Why We Don’t Trust Companies Part IV: The Solution
My last three posts – here, and here, and here – were about why we don’t trust companies. To review the bidding, I’ve said it’s because:
- Trust is predominantly personal in nature – a fact most companies don’t recognize
- Corporate missions, motives and mindsets are all tainted by zero-sum, competitive ideologies
- Trust requires risk, while companies abhor risk.
Stripped down – companies see trust as impersonal, ideologically suspect, and too risky.
Now, if I am right about that, then we would want to see solutions in the business world that recognize the personal nature of trust, incorporate trust-enhancing ideologies, and embrace risk-taking to enhance trust.
Surprise surprise – that’s not what we see.
The dialogue about corporate trust is consistently mis-framed. It is not companies that trust, or are trusted. It is the people in the companies who trust, or are trusted. The challenge is not to make companies trust or be trustworthy – it is to create corporate environments in which people can trust and be trusted.
In the trust game, the company is an agent, an enabler – not a primary actor.
The Usual Recommendations to Increase Corporate Trust
I spend a lot of time reading reports on how trust in business can be improved. Here are a few examples;
- an Arthur Paige Society report on The Dynamics of Public Trust in Business;
- Gallup on Rebuilding Trust in Banks;
- a 2013 Edelman PR piece, Trust in Financial Services Still Ranks Low;
- a Wharton/State Street bank study called Bridging the Trust Divide.
Believe me, there are hundreds more.
These are all reasonably good pieces of work (there are certainly worse). But even from these top-drawer sources, the top-line recommendations are bloodless, abstract, and cold – because they’re focused at the corporate level. (Curiously, the right answers in all four of these cases are in fact contained in the reports – they’re just buried deep.)
Typical topline recommendations look like these (taken from the sources above):
- Increase adherence to ethical codes and standards
- Create a set of values that define and clarify what your enterprise and its people are at root, and work to ensure that these values are adhered to consistently across your enterprise.
- A well-defined, repeatable roadmap for the conversation…more transparency about fees and costs
- Communicate frequently and honestly on the state of the business.
Again – there’s nothing wrong in these recommendations. But taken alone, they are sleep-inducing; they sound like Charlie Brown’s teacher’s Mwah, Mwah, Mwah.
Where is the personal? The belief system? The risk-taking? Where’s the people?
The Right Answer for Increasing Corporate Trust
Again, not that there’s anything wrong with the suggestions above, but they don’t get to the heart of the matter. Here are some recommendations that do.
1. Trust is personal – so lead by example.
Role model it. Everyone, not just the top leaders. And to be sure what “it” is, identify hundreds of situations and the appropriate responses for each (not to memorize, but to ensure understanding). Talk about them – endlessly. Get coaching. Do brainstorming sessions. Talk about what you’re doing with employees, and with customers. Identify key vocabulary terms you’ll use, and use them. Publicly praise and private counsel appropriate personal examples of trust-based interactions.
The way to get a trust-based company is not to fix the company – it’s to fix the people and the environment they live in so that the people can trust and be trusted in all their affairs.
2. Articulate and preach the trust ideology.
Reject zero-sum thinking. Think long-term relationships, not short-term transactions. Make transparency a default state in all conversations (except where illegal or harmful). Emphasize win-win solutions with customers, employees, and other stakeholders. Believe that trust relationships are more profitable over the medium and long-term, that they are complementary not opposed to corporate success.
3. Teach Social Risk-taking
People can’t learn to trust if they have no degrees of freedom to do so. People are more likely to be trustworthy if they are trusted. Human relationships are formed by the constant reciprocal taking of small risks; the result is long term risk mitigation.
There are personal relationship skills that drive trust. They can be taught, and the teaching of them gets to the heart of a trust-enhancing organization.
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The route to a high-trust organization is through its people. That route starts not with corporate policies per se, but with human interactions.
Charlie,
I like this….and have liked the whole series. That said, I believe what you are moving toward is what I’ll call “organizational trust”. To me this is a cultural aspiration, something that an organization works toward but understands that it can never fully achieve. Companies are made up of people, individuals with all their strengths and weaknesses. There will be some who will be more trusting and trustworthy than others. A top-down, zero-tolerance culture of transparency, integrity and trust will bring out the best in people, but for some people their best simply isn’t good enough. From my perspective, there is no more effective action management can take than instant termination of a top-performer who violates the company norms of integrity and trust. At the same time, “second chances” for minor deviations can send a message that we can all do better.
It is important however, for the company leadership to understand that being trusted is aspirational rather than a state of being and acknowledging that to employees, customers and others who interact with the organization. Saying, “this is who we want to be” rather than “this is who we are” will be much more believable to all.
Rich
Rich, that makes a lot of sense to me. Especially your suggestions that it be considered aspirational, and that zero tolerance is the way to go.
And those thoughts are so different from the way trust usually gets talked about. Thanks for saying it.
You are absolutely right to state that trust comes from the top down. An organisation that demostrates trust from the top, nurtures trust and relationships down through all its employees.
Creating policies and rules to force trust really doesn’t do the job OR demonstrate and understanding of the nature of trust and business relationships. An example of this plan would be what happened when more than 50% of Members of the UK paliament had to return expenses they had wrongfully claimed. (The worst of these even went to prison for fraud!) So they created new rules and a new organisation to monitor it all. Completely sidestepping the core issue – we rightly expect our leaders to be ethical, honest and demonstrate inherent integrity. Passing new rules seems to say, we will steal and lie unless you introduce rules. So we continue to distrust politicians because they have effectively said they will do as they please unless stopped by a rule.
Trust in any organisation is the same – creating rules and polies to try to make it happen, seems to say, distrust, cheating, and trick selling, is the norm we need to change.
Robert Heller, the prolific busiess author, once told me that organisations change by changing the behaviours – not policies. You change behaviour by rewarding what you want and punishing what you don’t want. Clearly that means diciplining those who breach the trust ethic and even sackings for those who demostrate a pathological need to behave like canivours with customers.
So far we see little evidence of this happening in large organisations and customers continue to treat these organisations with caution. Numbers still dominate the agenda with short term focus. Maybe we need a fundemental change in corporate law to make trust and integrity a priority. Certainly the removal of Limited Liability and the risk of losing your personal wealth would have had a considerable effect in the recent banking scandals. When organisations are not held to account for dishonesty we are back to the written rules approach to creating integrity. We’ll need to get back to root causes before any of this changes – that mean reintoducing personal gain and personal risk associated with trust within corporate legislation. Thesee guys at the top are playing a money game within a loose sset of rules – change the landscape and introduce more personal risk and trust and integrity will come to the fore again as it was centuaries ago before we de-risked corporate leadership.
Chris, thanks for this. I of course agree with your diagnosis, but your prescription is quite different – reinstitute personal risk, even perhaps through corporate law. That makes a lot of sense too, I want to ponder that more.
Thanks.