Making trust a strategic objective can help you enable your organization to achieve its aspirations, improve performance, and generate value.
Written by: Michael Bondar and Don Fancher (Are you the author?)
Trust in an organization is an ongoing relationship between an entity and its various stakeholders—and is earned through that entity’s actions. Those actions, however, cannot be strictly embodied in a crisis response strategy to address a trust breach. Instead, by investing in trust proactively, organizations can build “trust equity”—a reserve of trust that can not only improve performance and generate value on an ongoing basis, but also allow the organization to be more resilient when a crisis inevitably hits. Managing these trust-based relationships starts at the very top and requires the focus and attention of the C-suite.
The disruptive events of the past year have shined a bright light on the power of trust, revealing the central roles of transparency and consistency in cultivating it in organizations. (Think vaccine efficacy, for example.) Global and societal challenges have also reinforced how intangibles, rather than physical assets, often lead to value creation. In other words, the stronger the relationships organizations have with their stakeholders, the more trust is generated.
Still, the social contract between many organizations and their stakeholders remains frayed. In fact, the 21st annual Edelman Trust Barometer, which drew responses from more than 30,000 global respondents, tracked a precipitous drop in trust between May 2020 and January 2021. Among institutions, government took the biggest hit. Trust in business, however, dropped less than in other studied organizations—a finding that suggests companies may have reached a critical juncture where investing in trust may pay off in increased credibility with stakeholders.
For C-suite leaders, this juncture presents an opportunity to fill the trust gap—by actively managing it. To start, leaders and their organizations can build and maintain trust by acting with competence and intent. Competence refers to an organization’s ability to execute and deliver consistently on its promise of the provision of goods and services; equally important is the intent behind those actions—making decisions from a place of genuine empathy and care for the wants and needs of stakeholders. When leaders commit to embedding these tenets into their organization’s culture, purpose, and operations, companies can outperform their competitors. Making trust a strategic objective
Setting a tone of trust
Many C-suite executives whose companies have weathered the pandemic successfully recognize the importance of trust. In the 2021 Deloitte Global Resilience Report, based on a survey of 2,260 C-level executives and senior public sector leaders, trustworthiness was one of five key characteristics of resilient organizations, enabling businesses to bounce back from unexpected challenges. The study also examined three key areas where trust can be improved, finding that leaders were making progress in some areas, while needing to make improvements in others:
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