#12 In Business We Trust - Lessons from The Edelman Trust Barometer with David Bersoff

Discover why businesses are taking the lead in societal trust, with David Bersoff from the Edelman Trust Institute sharing insights from their latest Trust Barometer Report. You'll learn why companies now outscore governments, media, and NGOs in trust ratings and how they are stepping up to address global challenges where traditional institutions fall short. We tackle the complexities behind these trust metrics and explore the evolving expectations placed on businesses to champion social issues.

Join us as we dissect how the type of business and its origin influence public perception. Family-owned enterprises and small businesses tend to garner more trust compared to their larger counterparts, often tied to the personal accountability that comes with a family name. The discussion also navigates the impact of geopolitical factors and national stereotypes on a company's trustworthiness, and the increasing demand for business-government collaborations to drive innovation and build robust partnerships.

Engage with our conversation on the strategic engagement of brands in societal issues, focusing on aligning actions with core values and stakeholder expectations. Hear how some brand decisions, like those from Bud Light and Natura, illustrate the fine line between successful and unsuccessful stances on social matters. We also delve into the personal growth lessons that can be drawn from professional setbacks, stressing the importance of resilience and reciprocal trust in nurturing lasting business relationships.

More inspirations from David Bersoff:
Harvard Business Review Article How Companies Should Weigh In on a Controversy

The Edelman Trust Institute's LinkedIn Page and Website 

Please visit our website, www.businessandsociety.net, for more inspiration.

Chapters

• 1:18 Why measure trust?
• 3:23 Which is the most trusted institution? Business, NGOs, Government, or Media
• 9:28 Trust in business leaders
• 13:04 Trust in family-owned businesses compared to private, public and state-owned businesses
• 16:06 Does a company's HQ impact trust levels?
• 18:51 Trust in business government partnerships on innovation
• 21:56 What is the role of business in society?
• 25:24 Does society expect a brand to take a position on a political or societal issue?
• 30:12 How should companies weigh in on a controversy?
• 38:05 How do you handle differences of opinion and setbacks?
• 40:23 Three essential actions business leaders must take to build trust
• 42:12 Book recommendation

Transcript

Senthil

00:03

Hey, it's Senthil here. Welcome to the Business and Society podcast. Every fortnight, we speak to a world-leading thinker to better understand the role of business and society. Joining me today is David M. Bersoff, the Head of Research for the Edelman Trust Institute. As the Institute's chief trust scientist, David ensures the quality, integrity and scientific value of all of Edelman's trust oriented research, which includes the annual trust barometer, as well as yearly topical studies examining issues such as climate change, trust in the healthcare system, trust in the workplace, trust in brands and racial justice. He also oversees all of the Trust Institute's external research projects done in partnership with economic, social policy and philanthropic institutions. Before entering the consulting world, David taught social psychology. I sat with David to discuss his work and some of the findings about business and society from the Edelman Trust Barometer. Warm welcome, David, delighted to have you on our podcast. 

David

It is lovely to be here. 

Senthil

01:18

Awesome. This year you released the 24th Annual Edelman Trust Barometer Report. Two decades is a long time. Why does the Edelman Trust Institute measure trust in institutions such as businesses? How did it all start?

David

01:38

Well, it is important to study trust, not only because it's the foundation of all relationships. Relationships that people have with each other, but relationships that people have with institutions. It's also an important aspect of communication and effective communication. But the reason why, as an organization, we have focused more on trust between people and institutions rather than interpersonal trust is because in today's world, it's sort of impossible to get by, it's impossible to live your life, unless you can delegate important things to social institutions. 

02:09

So, when you think about government, we delegate protection and fairness and infrastructure to them. When you think about business, we delegate innovation and economic prosperity and to some extent our financial security to them. When you think about media, we delegate data collection and information gathering and the ability to know what we need to know to make good life decisions. When you think about NGOs, we're delegating sort of making sure someone is caring about and looking after the social issues, the problems of humanity that we all really care a lot about. And so if you start to lose trust in these institutions, you start to feel very at risk, you start to feel very vulnerable because some of the most important things in your life are not in trustworthy hands, and that leads to a lot of sort of societal instability, and so it's critically important that we live in a world where we can trust our main social institutions. That's why we study it, and we don't just measure it, but we try to understand why is it high, why is it low, and what can we do to make the situation better. 

Senthil

03:23

Let's address the big question right away. Since 2021, the Trust Barometer reports that business is more trusted than other institutions such as governments, NGOs and media. Why do you think this is the case? I'm asking also because surveys from other respected institutions such as GlobeScan and here in Australia, Roy Morgan, say otherwise. 

David

03:52

So, there's a lot in that question. Let's unpack it a little bit. It's hard to compare across different trust studies because there's so many variables that can have an impact on what a trust score is. So, for example, I think GlobeScan, they use a net trust score, we use a top four box score, they use a four-point scale, we use a nine point scale. We have a certain set of countries, they have a certain set of countries, and so it's really difficult to compare studies without taking into account some of the fundamental differences in the data collection. 

04:22

Now, when we say that business is the most trusted, let's put that in the proper context. One is it's not the most trusted thing in the world. It's more trusted, though, than the other big social or societal institutions that I was just talking about government, media and NGOs so it's more trusted than they are. Given the state of government in a lot of places, I don't think it's surprising that people have more respect, more trust, more confidence in business than they do in government. If you also look at the media and how media has sort of gone from presenting information, presenting facts, sort of being this objective reliable source of the information you need to make good life decisions to presenting information kind of biased by an ideology or a political position. It's no wonder why trust in media is not as high as, say, trust in business. The more interesting thing is the comparison between trust in NGOs and trust in business. So, we're seeing a lot of activity around business these days, especially around this idea of to what degree does business have an obligation or a responsibility to sort of weigh in on social issues, to engage on social issues, to be sort of more of an active member of society, beyond just what their business is. That, I think, is pretty clear. The question, though, is why is that? What's going on here? 

06:02

And what happened in 2019 and 2020, where NGOs and business were tied after two decades of NGOs being more trusted than business is that I think people were at a point of frustration and saturation about the state of the world. They were looking around and they were not seeing problems being addressed. They were not seeing progress. They were not seeing reasons to be hopeful that things will get better, and a lot of that was because government had sort of failed. Government had left a leadership vacuum, because they were more engaged in sort of infighting and polarization and politicization than they were in actually getting things done. So, people were really frustrated. 

06:52

Now, on paper, if you were to think of what institution would be the heir apparent to government, who would people want or look to to step in to get things done if government is not functioning? Now you would think that would be NGOs, because they don't have sort of profit to get in the way, they don't have sort of these dual loyalties and they're generally seen as ethical organizations. In contrast, business is seen as being less ethical than NGOs, but they are seen as being much more capable. And so back around 2019, 2020, people had a choice when they were looking for a champion to help fill sort of the problem-solving leadership void left by government. They could go with the more ethical but less sort of competent, capable organization NGOs or the more capable but somewhat less ethical organization business. And my thinking, my theory, is that people were more upset by a lack of progress, a lack of movement, and so they choose the doer, even though the doer was perceived as a little less ethical than the highly ethical institution that wasn't seen as quite as capable of getting things done. 

08:14

But let me be very clear about this, Business is not the hero of this story. Business is the anti-hero of this story. They're not John Wayne riding in to save the small town. They're more Clint Eastwood riding in to save the small town, a guy with a big gun, not afraid to use it. He's going to get it done. He may have a checkered past, but at some point, we just need to be saved. We just need to see somebody do something. And that's sort of where business is netted out. And as business has become more engaged in those social issues, interestingly enough their ethics score has gone up. So, as they become sort of more embedded in society and helping solve problems, their ethics score has trended up. Their capability score has started to just soften a little bit, indicating to me that these problems that we're asking them to address really are difficult, really are challenging, and as they're trying to do something positive and useful in that regard, they're starting to sort of be a little less successful in that realm than they are in the traditional business realm. 

Senthil

09:28

Talking of competency and being ethical, David. Paradoxically, when it comes to leaders, 61% of respondents worry that business leaders are purposely trying to mislead, saying things they know are false or gross exaggerations. This is 63% from government leaders and 64% for journalists and reporters no significant variation among leaders of different sectors. Why is that? 

David

09:56

So let me just add a touch of nuance to that finding, because I find it's one of our scariest findings. And what makes it more scary is that if you go back a few years ago, the most worried about source of misinformation were foreign bad actors, this idea that hostile governments are using misinformation as a weapon against us. That was the biggest information worry. It's now a somewhat newish thing the last few years where people are actually more worried about being lied to by our leaders of our social institutions than they are about, you know, foreign actors trying to essentially mess with us. It's not that we've stopped worrying about bots and you know, misinformation coming from foreign countries. It's just that our concern about internal misinformation has sort of caught up with that concern. Now to your question about okay, there's really no difference. First of all, it's a high number for everyone, and then there's really no difference between journalists, government leaders and business leaders. 

11:03

I think part of the reason why business leaders may fare less well than business as an institution it has to do to some extent with kind of a familiarity effect. So, we've done some research in the past and we basically said how many CEOs can you name? I mean, how many CEOs do you like know from Adam essentially, and the number is super small. You know one, two, three. The guy average person on the street maybe knows one or two or three CEOs by name. Compare that to the number and types of interactions that you have with corporations on a daily basis. So, you know, I'm sitting here and my computer is working and my light is on and the furniture is supporting me and my last flight got me where I needed to go. 

11:52

I have so many interactions on a daily basis with brands and companies that work where they fulfil their promise, and I think that is a lot of where basic trust institutions come from. But when you get people talking about or thinking about CEOs, they think about people who are spending billions of dollars to go to space rather than help people. They think about people speaking out into the world, controlling media, saying things that aren't necessarily correct or sensical. And so, when you call upon people to think of this group of people business leaders, CEOs the people they're thinking of aren't necessarily paragons of virtue, because the paragons of virtue aren't necessarily out there making the most noise. And then, in terms of government leaders, well, that's where polarization comes from. It's government leaders sort of attacking each other and then attacking each other, undermining faith in government, and then you know the sniping that goes on between right oriented versus left oriented media. Again, they're sort of destroying their own reputations. 

Senthil

13:04

Interesting. It is also interesting to note that family-owned businesses are more trusted compared to private, public and state-owned businesses. Similarly, I noticed that trust varies depending on where companies are headquartered. Could you talk a little about this finding? 

David

13:23

Yeah, those are two somewhat different but related findings. I think the companies being trusted differentially depending on where they come from is a little bit either a sort of a halo or pitchfork effect associated with people's views of the country itself. So, the country you're from has an influence on how you are seen in the world, and it has an effect on how you are seen in the world. Mostly in terms of how people sort of view the government. Is that country's government friendly to us? How different are they than we are? What kinds of things are they engaged in? And do I approve of them or not? Because I think the association is that a company from a particular country reflects the values and activities of that country, and so that flavours how people see countries. I mean corporations from various countries. And then there's also this sort of reputation. So, companies from Germany, I believe, tend to do really well because people, when they think of Germany, they think of precision and engineers and everything is just right and just so, and so a country like that is going to produce more reliable brands when it comes to different types of business. So, you have, as you said, we have family business and publicly owned and state owned. 

14:50

Again, I think people would have a difficult time accurately telling you which is a family owned company versus not, and sort of full disclosure here. 

15:02

I work for a family-owned company. Edelman is still owned by the Edelman family. But I think what's going on there is that when you say the word family business it sort of conjures this idea of there's an individual who's taking moral responsibility for their company. They know that anything that their company does is bad is going to reflect not only on them but on their family name in this generation and future generations. I think they have this image of something that's more like a big family than a corporation and those warm associations rub off on people being more likely to trust a family business. We sort of see something similar. You could ask people do you trust big companies versus small businesses? People are more likely to trust small businesses than big companies, not because they do some sort of mathematical calculation and decide that big companies are less trustworthy, but they just associate sort of a different set of values, a different way of operating with a small business, same way that they associate a different way of doing business and operating with a family business versus a public company. 

Senthil

16:16

Excellent. A follow-up question on the companies and the association with the countries they are headquartered. How was the trend like? Was it always the trend like people associate a specific company from the political structure of that country, or is it a recent phenomena that simply follows the protectionist tendencies that are rising in many parts of the world? 

David

16:39

You know, I think, and this is just sort of my impression, but I think in the past, companies from certain geographies were viewed sort of based more on the stereotype you have of that country. So, you know, the countries that used to be at the top of the list was Switzerland and Germany and Canada. I think the US used to enjoy a slightly better status in the world than it does now, think the US used to enjoy a slightly better status in the world than it does now, but it was more about people associating the company with how they felt about or thought about the country, but less in terms of its political activity and just more in terms of you know, you think about this again the Swiss, like the Germans, very accurate, very precise. Everything's got to be just so. So, what they produce has to be you to be just so. 

17:31

I think it's a little bit more recent that perceptions of companies from different countries have been to some extent I would contaminated isn't the right word but influenced by nationalism, that the rise in nationalism in lots of different countries has led to sort of more negative views of other countries' companies, and then you also have a little bit more of you know this sort of bipolar geopolitical situation. You have the Western democracy model and the Chinese model, and people who adhere to the Chinese model are more favourable towards companies who follow that model. People who adhere towards more of the Western democratic model, again you're going to see more favourable orientation towards companies from those countries. So, I think it's always been to some extent based on kind of assumption and stereotyping. But now we have this whole nationalism, geopolitical strife sort of orientation layered on top of that. 

Senthil

18:51

It's enlightening, David. So again, according to the report, trust in governments is not encouraging. We briefly talked about that, but I was intrigued to see that the demand for business government partnership on innovation surged over the past decade. What's going on here? Do you see such partnership as a pathway for building trust in institutions? 

David

19:14

You know, we talk about here at Edelman, this sort of this idea that partnership is a tide that lifts all boats. People want to see sort of every combination of partnership there is among the four institutions and to the extent that you're seen as being a good partner and as partnering and taking partnering seriously, that has an upward effect on trust levels. There's a strong relationship between being seen as someone who's willing to partner and that are partners effectively and being trusted. And I do think you know there's several possible explanations for that. One is that today's problems are so complicated, so challenging, so naughty, that people sort of understand that one institution alone isn't going to be able to do it, that the only way forward is cooperation among institutions. That's the only way these big problems are going to be solved, and so people are sort of demanding that. 

20:20

The other thing I think about partnership is, you know, if you take an example, sort of like here in the US, if there is a piece of legislation or an initiative or a policy and both Republicans and Democrats agree with it, that's like wow, that's got to be the right thing, because they disagree on everything. 

20:44

They have different, you know interests, different motives, but if they can agree that this is the right way forward. This is the best. That gives that path extra credibility. And I think there might be something similar here that government and business… it's a little bit of the watched and the watcher, a little bit of the fox and the hen house. But if we can get business and government to agree that this is a good regulation or this is a good way to distribute a new technology, if this is the right way to develop and innovate something, if they both agree that this is the right way forward, develop and innovate something, if they both agree that this is the right way forward and they're working together, that gives that more credibility. And we just see that institutions agreeing, working across institutional boundaries, that just makes whatever they come up with seem better than if it only came from one of the institutions and certainly a lot better if it came from one institution and the other institution has negative things to say about it. 

Senthil

21:56

What is the role of business in society? According to your findings, has it changed over the years? 

David

22:03

Yeah, this is a question that I've been wrestling with and maybe I can play out some of the logic here and even get your thoughts on that. So, I think there's a couple of things that are clear. One thing is clear that business still has a responsibility for innovation, for prosperity, for growing wealth. Business has always had that responsibility. It still does, regardless of what else I'm about to say, and most people believe that that's not a minority opinion. I think it's also true. 

22:37

I think people again across the board could agree that business is under more pressure than ever before to sort of weigh in on societal issues, to get engaged in addressing societal issues, to sort of look beyond their own business and the health of their own business to the health of society. So, I think that pressure is there. You may not love that or agree that it should be there, but it's there. And so now the question is how do we think about that? So, there's two ways of thinking about it. One way is that, all right, business has it's just another log on businesses fire. They have to create prosperity, they have to innovate, they have to create jobs and employ people, and now they also have to get involved when it comes to climate and health care access and education and equality and any number of other issues. So, the question is are those two separate things? And so, in some way, the role of business in society is changing, in that it's not only responsible for sort of economic stuff, it's also responsible for social stuff. 

23:52

The other way to think about it and this is what I've been sort of toying with is that the pressure for greater engagement, the pressure to get more involved in social issues, is not something that exists apart from the expectation for economic prosperity and turning a profit and innovation, but it actually becomes a pathway to achieving that profit. 

24:19

So, it's a difference between do we think that business needs to do more in addition to making profits, or do we think that business needs to do more in order to make profits? So, in other words, this idea of being more engaged, that is what you need to do these days to be and have a successful business. Your goal is still the same prosperity, profit, wealth creation. It's just that, given the situation in society today, you can't get there unless you're seen as an organization that does those things. So, it's not something that runs parallel to your main cause of your main activities. It's not a distraction, it's actually the road to success, and what's changed is not so much the role of business in society, but the road for business to achieve success in society, based on the demands of the people that allow businesses to be successful customers, employees, regulators, communities, investors. 

Senthil

25:24

Such an interesting perspective. David, I want to refer to your another report, brand and Politics, and I quote a statement from the report the line between brands and the society they operate in has dissolved. Today, consumers are expressing their politics and their power through brand choices contributing to a new normal. That's opening brands up to exposure they cannot avoid. End of quote. Does this mean that society expects a brand to take a position on a political or societal issue? 

David

25:58

So again, there's a lot in your question. This should not be interpreted that brands are expected to take a stand on every issue. That is sort of a wrongheaded way to do this. In the early days, when this stuff was just sort of happening, I think brands and companies decided whether or not to weigh in on an issue depending on how much headline it was getting. How much visibility did the issue have? If everybody was talking about it, we better have something to say about it too. That was a recipe for disaster, and a lot of brands ended up getting burned because they ended up speaking out about things they had no business speaking out on, because they had no expertise, they had no standing, they had no stake in that issue. And so, what we talk about is that I don't think there's a brand that doesn't have some sort of obligation, responsibility or expectation to weigh in on some issues. There's no brand that needs to weigh in on all the issues, and the art is understanding which issues you have a certain obligation or responsibility to weigh in on. In that same report, we talk about permission space, and permission space is sort of defined by how you position yourself in the market, the kinds of values you associate yourself with what is important to your stakeholders and what's going on in the world. Those are sort of the considerations that help you define those issues that you should weigh in on versus those issues you should probably avoid. So that's one aspect of it. It's not about all issues, it's about certain issues. 

27:40

The other dividing line is between sort of social issues and political issues. Now the tricky thing there is there is no objective definition of what makes something a social issue versus a political issue. Sometimes a very benign issue becomes politicized. So, I use the example of Cracker Barrel, which put meatless sausage on its menu. Should be a very easy, straightforward business decision. We need to sort of broaden our offerings so that we appeal to more people. But people saw that as a woke act, as caving into a liberal agenda. So, a simple thing like adding sausage to a menu suddenly became a political issue. You would have no way of necessarily foreseeing that. So, it's very difficult to differentiate a social issue from a political issue. 

28:32

But people are very clear that they don't want businesses engaged in politics. They want businesses engaged in addressing social issues. And so, you control what you can control. And what you can control is sort of how you engage. You stay on the right side of the social versus political divide by certainly not adopting a party affiliation or endorsing or giving money to one candidate or another. That's clearly a political issue. 

29:03

But the art again is how do you weigh in on a politicized issue in a non-political way? And that's all about going back to your values, going back to the purpose of the organization. How do you sell yourself or how do you present yourself to the world and what do your stakeholders care about? And if you have a history of weighing in on issues that reflect or are oriented towards your values or a direct result of the business, you're in or are very important to the people that allow your businesses to be successful, if you do that consistently over time, some of the issues you may weigh in are politicized. Others won't be. But that consistency over time makes it more difficult for people to paint what you're doing as a political action, as jumping on a bandwagon, as being opportunistic. It's all about consistent, values-driven behaviour over time. That is your best defence against being politicized in a world where you can't avoid getting involved or addressing these issues. 

Senthil

30:12

On that subject, David, you recently co-authored a fascinating article in Harvard Business Review titled how Companies Should Weigh in on a Controversy. Many institutions struggle in this space engaging with societal issues, especially in a time of political polarization, war and geopolitical conflicts. Can you please share the central idea of that article and your advice to leaders? 

David

30:38

So, yeah, there's a couple of central ideas here. One is that all of this handwringing and clutching of pearls and rending of cloth about whether you should or shouldn't weigh in, that ship has sailed. Most people expect you to weigh in and it's most of the people you need for your business to be successful. So, stop worrying about whether you should weigh in on something and start worrying more about what issues you need to be weighing in on and how you weigh in on them. So that's sort of the first point. A second point is when a brand goes wrong, a company goes wrong. Weighing in on a social issue, becoming engaged in a social issue, it's almost always the execution and not the issue. So, we talk about in that HBR article sort of the tale of two transsexual individuals the Bud Light example and the Natura example. It is the same issue, but there was hugely different outcomes because the way Natura's approach to that issue was different and seen as being more consistent with what they've always done than what Bud Light was doing. Bud Light took too many people by surprise. They then backed down, but again, it wasn't about the issue. If you look at Brazil versus the US, they're equally accepting, or unaccepting, as the case may be, of trans individuals. It was that the two organizations involved. They did it differently and they did it in ways where it worked for one and not for the other. So that's sort of the second learning. And then, in terms of the third, the goal here and because it can be really daunting the goal isn't to get all your stakeholders to agree oh yes, this is absolutely the right thing to do. We're all behind you. You've rallied the troops, let's go forward. That will never happen. You have to understand that the goal here is to be an organization that's true to your values, but that the best you're going to be able to do is get your stakeholders to at least understand why you did what you did. And if you can get them to understand, they're going to feel respected, they're going to feel listened to, they're going to feel honoured and they're also going to feel well, okay, I didn't win. I didn't get my way this time. You didn't do what I wanted to do this time, but I have faith that next time I'm going to get a fair hearing and you're going to come to a good decision, and so I'm going to stick with you for those reasons. So, it really is about understanding the importance of stakeholder management as well as how to manage those stakeholders. The goal isn't that everybody agrees, and we all hug each other at the end. 

33:27

And then I guess the third piece of it is there is so much discussion about stakeholder or multi-stakeholder orientation towards business. 

33:37

Lots of discussion. We wanted to add some nuance around that. Certainly, it's incredibly important what your stakeholders want, but you can't be a stakeholder-driven organization to the extent that you have no moral core, no centre, nothing for people to react to. So, you have to sort of consider three things what your stakeholders want, who you are as an organization, what is your moral core. And also, you have to keep an eye on your fiduciary responsibilities. Nobody wants companies to sort of go bankrupt on the altar of virtue. It's still, at the end of the day, I want to be employed, and I want to see innovation and I want economic development. And if you completely ignore that in order to chase the desires of your stakeholder, or you completely ignore that to go full time into social issues, you're not making this problem better. You're not going to make people happy at the end of the day, you're just going to sort of trade one set of problems for another set of problems. 

Senthil

34:38

That's awesome! David, I'll ask one last question before we move on to the last section. It's again on the brand and politics report. It says that climate change is one of the top societal fears, along with election results and nuclear war. But when it comes to the brands consumers buy or use, things like value for money, quality or customer service take precedence, not climate change. Why is that? 

David

35:06

So, I think there's a couple of things there. I think, in terms of the narratives that we tell people around climate, there's too much emphasis on sort of deprivation to avoid disaster, which is you've got to give all of these things up that you might love or enjoy or have interested in in order to stay alive, and that narrative is fear-inducing but it's not motivating. People aren't motivated by seeing a future in which everything that they love can no longer be done, and so that's sort of one aspect of it. What we need is less of this deprivation to avoid disaster and more vision for the future that I can believe in, and I want to be a part of. I need benefits beyond survival. You need to paint a picture of a climate-friendly lifestyle that I want to actually be a part of, and if you do that, then I'm going to be more willing to make some of those sacrifices. 

36:09

The other side of this is that doing the right thing shouldn't be harder or cost more than doing the thing that you don't want people to do. It's a basic behavioural economics. If you make the climate-friendly options harder, less convenient and more expensive, you're not going to get that behaviour, and so there's a certain you know people kind of imply and your question kind of implied that there's some sort of moral failing. Why aren't people out there doing what they need to do to lower their impact on climate? Well, what you're really asking them to do is go against their basic psychology, which is you go towards the things that are easier, more pleasant. You know that help your sense of financial security, and so at some level, climate damage needs to be priced into things so that it's not cheaper to pick the more climate unfriendly option. 

37:06

I mean, it's really asking a lot of people to dangle two things in front of them here's the cheaper one, but it's more damaging. Here's the expensive one, but it's less damaging and then expecting them to choose the more expensive one. That shouldn't be a choice left to their hands. That should be something that institutions make sure doesn't happen. So, you're not in a position of having to go against your natural tendencies. You're not in a position of having to break every rule of fundamental behavioural economics in order to do the right thing. So it's a combination of the reward matrix in society is not optimized to get people to make the right choices, and on top of that, there's too much deprivation to avoid disaster and not enough, envisioning the future in such a way that, yeah, I want to get there and I might be willing to make some near-term sacrifices in order to get to that great vision. 

Senthil

38:05

Excellent! David, Let's move to the segment how I Did it, where we ask all our guests three personal questions to draw lessons from their life and career. How do you handle differences of opinion and setbacks? 

David

38:20

So, yeah, let me focus on the setbacks, because there's more of, I think, a generalizable recipe there. Differences of opinion are a little more sort of idiosyncratic. Now, the way I handle setbacks is I treat setbacks as data. So, when you have a setback, that's the world telling you that your approach wasn't quite correct, or you overlooked something or you haven't taken everything into account. So, I like to talk about the fact that I've been fired from every job I've ever had, except for the one I have now, and the jury's still out on that. But those setbacks and believe me, it's horrible being fired or made redundant or whatever the euphemism is but I was able to sort of look at them and see what the data was. What was the message the world was sending me? The first time it happened, the world was sending me the message that I was in the wrong career, I was in the wrong profession. I did not have the temperament and in this case, it was to be a college professor. I did not have the temperament to be a college professor. I have sort of the air of a college professor, I can pass as a college professor, but I didn't really have the temperament to sit there and do that for 40 years. 

39:34

The second time it happened, the lesson I learned, the piece of data, the information, the feedback I got was that you can't stop sort of striving or challenging yourself. I kind of got really comfortable in that job. I could do it; I could do it well, but I wasn't really growing much anymore and I wasn't sort of hedging my bets or having some sort of plan B because I was figuring there's never they're never going to fire me. They did. So, I'm much more careful now these days about always striving for something. Sometimes we use the phrase if you're not looking up, then you're looking down, and if you're looking down, that's not any good, but it's just sort of keeping myself vital as well as keeping my options open. So that's how I think about setbacks. 

Senthil

40:23

That's a lovely answer, David. In your experience, if a business wants to build trust, what are the top three essential actions business leaders must take? 

David

40:36

It's an interesting question and when I think about it, sort of the basic advice that comes to my mind is sort of don't do anything stupid or don't think you're going to get away with something. I mean, I could give you the list, right. Well, you've got to be fair, and you've got to be transparent and you've got to follow your promises and you got to be a source of good, reliable information. But at some level, yeah, that's just sort of generally true. But the first law of basically being trusted is don't do anything distrustworthy. 

41:09

The second law, which is a little meatier and what might be, I think, a little more helpful to the audience is that asking yourself how can I get people to trust me is the wrong question, it’s a question that is asked a lot, it’s the wrong question. The right question is how do I make people feel like I trust them because one of the biggest predictors of trust, one of the predictors of being trusted is if people think that you trust them. You have to give trust to get trust. And while that might seem kind of simplistic at a certain level, I can't tell you how many times I'm asked how do I get people to trust me? Because they think, oh, if I just do this, if I act in a certain way, it's going to happen, Trust is going to accrue. You can do whatever you want to make yourself seem trustworthy, but if, at the end of the day, people don't feel like you trust them, doesn't matter. 

Senthil

42:13

Wow, finally can you recommend a book or two to our listeners? 

David

42:20

So, the book question, the infamous book question. I have to be really honest. I do a lot of reading. I do a lot of. You can't, I can't be in this job without doing a lot of reading. 

42:32

I tend not to read books because I feel books are an inefficient way to transfer information. I'm much more likely to read, say, journal articles or articles of other sorts, because they tend to be shorter and to the point. There's a lot less sort of fluff and spin. It's sort of like this is what we did, this is what we found, this is what it means and at the end of the day, that's the information I need to help my thinking and to do my job. Books it's in there, but you have to cut through a lot of verbiage to get there. 

43:07

Most books could do with good edit. So, I definitely prefer articles, and what makes an article a good article besides sort of the fact that it was done in a rigorous, thoughtful way, is that it's highly relevant to whatever you're thinking about at that moment. So, it's not like oh, here's an article everybody should read. It's whatever you're thinking about. I can tell you that there are some key articles that will really shape your thinking. That will take a lot less time for you to get through and glean the information you need. 

Senthil

43:41

Interesting. Is there any specific source you go to pick most of these articles? 

David

43:46

So, what we tend to do is, you know, I tend to think about topics like I'm working right now on a chapter on purpose and purpose within a corporation. So, what you do is you just do a search in a lit review database on that topic and what you see is sort of are they in a top tier journal? How many other people have cited them? You get some sort of sense on how influential the article is, and so I tend to favour articles in the topic I'm looking at that are more or the most influential. 

Senthil

44:22

That's lovely. Thanks so much, David, for joining me and sharing your valuable perspective. It was great talking to you today. 

David

44:30

Oh, it was a pleasure. I actually had fun. Thank you. 

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