EngagementWhy it’s time to rethink the importance of trust

Why it’s time to rethink the importance of trust

HRD Thought Leader Terence Mauri outlines the importance of trust, including why it's a major influence on employees, leaders and customers

Trust is key to survival during organisational uncertainty, volatility and change. Whether this comes down to technology, the race to reskill or diversity, Hack Future Lab founder, HRD Thought Leader and global management thinker Terence Mauri sets out why it’s time to rethink the importance of trust in sustaining an inclusive, human-led and sustainable future.

Is it time to rethink the importance of trust? Trust is the basis for clarity and connection, and it’s the foundation of every leadership action, relationship and transaction. Customer. Employee. Digital. Financial. Ethical. A nice-to-have is now a must-have; a value is invaluable.

Yet, around the world, we see truth decay and record levels of distrust across business, government and the media. At no time has trust been more tested or more valued by our customers, our leaders and each other.

Hack Future Lab’s Truth Decay study has identified that despite trust in the workplace being a key driver of wellbeing, motivation and performance, only 44% of employees feel they are ‘often’ or ‘always’ trusted by their managers.

The data should set alarm bells ringing, especially when trust has never been more important for morale, productivity and psychological safety. Trust is the number one driver of commitment and contribution, and is a catalyst for moving from outdated boss-led leadership models to a style of leadership which I define as human-led, tech-enabled; intentionally diverse; purpose-driven; built for trust.

Key findings

  • 93% of leaders agree trust is a top priority, but only 34% believe it is a strength in their workplace
  • 93% of respondents agree that without trust, it’s impossible to speak up about issues or ideas that matter
  • 89% of respondents have withheld an opinion, question or concern because of fear and a lack of workplace trust
  • 86% of respondents want more truth, trust and transparency at work
  • 83% of respondents agree trust between them and their manager is the second biggest driver of life satisfaction after mental health
  • 76% of people want CEOs to speak up and lead on societal issues such as the pandemic’s impact, job automation and diversity
  • 63% of people have experienced a major ‘trust’ breach: the three biggest examples of trust breaches were lack of feedback, lack of autonomy and lack of transparency
  • 58% agree today’s business models are ‘broken’
  • 46% of leaders agree they don’t understand the mechanics of how trust is built, managed, lost and repaired

The commercial and human implications of truth decay are significant, with the impact on businesses alone estimated to cost organisations over $1.5 trillion globally. Trust was historically considered a ‘soft’ corporate issue. Its connection to a company’s value was always there, but unclear.

The writer George Orwell would have relished these times. Fake news, false facts, meme warfare, data breaches, tainted food and digital skulduggery. To put this into monetary terms, a $30bn retail company will, in theory, lose $4bn in future revenue due to a loss of trust.

According to Hack Future Lab, 10 out of 15 industry sectors have reported a decline in trust over the last three years, and there are plenty of examples to explain why.

Consider the 2015 VW diesel emission scandal, the Boeing Max 737 crashes, the McKinsey opioid settlement; last year, the once high-flying payment processor Wirecard crashed into insolvency after admitting that €1.9bn in cash was missing, and that large parts of the business had been misrepresented.

With truth decay on the rise, can HR and business leaders rebuild years of eroded trust? According to Edelman’s Annual Trust Barometer, 58% of people do not believe today’s organisations are fit for purpose, and 1/3 of employees believe their job will not exist in a few years, due to AI and automation. Now is not the time to adopt a ‘wait and see’ strategy.

As beacons of trusts, leaders need a more expansive view about their mandate, and should make trust a priority across competence and reliability – how you do things – and integrity and empathy – why you do things. It’s time to reassess and reaffirm the importance of trust as a leaders’ North Star for leadership success.

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Here are three imperatives for HR and business leaders to prioritise trust alongside growth and profitability.

1. From ‘me’ to ‘we’

Why is it that only five percent of nations are led by women and less than three percent of CEOs on the FTSE 100 Index are women? It’s impossible to harness trust if women are ignored as potential future leaders in organisations. To thrive, every organisation must prioritize three things:

  • Differences: Do you focus on optimising differences, not difficulties?
  • Divergent thinking: Do you like ideas that make you feel good or make you think hard?
  • Diversity: Do you lead with the mindset that diversity is a fact but inclusion is a choice?

What’s more, the global pandemic and accelerating shift from doing digital to being digital has highlighted that current ‘business first’ leadership models that prioritise compliance are broken, and has provided an opportunity to reset to ‘human-first’ leadership, which prioritises value creation and ultimately personal contribution. This inclusive mindset shift includes:

  • Less micro- and more macro-managers
  • More ethical leaders, such as Jacinda Ahern and Angela Merkel
  • Leading with humanity

Leaders who are the most trusted capture the most value when difference, divergent thinking and diversity is not just a set of beliefs but is recognised and celebrated. It’s clear to me that people want values and value at work, and that this starts by moving from an ego (me) to eco (we) mindset.

2. Lead with trust

The global pandemic turned our world upside down and accelerated disruption, from the blurring of industry lines and economic and geopolitical uncertainty, to disruptive technologies and the shrinking of company and product lifespans. As we transition to new ways of leading, there is fear and excitement. In the short term, from the unknown business fallout of a pandemic and, in the medium term, from the continued impact and opportunities of AI, robots and automation. Hack Future Lab’s research shows that 83% of leaders see trust playing a far greater role in sustaining a thriving workforce in a post-COVID world.

As leaders prepare to return employees to the workplace, they must ask the question: ‘How do we cultivate a high-trust and energised workforce willing to own the transformation journey, and be resilient enough to handle the challenges brought by disruption?’ Organisations such as games developer Roblox and e-commerce leader, Square, report that high-trust employees are:

  • Two times more likely to say their organisation is transparent about which jobs will change, and rank uncertainty last in reasons for feeling burnt out.
  • Five times more likely to act as an early warning system for leaders when companies are operating at the edge of ethics, as they are more likely to speak up and call out issues.
  • Three times more likely than distrusted employees to be excited about the prospect of reskilling and three times more likely to be satisfied with the company, with no plans to leave.

3. Don’t go it alone: co-create for trust­­

At this time of unrelenting change, leaders may find themselves alternating between three distinct phases depending on the course of the pandemic:

  1. Recover revenue
  2. Rebuild operations
  3. Reimagine relevancy across growth, culture and leadership

Hack Future Lab’s research shows that the best leaders go big on truth, transparency and trust, and place ethical drivers at the heart of their leadership style.

Accelerators of trust

  • Structure and clarity
  • Meaning, purpose and alignment
  • Network over hierarchy
  • Fallibility, vulnerability, and interpersonal risk
  • Listening, empathy and compassion

Blockers of trust

  • Positional power, bossed, top-down
  • Back channels, guarding, hiding
  • Closed to feedback and listening
  • Avoidance, indifference, ambiguity
  • Lack of ‘why’, misaligned work/direction

Hack Future Lab’s research shows that leaders who unlock trust have made the decision to transition from command-and-control leadership to care and co-creation. Not only that, they are more energising to work for and more resilient in the face of adversity. Now it’s the people delivering the experience who are driving the advantage — and the differentiator for them, too, is trust.

Who do you trust?

Trust is the number currency for winning a inclusive and sustainable future. Without trust, relationships break down, organisations stop working, and societies fail. In an age with record levels of distrust brought on by social tension, economic nationalism and technological revolution, it’s time for leaders to re-assess how to bake trust into the DNA, strategy and day-to-day operations of their business.

Additionally, it’s vital to measure, amplify and sustain trust across the whole stakeholder mix, from employees to customers, suppliers, investors, analysts and the media. Put trust at the forefront of your leadership, strategy, and purpose, and your customers and people will put trust in you. Are you ready to rethink the importance of trust?

Terence Mauri is the founder of Hack Future Lab, a global management think tank and a leading management thinker on the future of leadership and trust. His new book The 3D Leader: Take your leadership to the next dimension is out now.

Subscribe to HRD Connect for daily updates on the future of work, including thought leadership, video interviews, the HRD Live Podcast and more.

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