This presents a powerful opportunity – an obligation even – for business leaders, but heightened expectations bring risks too. Trust matters most during times of uncertainty, and that is the constant state in which we find ourselves today. Take the intimidating speed of technological advancement, for example; people need to believe as we continue forward into the unknown that leaders will act with integrity, goodwill and transparency.
How have trust levels changed since the pandemic?
Our original research tracked the impact of the pandemic on trustworthy leadership. We found that, in the first year of COVID-19 (2020), trust in business and leaders rose. This was driven in part by the admirable response of many organisations when it came to looking after the needs of their multiple stakeholders, from employees to suppliers, customers and communities.
However, as the pandemic dragged on, things became more challenging. Trust started to dwindle. Some organisations began to behave less responsibly, additional external challenges like Russia’s invasion of Ukraine had a profound macroeconomic impact and, as we explored in our last article, the expectations of employees and employers began to diverge. Recent high-profile scandals and leadership failures in organisations tarnished things further. This all means that we are seeing more mistrust creeping into relationships on an individual and an organisational level.
The pillars of trust
People judge the trustworthiness of our leaders by four criteria, as described in our 2021 responsible business report:
- Ability: Have they got the right competencies and abilities to do their job?
- Benevolence: Are they bothered about others or entirely self-interested?
- Integrity: Are they guided in their decisions and actions by a moral code?
- Predictability: Can people see a consistency in their approach?
Lapses in ability can be forgiven: we are all only human after all. But betrayals of integrity and benevolence can destroy trust, and fast. As an old Dutch proverb puts it: “Trust comes on foot but leaves on horseback.” In other words, trust is hard to gain but all too easy to lose.
When the rulebook doesn’t give you any answers (such as during an unforeseen pandemic), it becomes the ultimate test of whether the organisation has developed a cadre of senior leaders who know what the company stands for, who have a sense of personal integrity and a shared sense of what the right thing to do is in a situation where there is no certainty. Increased regulation and monitoring are often a knee-jerk reaction to failures, and are of course necessary in many industries, but they alone are insufficient. Individual leaders need to know the right thing to do to maintain trust in challenging circumstances: something that goes beyond rulebooks and codes of conduct and into a deep and genuine personal sense of responsibility and obligation to others.
Has the way we build trust changed?
In our accompanying podcast, Brad Greve, CFO of BAE Systems, describes the decision his business took in 2020 to delay paying the shareholder dividend, instead prioritising keeping the businesses in its supply chain solvent. His recollection of making that decision is simple: “We didn't feel at that time it was right to pay a dividend and our shareholders had to understand why we made this decision… they trusted us to make the right decision, and we did.” (BAE paid the dividend three months later, as more clarity emerged.)
With the world of work undergoing profound shifts, has how we build trust changed?
There can be no doubt that the amount of time we all spend online and the ubiquity of social media in our work and personal lives has shifted how we relate to each other. And at its heart, trust is relational. Followers as well as leaders have a role to play in creating high-trust environments: people need to be willing to trust and to forgive the occasional misstep in ability or competence, especially when accompanied by a genuine and transparent apology.
As a society, we have become increasingly judgemental, but in high-trust environments, both leaders and followers understand it is sometimes best to suspend judgement and draw on empathy instead. Whether in person or remotely, the focus needs to be on building human relationships and vibrant communities – work environments in which people can disagree respectfully and still trust each other to do the right thing.
Greve reflects that the future (and present) of responsible business is “about cultivating deep relationships and building mutual value”. Those relationships are nothing without trust.
In an age of pervasive and growing mistrust, leaders and followers need to turn inward to reflect on how to prevent the trust we do have galloping off into the sunset.
