ethical principles closely connected to their core business processes and supported with deep management commitment, enterprise-wide discipline and training.

2. The CEO should create a process for transparency that is appropriate for current and future operations. It should include an oversight committee, culture audit and consistent messaging.

CEOs should ensure that they have professional, competent counsel to serve as a strategic integrator, champion, bridge builder, catalyst, facilitator and record keeper for appropriate transparency.

3. The CEO should establish a formal system of measurement. CEOs should make trust a corporate governance issue and a board priority tied to compensation As a result of that statement the Measurement Commission of the Institute for Public Relations created a white paper that offered standards and guidelines for trust measurement.

In the ensuing decade we have seen the rise of online commerce and the decline of brick-and-mortar stores, necessitating whole new levels of trust. Social media has taught us that a single tweet can build or destroy an organization’s trust with its stakeholders. Media itself has changed, raising enormous issues of trust in the veracity of reporting and content.

Social media has ushered in a transparency revolution. It is no longer possible to hide behind a “corporate message,” because anyone from Wikileaks to your competition can expose any inconsistencies in seconds. As a result your stakeholders are putting greater emphasis on character value.

This document offers an update of these standard guidelines to take into account a number of new factors that impact the measurement of trust, namely social media, research in transparency and authenticity, and new research in public relations and trust measurement.

2 Preface In 2007, when Facebook had just expanded beyond its initial college marketplace, its communications team – including its agency, public affairs chief, product PR managers, and VP of communications – met in Palo Alto to set goals for 2008. At one point during the meeting, founder Mark Zuckerberg walked in to address the group. After his remarks he took questions. I was privileged to be part of the gathering, and I asked him how he would define success for his communications team a year hence. His response was stunning: “I would want people to trust us more.” That wasn’t the answer I expected, but it made realize just how critical trust is in a world shaped by friends and stakeholders that you have never met. Today, improving trust in your brand is probably the most common, if unarticulated, measure of success.

At the time, I provided Mr Zuckerberg and the team with the original version of this paper. But, in the intervening years, communications, public relations, and most of the world we live in has changed.

What hasn’t changed is the need to measure trust. It’s not just a “nice to have” piece of research. Trust has a direct impact on the financial health of an organization. Following the Enron scandal, its accounting firm, Arthur Anderson, was essentially forced into bankruptcy because its clients lost confidence in its results. In 2011, highly trusted brands like Target, FedEx, Penn State, Netflix, and Lowe’s all underwent crises that were either started or exacerbated by social media. Every single one had financial consequences, whether it was a decline in stock price, or the loss of key recruits to the competition.

I therefore decided it was time up update these guidelines, in the hope that organizations will agree with us that setting up a system to measure trust is a critical and achievable component of corporate governance.

Katie Paine, Member, IPR Commission on Measurement and Evaluation 3 Table Of Contents Forward

Preface

Table Of Contents

The Value of Trust and the Cost of its Absence – A True Story

What Is Trust?

What Is Trust Measurement?

Using Content Analysis to Measure Trust

Using Web Analytics to Measure Trust

Six Simple Steps to Set Up a Trust Measurement Program

Step 1: Define the publics and stakeholders you want to study or with which you want to build trust.... 9 Step 2: Set SMART goals and objectives.

Step 3: Establish a benchmark: What do you want to compare results to?

Step 4: Decide upon your metrics

Step 5: Select a measurement methodology, instrument, and/or tool.

Step 6: Analyze results, make recommendations and measure again.





How to Improve Trust

Resources for Further Study

A Trust Measurement Checklist

Questions for the Research Suppliers, Agencies, and Consulting Firms that Conduct Trust Measurement and Evaluation Studies

4 The Value of Trust and the Cost of its Absence – A True Story Here’s a true story about the vital importance of measuring trust between people and organizations. Once upon a time not very long ago, there was a state university in a small town in New England. Both the university and the town needed new soccer fields. One of the university’s alumni, a successful local entrepreneur, stepped forward and offered to donate $6 million so the university could build them. A site was selected, town officials were notified, and the university assumed it would soon be hosting soccer tournaments.

Now, the university was a venerable institution, and it took care to maintain its reputation of quality and prestige by communicating about itself to the world. But it failed to understand that some very important changes had been occurring in the town. For much of the university’s history, most of the people who lived in the town year round either worked for the university or had family or friends involved there. Over recent decades, however, rising real estate prices and property taxes had forced many of the faculty and staff out of town. Their houses were bought up by retirees and commuters who had no particular connection with the university. So the town’s permanent residents, who had once formed a sympathetic constituency, gradually changed into an inactive, disengaged public. As far as they were concerned, the university was just something to put up with. Whether they trusted the university was unknown and as yet untested.

Several years before the soccer fields were planned, the university had embarked on another large construction project, a 6,000-seat sports and entertainment arena. The university, a tax-exempt and local zoning-exempt state entity, chose to simply notify the townspeople of its plans. It completely failed to anticipate that the town’s permanent residents might object to potential parking problems or the absence of any local tax benefits. As a result, many townspeople felt railroaded by the university and town officials, and, after a contentious political campaign, the town leadership was replaced.

Let’s skip ahead a couple of years to the soccer fields proposal. The university, despite its strong public relations department, had been making no effort to understand the concerns of its constituencies. It was unaware that a good part of the town’s permanent residents had become well-organized and were potentially quite hostile. When the university announced its new construction project, the reaction was swift, noisy, and disastrous. A citizens group that had started as a simple email list during the previous election campaign now was now 2,000 members strong, including several community leaders who had close ties to the state capital. The group therefore had no problem attracting the attention of the statewide media. They also used e-mail and their listserv to ensure that every university trustee and every politician heard their complaints.

Less than two months after being announced, the proposed soccer fields were cancelled, the $6-million gift was rejected, and the university president stepped down. The school and the community paid a stiff price for the university’s failure to measure the town’s trust. Worse still, it would take a decade before suspicions were put to rest and trust rebuilt.

5 What Is Trust?

Trust has been a widely studied concept both by itself and, most importantly, as a component of the quality of relationships. Research by James and Laurie Grunig and Linda Hon and others have shown that trust is one of six independently measurable components of relationships. James Grunig has identified

three dimensions of trust that are measurable by the Grunig Relationship Instrument:1

 Competence: The belief that an organization has the ability to do what it says it will do, including the extent to which an organization is seen as being effective, and that it can compete and survive in the marketplace;

 Integrity: The belief that an organization is fair and just;

 Dependability/reliability: The belief that an organization will do what it says it will do, that it acts consistently and dependably.

Although the experts are not in complete agreement, trust between an organization and its publics are

generally described as having the following independently quantifiable characteristics:

 Multilevel: Trust results from interactions that span coworker, team, organizational, and interorganizational alliances. Which is why you need to cast a wide net when you survey your publics on trust.

 Culturally-rooted: Trust is closely tied to the norms, values, and beliefs of the organizational culture. Therefore it is critical to understand the self-image and self-definitions of your publics if you are going to accurately measure trust.

 Communication-based: Trust is the outcome of communications behaviors, such as providing accurate information, giving explanations for decisions, and demonstrating sincere and appropriate openness. Which is why communications metrics are critical in trust measurement.

 Dynamic: Trust is constantly changing as it cycles through phases of building, destabilization, and dissolving. So it is important to measure trust on a continuum over time.

 Multidimensional: Trust consists of multiple factors at the cognitive, emotional, and behavioral levels, all of which affect an individual’s perceptions of trust.

What Is Trust Measurement?

The science of measuring trust incorporates any and all research designed to determine and quantify how people perceive your brand or organization. It is the summation of all their interactions that coalesce in a perception of their relationship with your brand. More specifically, trust measurement is a way of giving a result a precise dimension, generally by comparison to some standard or baseline and usually is done in a

quantifiable or numerical manner. It seeks to answer questions such as:

 Have the behaviors, programs and activities we implemented changed what people know, think, and feel about the organization, and how they actually act (as exhibited by protests, votes, and purchases)?

1 http://www.instituteforpr.org/wp-content/uploads/Guidelines_Measuring_Relationships.pdf 6  Have the actions or behaviors of my organization had an impact on the trust that our constituencies feel towards our organization?

 Have those public relations and communications efforts that we initiated to build trust had an impact – that is, “moved the needle” in the right direction? If so, how can we support and document that with research?

Traditionally, all valid trust measurement has been conducted via some form of survey research.

However, with the advent of social media, a number of other techniques have been suggested, including content analysis of social networks (i.e. Twitter, Facebook, etc.) and web analytics. Let’s look at the pros and cons of these alternative methods.

Using Content Analysis to Measure Trust The proliferation of content, and specifically personal opinion as voiced in blogs, Facebook, and Twitter, has led many to try to mine this data for personal opinions and sentiment. Typically this mining has been done using some form of Natural Language Processing. And, while it appears to have some validity in measuring sentiment in entertainment (for instance, books, movies, and television programs), substantial further research is necessary before we can judge with certainty whether what someone posts to a Facebook page in fact really represents trust. 2 Manual content analysis, however, is a more realistic possibility. In an experiment conducted with three top research universities, my firm, KDPaine & Partners, found that it was possible to create a set of coding instructions based on the Grunig Relationship Instrument that a human coder could use to detect and record elements of trust in social media conversations. However, the experiment also showed that there were several caveats for using content analysis to determine trust levels.

Some level of emotion must be present to analyze it. If you are analyzing a topic that does not evoke sentiment, it will be impossible to discover sentiment in it. In the university study, for consistency purposes we removed discussion of sports from the analysis. Once we did that, most of the emotion and passion went with it. Of 2,000 total items analyzed, only 265 (13%) actually contained any of the relationship concepts we were trying to study. So, if you are a B-to-B company or one for which most of the conversation about you is about science or academic research, then there may not be enough sentiment expressed to be measureable.



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