A question of trust?

Bernie Ebbers, Dennis Koslowski, Kenneth Lay and Jack Welch have one thing
in common – they are all business leaders who in one way or another, broke the
trust we held them in. And trust matters. In The Guardian and The Observer
newspapers, trust is mentioned, on average, about 17 times a day, compared with
a mere six times a week only five years ago.

Nurses, doctors, firefighters and the police still tend to be the most
trusted groups, with between 60 and 80 per cent approval ratings. As the MORI
poll shows, even civil servants get more than 40 per cent approval ratings. But
critically, the groups at the foot of the table in these surveys are business
leaders, journalists and politicians.

If the groups that dominate the shape, tone and content of our public
discourse are the least trusted, then it is disfigured to the same degree.
Leaders who forfeit our trust pay a heavy price. In organisational terms,
creating a trust gap can spell disaster. For those who work, trust is the
essential glue that makes their work tenable. For organisational leaders, this
is doubly so.

But trust in business is falling. Across the EU, 54 per cent of people say
they don’t trust big companies, while in the UK, only one in four say they
generally trust business leaders to tell the truth. And in the US, where
business has traditionally been more favourably received, trust in business has
fallen to record lows.

So leaders need to introduce extrinsic and intrinsic reasons for themselves
and their firms to be trusted. Intrinsic reasons are things like their
personality, their values, and their rhetoric; extrinsic reasons include what
other relationships they’re involved in, why they may honour promises, and what
others have said about them.

Again the evidence points to the key role of trust in generating the
intellectual and social capital on which so much depends. A recent PricewaterhouseCoopers
survey of 300 large companies showed that high levels of trust were an
essential driver of innovation in those organisations. Yet, NOP found recently
that 80 per cent of British workers lack any real commitment to their jobs. And
The Work Foundation’s research has shown alarming falls in employee motivation,
trust and loyalty.

And to the extent that organisations are held together by social capital,
this matters. Once trust is eroded, this crucial glue starts eroding as well.
The impact on recruitment and retention is obvious, but weaknesses arise in
more insidious ways – the organisation slows down. The implementation of
decisions weakens as a distrusting environment means people wait for directions
rather than act on their own. A blame culture inhibits individual initiative.
It becomes harder to delegate and give autonomy. But, emphasising trust and
letting go this much is the antithesis of how most leaders see their roles.

Leaders need trust. Complex, dynamic, network organisations cannot operate
without it. Leaders’ reputations, the clarity, timing and comprehensiveness of
communication with stakeholders and their ability to delegate and devolve, all
help build trust externally and internally.

Modern communications technologies, better – informed workers, increased
competition and more complex ways of adding value have placed a premium on the
‘trustworthy’ leader. Pulling the internal and external levers to achieve that
trust is rapidly rising up the list of managerial concerns.

By Will Hutton, Chief executive, The Work
Foundation                 

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