First of all, stifle that snarky laugh about awards for trust in business. Yes, trust in business is at an all-time low. All the more reason to identify best practices, celebrate them and help us to learn from them. And while most efforts at measuring trust fall short, there’s a new award ceremony in town and it’s looking extremely, well, trustworthy.
Why Most Trust Metrics Are Limited
Most efforts at measuring trust in business suffer from one of two difficulties.
1. Since trust is notoriously hard to define, one solution is to use survey data as a proxy. Trouble is, you can’t separate people’s propensity to trust from changes in companies’ trustworthiness. Bernie Madoff and the SEC didn’t change their trustworthiness overnight—but people’s opinions did.
Furthermore, survey data are extremely short-term. Opinions about institutions and companies are highly focused by the economy and by recent events.
2. The other solution is to get hard, objective data. But then, you’re stuck with the trust definition problem. You may be able to quantify accounting transparency—but is that all there is to trust? You may be able to quantify trusted twitterers—but what if the ‘most trusted’ twitterer turns out not to be the NY Times or Fox News or the President, but Justin Bieber?
Turns out data is cheap, but data that conforms with our common sense definition of trust? Priceless.
Introducing Trust Across America
Jordan and Barbara Kimmel of Trust Across America came up with an elegantly simple solution to the problem. They asked a variety of trust experts (disclosure: I was one) how to define corporate trustworthiness and then built a composite set of metrics to broadly reflect what they heard.
You can see the results here.
In brief, the model they developed is called FACTS: an acronym which stands for Financial stability and strength, Accounting conservativeness, Corporate integrity, Transparency, and Sustainability, with each factor evenly weighted.
The power of this model is that it is objective and quantitative, yet also definitionally rich. Don’t understand a result? You can dig in and find out how it came about. Don’t like the result? Then formulate a better definition yourself that you feel works better for your organization. It is a metric that is useful well beyond simply ranking.