Leaders in search of trust–what are the trust levers?

Trust me I'm your leader“Trust me, I’m your leader.” Once this would have been a sure way to influence stakeholders, such as employees.

No longer. According to the Edelman Trust Barometer, the annual  trust in leaders of all kinds is at an all time low.

45% of people say lack of trust in leadership is the biggest
impacting their work performance.

Over the past 16 years there’s been a steady decline in respect for traditional authority. This has serious implications for how business leaders go about building trust.

For example, one reason the largest high-tech Indian companies have conquered global markets is their focus on ethical behaviour. This has gone down well with clients,  and produced high levels of employee trust.

A theme running through the strategy of many of these companies is their strong commitment to making a social contribution. Their efforts go far beyond the sort of vague corporate social responsibility commitments made elsewhere.

Where do employees trust companies the most


According to the Edelman research, CEOs around the world are not credible. Yet they themselves explain this discrepancy as due to external factors. These include breaches of data privacy, cyber security, IT outages and disruptions.

They do not regard their own behavior as a cause for damaging trust. For example, there’s little self awareness amongst CEOs of the effect created by not trusting themselves to be ethical role models.  This undermines the ethical message, as does failing to trust the company to be ‘good’ corporate citizens.

connecting the dotsUnfortunately, when it comes to building trust, most business leaders have yet to start connecting the dots. This represents not only a lost opportunity but endangers the long-term sustainability of the organization. Trust is not on CEO agendas, at least not in the way that will encourage and support organizational change and higher trust.’
Barbara Brooks Kimmel is the CEO and Co-founder of Trust Across America-Trust Around the World.


What is trust?

What is trust

Does any of this trust stuff matter? How important is it for people to have trust in their business leader? Also, how can leaders build new levels of trust if they want to do so; and are there any reliable trust levers for influencing how the business performs?

These are good questions. Especially when you consider the poor levels of trust that prevail and the costs this imposes on so many businesses, across many nations.

warren buffet“Trust is like the air we breathe, nobody really notices. But when it’s absent everybody notices.”
Warren Buffet


High cost  of low trust

The most obvious cost arising from a basic lack of trust in leaders occurs in the price paid in staff turnover. This often forgotten or ignored statistic, can cause major damage to a company’s bottom line.

For example, Oxford Economics and income protection providers Unum say replacing a single departing staff member can cost a company over £30,000 ($37546).

Ask the average company to quantify it’s staff turnover plus allied costs the answer may be a long time coming. Even assuming such data are available, expect to see a number of around 2 per cent of the total,

In the food industry though, it can reach 50 to 75% . This means within two or three years the entire workforce may be lost and then expensively replaced. The U.S. Bureau of Labor Statistics reports the average yearly turnover in all industries is close to 32 percent.

These figures begin to put the true costs of lack of trust and resulting staff turnover into focus—see for example a simple cost calculator: How much are you losing through employee turnover

The best business leaders therefore take an interest in what creates trust and want to find ways to build it up within their companies.

For example, the 2017 Pwc supplement on business leadership found “CEO concern” for lack of trust in business during the past year had risen from 11% to 19%. That is a sensible concern. People no longer restrict their doubts to questioning their bosses’ benevolence, integrity and consistency. They also wonder whether these same bosses even know how to do their jobs.

The scandal at Volkswagen highlighted the gap that may exist between perception and reality when it comes to trust. The car maker’s leaders often talked about the bond between their employees and the company. Yet none spoke up to help steer the company away from disaster. The loss to reputation wiped a quarter off its share price and caused $40 billion in fines and corrective actions.  

“If you have high trust you will be operationally more efficient…”
V.H.Hatley, Dean, University of Bath School of Management

What are the trust levers?

We’re living in an age of accelerations—globalization, technological and climatic. It’s a period of great uncertainty. It leads many people to feel insecure, and hungry for leaders they can trust.

Younger employees, or millennials respond to these uncertainties by wanting to work for companies with integrity. They look for firms that take ethics seriously as well as being devoted to making profits. Just as demanding are Generation Z, the post millennials.  Only 6 per cent of them trust big corporations and their leaders to do the right thing.

Trust and ethics are inter-dependent and re-enforcing. You cannot have one without the other. Damaging one damages the other. So a leader wanting to build trust must focus on setting the right tone, and acting in an ethical way—to walk the talk. 

Ethical leaders also produce an increase in employee engagement, making them more comfortable at speaking up. This habit can help steer a company away from the rocks that could otherwise wreck its reputation–as VW and Wells Fargo found to their cost.

In the search for levers to develop more trust, leaders can use at least 10 basic ways to make a difference. These are not infallible. Each leader needs to develop his or her own combination that works best for them and their company.

Levers for leaders

Of these, one of the  most important is to pursue ethical business practices, such as promoting an ethical culture. 

Codes, compliance systems and ongoing auditing are widespread. They offer some assurance employees know about doing what’s right. Yet in practice, they may have little real impact on culture or building trust.

Instead, ethical business leaders must identify ethical behavior and prioritise it. In practical terms that means regularly talking about it and making sure such practices actually happen.

What is this ethical behavior? It is promoting and demonstrating sustainable values—ones that stand the test of time. 

They include: honesty, humility, integrity and mutual respect.  Together they prompt behaviours that produce trust, and healthy inter dependencies. They inspire hope and resilience. They help leaders in the face of people behaving badly.

[su_box title=”Aims of Ethics Programs ” box_color=”#6ab3ed” title_color=”#e7cfcf” radius=”4″]Asked about the aims of their most important training program, most ethics and compliance officers (70 percent) also say its creating a culture of ethics and respect.

Training Objectives of E & C Officers

source: Navel Global 


Nor is it enough to assume one is trustworthy and ethical. Instead leaders and their immediate teams need to work on these issues every day. Otherwise they risk being misunderstood and misinterpreted.[spacer height=”20px”]

Business leaders in search of trust must start somewhere. For example promoting sustainable values such as honesty, humility, integrity and mutual respect. 

When that happens it generates trust, and encourages collaboration. “Collaboration moves at the speed of trust”. It means people start to take ownership of problems. They move beyond ordinary engagement, and begin to become ethically engaged.


Trust me I'm your leader


[symple_toggle title=”SOURCES” state=”closed”] Zhu et al, The Impact of Ethical Leadership Behavior on Employee Outcomes: The Roles of Psychological Empowerment and Authenticity, Journal of Leadership & Organizational Studies, August 1, 2004
D. Harris, How to Work with the Biases You Bring to Every Decision, Diversity MBA, 2012
Cultivating Trustworthy Leaders, University of Bath 2014
Edelman Trust Barometer 2016/17
Replacing staff costs British businesses £4bn each year, Daily Telegraph, 8th February 2017
S. Campbell, Replacing staff costs British businesses £4bn each year, Daily Telegraph,24 February 2014
R.Lam, How leaders can enable employees to voice more and quit less, LSE
How much are you losing through staff turnover? Last Opinion
L. Magloff, Employee Turnover in Organizations, 2017
PWC US business leadership in the world in 2017
L. Fisher Thornton, Ethics and Trust, Leading in Context, http://tinyurl.com/jg56zbc
T.Friedman, Thanks for Being Late, Allen Lane, 2016 
2016 Ethics & Compliance Navewx Training Benchmark Report
C. Warren, Truth and Consequences, Work, CIPD,  Autumn 2016 [/symple_toggle]


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