 "The business case for trust")
The 2015 Edelman Trust Barometer, covering 27,000 people across 27 countries, states that trust in the credibility of CEOs as the spokespersons of business stands at a mere 43 per cent; and the 2010 MaritzPoll conducted by Maritz Research reports that only 7 per cent of employees strongly agreed that they trusted senior leaders to look out for their best interest and well being. The studies sadly point to a chorus of a deficit in trust - the foundation of any relationship.
Author Stephen MR Covey offers compelling evidence in his book The Speed of Trust, to show that high trust levels necessarily translate into high speed and low cost whether in a business or a personal scenario. For instance, organisations typically incur considerable expense in administering and monitoring sick leave. Yet there are others that allow unlimited leave, trusting employees to use their judgement. Similarly, Bob Gaudio and Frankie Valli of the legendary band, The four Seasons, had struck a remarkable deal in 1964 when they agreed to split every penny of their career earnings in a 50-50 ratio, regardless of who pulled in the moolah. This simple handshake deal obviated the need for any prolonged and expensive legal paperwork.
Clearly trust is not just a nice-to-have concept, it is an asset backed by a strong business case. High-trust organisations, by encouraging people to go the extra mile and put in more than their 100 per cent, foster higher productivity, collaboration and innovation, and such organisations, according to a 2002 Watson Wyatt 2002 study, outperformed low-trust organisations in terms of shareholder return by 286 per cent.
The modus operandi of building trust
Leaders inspire trust when they are seen standing by their values no matter how extenuating the circumstance. For instance, during the third one day international cricket match between Australia and New Zealand in 1981, when New Zealand needed six runs to tie the match from the final ball, the Australian captain, Greg Chappell, had instructed his bowler to bowl underarm, rolling the ball along the ground leaving the batsman with no chance of hitting a six. While this action was legal at that time, it was seen as overstepping the line of integrity and fair play.
Speaking at the Wharton India Economic Forum, APJ Abdul Kalam alluded to an incident during his stint at the Indian Space Research Organisation in 1979. When the first ever attempt to launch a satellite into orbit had failed, his boss, Satish Dhawan, the chairman of ISRO, had opted to address the press conference, taking responsibility for the failure. The following year, however, when the launch was successful, he had asked Kalam to conduct the press conference. This simple act of taking ownership during adversity and sharing the spotlight in the moment of success speaks volumes about his character.
Similarly, Arvind N Agrawal, president, corporate development and human resources, RPG Enterprises, recalls a time when working under a stringent time line to recruit for the position of executive director, the candidate being interviewed had inquired about the scope of making it to managing director in future. He had responded by saying the chances seemed remote, since an existing executive director was being groomed for the position. The candidate had not taken up the offer, but had stepped out appreciating the strong character he had perceived both in the fabric of the organisation and its spokespersons.
There are a number of such moments in a leader's career when he has a choice of either reinforcing trust by doing the right thing, or undermining it by taking the easy route. When the leader engages with integrity and character, people follow suit. A new research study by KRW International, a Minneapolis-based leadership consultancy, shows that companies whose CEOs were ranked high for character had an average return on assets of 9.35 per cent over a two-year period, which was almost five times that of companies with lower character ranking where the comparable number stood at 1.93 per cent.
Trust begets trust
When a leader helps a person realise his potential by pushing him into unchartered territory, the person is bound to reciprocate the trust by living up to his expectations. Bobby Parikh, chief Mentor, BMR Advisors, recalls a boss early in his career who made it a practice of assigning him jobs that entailed an experience profile several notches higher than his own at that time. This seemingly unreasonable act of throwing him in deep waters went a long way in catapulting him beyond his zone of comfort, achieving feats ostensibly unattainable at that point. It reinforced his trust in his boss.
Chandrashekhar Mukherjee, chief people officer, National Stock Exchange of India, says that much to the astonishment of his team, when he stopped the usual practice of scrutinising documents brought to him for his sign off, the team reciprocated the trust by carrying out a more thorough due diligence.
Another obvious dimension of trust pertains to the track record of the leader in delivering results, emanating from his ability to leverage opportunities and build relationships and influence stakeholders to the advantage of the team. Bill McDermott, CEO, SAP, recounts the time in his book Winners Dream, when as a young manager at Xerox he had set an audacious team goal that entailed each team member making it to the President's Club, a grand annual trip for top performers, that year. Circumventing the naysayers, he had laid out a meticulous plan, demystifying sales, cross pollinating talent and fostering collaboration. The actual achievement steered the team's trust in its leader manifold.
Communication
Employees need to be informed; information provides a sense of security, trust and identification with the company, remarked Helmut Maucher, former chairman and CEO of food company Nestle, in his book Leadership in Action: Tough-Minded Strategies From the Global Giant. It is important for leaders to engage with transparency and openness, minimising the 'say-do' gap, listening to employees proactively, and offering updates on opportunities, challenges, structural reorganisation through formal lines of communication like town halls, senior leadership coffee forums and other communication platforms.
A participant at my leadership training class had related an anecdote where the tradition of giving an annual bonus in his company had been violated one particular year, triggering an environment of scepticism and discontent. Taking cues from the rumour windmills around downsizing and financial instability, people had started quitting the organisation. Six months later, however, the bonus was reinstated. It is apparent that this unfortunate turn of events could have been forestalled through an open and timely communication by the leadership.
Conversely, during the thick of the 2008 economic meltdown, the leaders at a Fortune 500 company that I was working for were proactive in their communication around the events being played out on the global stage, and the actions being taken by the leadership team to steer the firm to safe waters, invoking trust and confidence in employees.
Trust deficit, emanating from a lack of communication, lies at the root of most personal and interdepartmental conflicts; and initiating a dialogue to understand the other person's context and sharing your own perspective, is crucial in building trust, says Munish Sharda, managing director and chief executive officer, Future Generali.
Author Stephen MR Covey offers compelling evidence in his book The Speed of Trust, to show that high trust levels necessarily translate into high speed and low cost whether in a business or a personal scenario. For instance, organisations typically incur considerable expense in administering and monitoring sick leave. Yet there are others that allow unlimited leave, trusting employees to use their judgement. Similarly, Bob Gaudio and Frankie Valli of the legendary band, The four Seasons, had struck a remarkable deal in 1964 when they agreed to split every penny of their career earnings in a 50-50 ratio, regardless of who pulled in the moolah. This simple handshake deal obviated the need for any prolonged and expensive legal paperwork.
Clearly trust is not just a nice-to-have concept, it is an asset backed by a strong business case. High-trust organisations, by encouraging people to go the extra mile and put in more than their 100 per cent, foster higher productivity, collaboration and innovation, and such organisations, according to a 2002 Watson Wyatt 2002 study, outperformed low-trust organisations in terms of shareholder return by 286 per cent.
The modus operandi of building trust
Leaders inspire trust when they are seen standing by their values no matter how extenuating the circumstance. For instance, during the third one day international cricket match between Australia and New Zealand in 1981, when New Zealand needed six runs to tie the match from the final ball, the Australian captain, Greg Chappell, had instructed his bowler to bowl underarm, rolling the ball along the ground leaving the batsman with no chance of hitting a six. While this action was legal at that time, it was seen as overstepping the line of integrity and fair play.
Speaking at the Wharton India Economic Forum, APJ Abdul Kalam alluded to an incident during his stint at the Indian Space Research Organisation in 1979. When the first ever attempt to launch a satellite into orbit had failed, his boss, Satish Dhawan, the chairman of ISRO, had opted to address the press conference, taking responsibility for the failure. The following year, however, when the launch was successful, he had asked Kalam to conduct the press conference. This simple act of taking ownership during adversity and sharing the spotlight in the moment of success speaks volumes about his character.
Similarly, Arvind N Agrawal, president, corporate development and human resources, RPG Enterprises, recalls a time when working under a stringent time line to recruit for the position of executive director, the candidate being interviewed had inquired about the scope of making it to managing director in future. He had responded by saying the chances seemed remote, since an existing executive director was being groomed for the position. The candidate had not taken up the offer, but had stepped out appreciating the strong character he had perceived both in the fabric of the organisation and its spokespersons.
There are a number of such moments in a leader's career when he has a choice of either reinforcing trust by doing the right thing, or undermining it by taking the easy route. When the leader engages with integrity and character, people follow suit. A new research study by KRW International, a Minneapolis-based leadership consultancy, shows that companies whose CEOs were ranked high for character had an average return on assets of 9.35 per cent over a two-year period, which was almost five times that of companies with lower character ranking where the comparable number stood at 1.93 per cent.
Trust begets trust
When a leader helps a person realise his potential by pushing him into unchartered territory, the person is bound to reciprocate the trust by living up to his expectations. Bobby Parikh, chief Mentor, BMR Advisors, recalls a boss early in his career who made it a practice of assigning him jobs that entailed an experience profile several notches higher than his own at that time. This seemingly unreasonable act of throwing him in deep waters went a long way in catapulting him beyond his zone of comfort, achieving feats ostensibly unattainable at that point. It reinforced his trust in his boss.
Chandrashekhar Mukherjee, chief people officer, National Stock Exchange of India, says that much to the astonishment of his team, when he stopped the usual practice of scrutinising documents brought to him for his sign off, the team reciprocated the trust by carrying out a more thorough due diligence.
Another obvious dimension of trust pertains to the track record of the leader in delivering results, emanating from his ability to leverage opportunities and build relationships and influence stakeholders to the advantage of the team. Bill McDermott, CEO, SAP, recounts the time in his book Winners Dream, when as a young manager at Xerox he had set an audacious team goal that entailed each team member making it to the President's Club, a grand annual trip for top performers, that year. Circumventing the naysayers, he had laid out a meticulous plan, demystifying sales, cross pollinating talent and fostering collaboration. The actual achievement steered the team's trust in its leader manifold.
Communication
Employees need to be informed; information provides a sense of security, trust and identification with the company, remarked Helmut Maucher, former chairman and CEO of food company Nestle, in his book Leadership in Action: Tough-Minded Strategies From the Global Giant. It is important for leaders to engage with transparency and openness, minimising the 'say-do' gap, listening to employees proactively, and offering updates on opportunities, challenges, structural reorganisation through formal lines of communication like town halls, senior leadership coffee forums and other communication platforms.
A participant at my leadership training class had related an anecdote where the tradition of giving an annual bonus in his company had been violated one particular year, triggering an environment of scepticism and discontent. Taking cues from the rumour windmills around downsizing and financial instability, people had started quitting the organisation. Six months later, however, the bonus was reinstated. It is apparent that this unfortunate turn of events could have been forestalled through an open and timely communication by the leadership.
Conversely, during the thick of the 2008 economic meltdown, the leaders at a Fortune 500 company that I was working for were proactive in their communication around the events being played out on the global stage, and the actions being taken by the leadership team to steer the firm to safe waters, invoking trust and confidence in employees.
Trust deficit, emanating from a lack of communication, lies at the root of most personal and interdepartmental conflicts; and initiating a dialogue to understand the other person's context and sharing your own perspective, is crucial in building trust, says Munish Sharda, managing director and chief executive officer, Future Generali.
Charu Sabnavis
Founder director, Delta Learning
Founder director, Delta Learning