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Global Practices

Three Ways BRIC-Based Companies Can Build Trust

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The “Core Four” (U.S., UK, France and Germany) Western market-driven economies have a message for BRIC-headquartered multinational companies (MNCs): You are state-sponsored forces focused on undermining the core tenets of open competition, transparency and good corporate governance. In a phrase, “we don’t trust you.”

BRIC-headquartered companies and their senior executives should not be surprised. After all, they do come from markets that have long protected their domestic markets while espousing globalization. They do come from markets where the government has worked with companies to further foreign and domestic surveillance. They do come from markets where profit-seeking has been the rule over quality and innovation. They do come from markets where management comes first and workers come last. (Note to reader: Irony intended.)

The unfortunate reality for BRIC-based MNCs in this globalized world is that companies cannot hide from their origins. Huawei is Chinese. Petrobras* is Brazilian. Tata* is Indian. Gazprom is Russian. There is no getting around that or the reputational blanket that comes with it.

Or, is there?

Samsung* and Nissan* are seen as global companies first. Each of these companies – with decades of marketing communications investment and operational discipline – has emerged as a respected global leader in their industries and beyond. The good news here for BRIC-based companies is that, in many ways, Japanese and Korean MNCs have paved the way. The bad news, however, is that BRIC-based MNCs do not have the luxury of time to build competitive global enterprises. Today’s global marketplace is ruled by a real-time, compete-or-die mantra.

C-Suite executives and their communications advisors would do well to heed three principles when approaching the global market:

  1. Invest in Trust over Reputation: Because there is such low familiarity of BRIC-based companies and their brands, the reputations of these companies are largely defined by their country of origin. My firm’s Emerging Markets Trust Supplement, released yesterday, demonstrates that as a significant reputational liability. That said, there is some good news here. Reputation is a historical measure. It is the sum of perceptions of past behaviors. Conversely, trust is the expression of how stakeholders believe you will behave in the future. For individual BRIC-based MNCs, this is an opportunity. The five key pillars of trust are: Operational excellence, purpose beyond profit, quality of products and services, organizational and executive integrity and consistent and meaningful stakeholder engagement. Each of these pillars is easily defined and managed by industry, by geography and by stakeholder group. A disciplined and well-managed approach to trust-building with significant senior executive time commitment and organization buy-in will result in market-based competitive advantage in less time than investing in blanket reputation building.
  2. Acknowledge and Embrace Your Roots: For the immediate future, BRIC-based MNCs do not have the opportunity to position themselves as “global.” The marketplace, as underscored by our study, is largely defining them by country of origin. Instead of trying to work around their roots, BRIC-based MNCs need to acknowledge and embrace them and the advantages they provide. For instance, China has a century’s-old history of innovation; India has a tradition of corporate-sponsored community development; Brazil has soft power cultural attributes; Russia has a leveragable advantage of arts and literature heritage. The point is to marry the trust drivers above with the cultural-advantages to provide a buffer against national baggage while not ignoring heritage.
  3. Stand in Front of the Curtain, Not Behind It: Leaders of BRIC-based MNCs need to understand and embrace the expectations of them in the “Core Four” Western markets. The heart of those expectations is being visible, accessible and leading from the front. This is not a position with which many BRIC corporate leaders are comfortable. Many of these leaders come from cultures where blending in and being soft-spoken is valued more greatly than being vocal and visible… not to mention the obvious language barrier. The reality, however, is that engagement is the most-valued and important driver of trust.

BRIC-based corporate leaders need to embrace the demand on their time and the investment in relationship capital that is necessary to overcome the real and perceptual barriers facing BRIC-based MNCs. A final important takeaway is that the challenges – and biases – related to BRIC MNCs have been faced before by companies from other markets. There is history to learn from combined with data supporting a model that will result in increased trust and better market opportunities.

*Edelman client

Alan VanderMolen is vice chairman, DJE Holdings, president and CEO, global practices.

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