Deloitte’s insights and studies never fail to grab our attention here at ILX. If you haven’t already, we highly recommend having a read of their latest free online magazine. One particular article that caught our eye this month is ‘The value of resilient leadership’, an insightful piece about the role of trust in our relationships with organisations and leaders.
The article cites surveys which uncovered that it is commonly believed businesses put profits before people, and indeed before societal impact. Millennials in particular have damaged trust in companies. Just 51% of millennials say business is a force for good, a drastic drop from 76% three years ago. This breakdown in trust is only going to continue to decline and deteriorate if nothing is done to rectify the situation. So, what can be done to renew trust in business?
Trusting relationships do not simply exist. They are earned and established through our daily actions and choices. The article points out that ‘trust is a tangible exchange of value’, a mutual value which works both ways. Only by acting in a trustworthy way can you reap the benefits of trust. And there are plenty of benefits to be gained!
When people trust each other, they work more effectively. They are more productive and better able to handle conflicts maturely. Trust builds loyalty and confidence, benefits collaborative practices, and improves problem solving.
“Therefore, rebuilding the world’s economy, our health and safety, our climate, and human relationships requires a renewed commitment to trust.”
Stakeholders need to feel they can trust leaders, and so leaders must invest in trust. They must take preventative action to avoid breaches of trust, to uphold their reputation, and to reduce the risk of stakeholders defecting to a competitor. But trust is a two-way street, and so, just as leaders are working to be trusted, they too must place trust in their stakeholders. Whether that is investors, customers, employees, communities or other. They must learn beyond addressing their needs, and build an understanding of their vulnerabilities, their wants, and desires. Likewise, leaders must demonstrate vulnerabilities.
“When trust flows in both directions, the stakeholder becomes a vested participant in the success of the organization, not merely a follower.”
Deloitte’s magazine piece addresses how COVID-19 is affecting trust in leader / stakeholder relationships. The pandemic’s disrupted environment is reshaping and transforming physical, emotional, digital, and financial dimensions. And as we return to the office, or not, as the case may be, staff are likely to have varied needs. Leaders must gain an understanding of these needs in order to address specific concerns and build trust.
The pandemic has also brought about major shifts in the digital world, and there are sure to be further shifts still as we head into a ‘post-covid’ world. Many companies see this as an opportunity to make big investments in technology. Some are going through a digital transformation, adopting advanced technologies, or implementing automation.
Change can be unsettling for stakeholders if not handled well with good change management practices. Established relationships of trust with stakeholders, both direct and indirect, can ensure change is handled smoothly. But leaders also need to see this as an opportunity to advance relationships and cultivate mutual trust. Onboarding stakeholder groups ahead of change can ensure commitment and loyalty, and have a positive impact on adoption of technologies, new practices or processes.
Organisations must understand the depth and potential of trust as they head into the future. Stakeholders are far more likely to believe in the organisation's plans for the future if there is a strong foundation of trust. And trust is going to play an increasingly important role in every dimension of business.