I was fortunate enough to attend the Changeboard annual conference recently. The event was themed around trust-building in a “VUCA world”. Most of us in the business world have heard the VUCA term referred to on an increasingly frequent basis. However, for those who haven’t heard it, it stands for Volatile, Uncertain, Complex and Ambiguous. As highlighted by many of the speakers, leaders need to build strong collaborative relationships of trust and mutual respect in order to inspire people to high levels of excellence and build a sustainable people advantage. However, trust in leaders across all spheres of life is falling.
There are numerous reasons for this including ever-increasing expectations, particularly among Millennials, mistrust in ‘the establishment’ on account of fundamental breaches of trust such as corporate cronyism, tax dodging (particularly among big online and digital firms) expense scandals amongst politicians, etc. So what is necessary for leaders to rebuild trust amongst employees and other stakeholders.
A good starting point is to adopt the following 5 principles:
Accept that the nature of trust at work is changing fast
It is important to understand that the complexion of trust is changing fast, both at work and in society generally. Employees, especially Millennials, aren’t willing to blindly accept and trust leaders. In fact, research evidence would suggest they are developing an ever-growing mistrust of authority figures and trust their peers more than the leaders of the company. This is because of the breakdown of the traditional ‘psychological contract’, or the set of beliefs, perceptions, and informal obligations governing the relationship between an employer and an employee. Because this contract governs mutual expectations, it influences how employees behave on a day-to-day basis.
Up until a decade or two ago, most employees trusted their employers to provide secure work, pay and progression in exchange for a loyal service. However, the vast majority of employers can no longer offer such security so this implied ‘contract’ is breaking down. This is likely to be exacerbated in the coming years as the pace and extent of automation and digitization of the workplace accelerates, leaving many employees without jobs. Many Millennials have already seen their parents made redundant which has made them wary of giving their unfettered loyalty and trust to corporations and their leaders.
Place company and societal needs over greed and short-term gains
There are a myriad of recent examples where leaders have placed greed and short-term shareholder returns over goals aimed at bettering society and achieving sustainable growth for their business. A growing number of companies appear to be turning a blind eye to the impact of their short-term and exploitative practices, including using child labour to maximize profits and awarding top executives disproportionately high pay increases, even when shareholder returns diminish. Awareness of these practices among employees, customers and the general public is growing as a result of increased transparency and advances in social media, undermining trust and belief in leaders more generally.
Two recent examples of this was the recent emissions scandal among major auto manufacturers including VW and the exploitation of cheap labour by Sport’s Direct. Behaviour driven by corporate and individual greed will only undermine trust among customers, employees and other shareholders, causing reputational damage that can take years, or even decades, to repair. Any attempt to hide irresponsible and self-serving activity will make the situation even worse as we witnessed in the VW and Southern Rail cases.
Be transparent – don’t underestimate the power of social media
Social media has immense power to expose people and companies which are engaging in exploitative, potentially unlawful or irresponsible behaviour. A recent example of this was the rough and irresponsible way a United Airlines passenger was dragged off the plane when he refused to disembark due to United Airlines overbooking the flight. The story went viral within minutes and rather than apologizing for their mistake, United made it even worse by suggesting the passenger was being unreasonable. Before the digital age, this story would have taken a long time to come to the public’s attention and might never have been exposed. Social media has immense power to expose injustices, exploitation and wrongdoings, undermining not only the trust of employees, but also customers and the general public. Therefore, leaders should ensure all their actions and decisions and fit for public scrutiny and amplify rather than diminish trust and respect.
A good question for any leader thinking about taking a decision that is very risky or potentially damaging to society or one or more groups of stakeholders is: “Would I be happy for my friends and family to see this decision (and the consequences) reported on a major social media platform like Twitter?” Exceptional leaders will not only measure themselves against this standard, but will also ensure their front-line, customer facing employees are empowered to do the same, reducing the risks of a poor decision that will undermine trust, reputation and customer loyalty.
Ensure consistency between words and actions
It is imperative that leaders’ words are matched by reliable follow-through. If they are not, the leader will lose the trust and respect of their followers over time. A good recent example is Trump’s pledge to have a wall built on the border with Mexico (with the Mexicans footing the bill for this). It looks like this will now no longer happen and critics are using it as a major battering ram to attack Trump’s credibility and trustworthiness as a leader. Even little discrepancies between promises and actions can undermine trust as it is a fragile bond, especially during the early phases of a leader’s tenure. Leaders therefore need to take care to honour their commitments and promises in order to earn the trust and respect of their employees and other stakeholders.
Don’t try to shield employees from bad news
I was speaking to a founder of a successful online business recently and he told me that one of the biggest learnings for him was to avoid shielding employees from bad news, as it undermines trust and disempowers employees from being able to provide input to help tackle the problem. It is imperative that leaders adopt an ‘open and honest’ policy when it comes to dealing with negative news such as layoffs, failure to secure additional funding, poor sales performance, etc. In this new digital age, the truth will quickly be outed if they try to hide tough messages from staff, as the rumour mill is now super-charged by online communities and social media. It is clearly always important to judge the timing of the communication in a considered and compassionate manner, however, it is vital to be open and honest when sharing any bad news.
As was pointed out by several speakers during the Changeboard conference, trust is at the heart of effective leadership. However, in a world of unprecedented uncertainty and transparency together with the changing nature of the psychological contract, leaders are struggling to build trust and respect among followers. By being open, transparent and supportive and acting in the interests of the organisation and stakeholders rather than their own self-interest, leaders will increase the chances of building strong bonds of trust with employees (and other shareholders) to unlock employees’ engagement, effort and excellence.