Trust, it’s a business asset
Trust. Jack Welch, former Chair and CEO of General Electric, believed it was the only way to get employees to do their best. Yet in turbulent times, and in the face of economic crises, trust is often under threat. How do companies build trust? And when trust is lost, what can be done?
A Harvard Business Review survey of 450 executives from 30 companies around the world found that less than half of them trusted their leaders. And this was 2006, before the Global Financial Crisis.
In a regular UK-based market research survey of trust across a range of professions, conducted by Ipsos-MORI, business leaders consistently score poorly. Only a third of us trust them to tell the truth.
Yet trust is a business asset. And, points out UQ Business School’s Dr Nicole Gillespie, in today’s demanding economic times, with downsizing, redundancies, new technologies challenging business models and continued global financial uncertainties, retaining trust and rebuilding damaged trust must be a business priority.
It’s precisely in turbulent times that trust becomes imperative. Interpersonal trust in the work team, in line managers and the business leader can sustain performance, credibility, workplace morale and, ultimately, productivity, especially when the world outside the company is turbulent.
Trusted leaders, it seems, inspire better performance, and trusted employees deliver more.
This year, the Institute of Business Ethics in the UK, sponsored by PwC, has published a report by Dr Gillespie, a Senior Lecturer in Management at UQ Business School, and Dr Graham Dietz, a colleague at Durham University, that looks at building and rebuilding organisational trust when it’s been damaged.
Trust has three pillars, says Dr Gillespie: technical competence (ability), benign motives (benevolence) and acting according to acceptable ethical principles (integrity).
Transparency, candour and taking responsibility when things go wrong – even when this means apologising and making costly reparations – are the building blocks of a trusting relationship with all stakeholders – employees, customers, the media and suppliers.
Suppressing information, denials, ‘no comment’ or blaming others when things go wrong can destroy trust, heighten cynicism and create further reputational damage.
An independent audit of ethical culture and actions in a company where trust has been breached can be useful says Philippa Foster Back, Director at the Institute of Business Ethics. In a recent blog for The Guardian newspaper, she outlines how to use an audit to rebuild your company’s reputation.
Get an outside opinion – an independent perspective will uncover issues that insiders may miss
Know the values that you are judging ethical performance against
Outline the problem and what you intend the investigation to achieve
Look at culture – how people think and feel and act day-to-day reveals more than any policy document
Face-to-face interviews establish trust and discover more than surveys or other remote techniques
Include stakeholders – what do others think of your company?
What are people saying? Include the press, social media, regulators, etc.
Allow time to listen, and create structured questions to gather empirical data.