From reports of tainted food to consumer data theft and other cyber breaches, trust incidents are becoming increasingly visible to the general public. The heightened transparency inherent in our digital world means trust is a highly flammable, ever-present concern.

For most companies though, trust has been a soft factor. Its connection to a company’s value has always been there, but exactly what that business value is has been unclear. But now, new research from Accenture Strategy allows you to measure the impact of trust on your company’s bottom line. As more and more companies experience trust incidents, the hard facts tell us that trust in business is anything but soft.

Accenture Strategy defines trust as a consistent experience of competence, integrity, honesty, transparency, commitment, purpose and familiarity. We view a trust incident to be any event or circumstance that results in the loss of real or perceived trust in a company. The Competitive Agility Index measures this from the perspective of six stakeholder groups: customers, employees, suppliers, media, analysts and investors.

It’s clear that trust has become material. If we define “material” as anything that could change the perceived value of a company, trust is now a bona fide poster child for materiality. Trust declined in 10 of 15 industry sectors in 2017, signalling that companies must better position themselves for resiliency from trust incidents.

When we compared companies that experienced a trust drop to those that did not, we saw a trend. Those that had a drop in trust saw their Competitive Agility Index scores decrease more than those that did not. While trust accounts for a fraction of a company’s total score, it disproportionately impacts revenue and EBITDA.

Despite a company's best efforts, it is impossible to prevent trust incidents completely. However, companies can prepare—by having a strategy that balances growth, profitability, sustainability and trust. Doing so can mean fewer trust incidents. And, when an incident does strike, the balanced strategy helps minimize its impact.

Know where you stand. The only way to know where your company stands is to measure trust—to bring science to the table.

Make trust part of your cultural bedrock. Your leadership team must embrace trust as a core element of business strategy. All teams—at every level—must walk the talk.

Elevate trust's role in your overall strategy. Some companies make choices to deliver near-term cost savings and profit improvement without considering how they might jeopardize trust. In the mid- and long-term, companies need trust across the stakeholder map to access avenues to growth.

Trust is the furthest thing from a soft corporate issue. It's part of an interdependent strategy that significantly influences your bottom line and competitiveness. Knowing how much is at stake for your company—taking trust and your competitiveness to a forensic level—is becoming the new normal.

The bottom line on trust? It's intrinsically tied to your bottom line. If your company wants to claim true competitiveness, trust must be a critical input and output to your business strategy.

Reach out to our authors to see how trust impacts your company’s bottom line.