Trust Across America-Trust Around the World™

Has CEO compensation destroyed trust in corporate America?

Will the real root cause of the destruction of trust please stand up. While many blame Wall Street and the financial meltdown in 2008, trust began to gasp for air many years earlier. The financial meltdown just added a nail to the coffin.

Trust had a quick descent  in the 1990’s with the explosion of stock option grants and an increased focus on shareholder value. In fact, By 2000, stock options accounted for more than half of total compensation for a typical S&P 500 CEO.

Over the 14-year 1992-2005 time period, the average US S&P 500 company awarded over €1 billion worth of
options to its executives and employees (or €500 billion across all 500 companies). Moreover, the average S&P 500 company transferred through options approximately 25.6% of its total outstanding equity to its executives and employees (Murphy, Jensen and Wruck (2011).

And lest we forget the accounting scandals like Enron, Sarbanes Oxley, pay for performance, options backdating and Dodd Frank, perhaps sealing the fate of trust for good. Unfortunately, regulation is punitive and does little if anything to create value or trust. For those interested in read more about the global history of CEO compensation and it’s impact on trust, this is an excellent paper.

A more recent July NY Times article written by Eduardo Porter called Motivating Corporations to Do Good contains the following:

In 1993, some 20 percent of executive compensation was based on stock, according to Lynn Stout of Cornell Law School. Today, equity accounts for about 60 percent of the remuneration of executives at companies in the Standard & Poor’s 500-stock index. With so much money tied up in stock options and the like, it is not surprising that executives will do almost anything to give their share price a boost regardless of what costs this might incur after their options have vested. (and regardless of how much trust must be compromised along the way)

And finally, as described in this September article in The Week, written by James Pethokoukis, most US companies and their CEO’s are stuck in the short-term and quarterly earnings mentality, again both killers of trust.

The Silver Lining

In a recent blog post called The Good News About Leadership  Bob Vanourek describes more enlightened versions of capitalism that are emerging and go beyond the “maximize shareholder value” mantra that is becoming increasingly obsolete and discredited. He references this article in McKinsey Insights called Redefining Capitalism.

Have We Yet to See Any Examples Of CEOS Embracing a New Way of Thinking about Trust?

Yes indeed! I wrote about the Top Ten CEO Trust Stories of 2014 in this recent post. It includes examples from enlightened CEOs like Howard Schultz at Starbucks and Capital One’s Richard Fairbank.

Perhaps there is still a ray of hope for trust to make a comeback in corporate America, but it won’t be through increased regulation and mandatory rules. After all, trust is voluntary.  Let’s see what happens in 2015.

Our library of our own award-winning books and many others on building organizational trust can be accessed here and provide a good starting place for learning more about the subject, especially if you are an enlightened CEO, or want to be one.

Barbara Brooks Kimmel is the Executive Director of Trust Across America-Trust Around the World whose mission is to help organizations build trust. She is also the editor of the award winning TRUST INC. book series and the Executive Editor of TRUST! Magazine. In 2012 Barbara was named “One of 25 Women Changing the World” by Good Business International.

Copyright 2015, Next Decade, Inc.

There is no doubt that trust is broken in most organizations. If you doubt the validity of this statement, here’s a quick test.

1. Do you look forward to getting up and going to work in the morning? Now ask the person sitting next to you the same question.
2. What was the level of employee turnover in your organization in 2014?
3. Do you like your boss, or does he like himself more? When was the last time he/she spoke TO you instead of AT you?
4. Has trust as a “business imperative” ever been discussed at a staff meeting?
5. Can you list the three most important values in your organization?

Get the picture? The good news…. if leadership hasn’t woken up to the value of trust, appoint yourself as the Chief Trust Officer today, start instilling some trust in your organization, and chances are, you will like your job more by the end of 2015. Your colleagues will thank you and maybe your boss will wake up too! It’s a win/win for all.

Late last year we published the 3rd book in our award-winning TRUST Inc. series. It’s called TRUST Inc. 52 Weeks of Activities and Inspirations to Build Workplace Trust . We also published a year-end companion poster with 52 ways to increase organizational trust, as recommended by some of the world’s leading experts, and members of our Trust Alliance.

The first activity can be completed in less than one hour. It’s called “Listening for Leaders” and was written by Charles H. Green, one of the world’s foremost authorities on trust-based relationships.

This is a brief introduction to the activity:

Objective: Concretely demonstrate to leaders a way of interacting with others that increases influence through empathetic listening.

Requirements: 3 persons, each with a particular “difficult client/colleague” situation.

30 – 40 minutes elapsed time.

Can be done in multiples of three persons, with a strong facilitator

Process overview: The exercise is done in three iterations. Each of the three gets a chance to role-play:

Person A. a difficult client of their own

Person B. an advisor or follower of the difficult client/colleague

Person C. an observer

Each iteration proceeds as:

a. 60 seconds for the “client/colleague” person to describe the situation – out of role character

b. 4 minutes for the role-play – in character

c. 3 minutes debrief, led by the observer

This activity also includes Notes to Facilitators, Debrief Instructions & a Wrap Up.

Interesting idea?  It’s the first of 52. Get the book, print the poster and hang it on your wall. Start your new career as the Chief Trust Officer in your organization today. There’s no reason to wait for the boss to do it. I dare you!

If you need help along the way, visit our website for free resources on building organizational trust. We can even recommend a local expert to visit and share their expertise.

Barbara Brooks Kimmel is the Executive Director of Trust Across America-Trust Around the World whose mission is to help organizations build trust. She is also the editor of the award winning TRUST INC. book series and the Executive Editor of TRUST! Magazine. In 2012 Barbara was named “One of 25 Women Changing the World” by Good Business International.

Copyright 2015, Next Decade, Inc.

For those of you who did not grow up with access to a beach, or “shore,” the term “Boardwalk hawker” may be unfamiliar. The hawker is simply the person who stands outside the establishment yelling for passers-by to come in and watch the freak show or spend a few dollars on a game of chance.  Similar to “carnies” most of these folks would not be the ones you would trust to babysit your kids, and probably not your dogs either.

The rise of “social media” has brought with it a new generation of hawkers. While in the past, trustworthy business relationships were built over time and in incremental steps, those days seem long gone.  Now anyone can hang a sign, claiming expertise in just about anything, and shout it from the rooftops across all social media, hoping that someone will pay attention.

Hawkers are pretty easy to spot. These are a few clues:

1. They use the words, “me,”, “my,” and “I” way more frequently than “we.”
2. The phrase “Check this out”,  “I just wrote this” or “My latest” is a common one.
3. Their LinkedIn profile and/or a website has several “holes” in education or experience that don’t quite make sense.
4. They lack testimonials or references, or use only initials in place of real names.
5. Their “social” mindset appears fixed on short-term money making opportunities, not long-term relationships, and so they are usually “too busy” for a call or a meeting.

Trust is built in incremental steps and over time. Business is won and done through real relationships, face-to-face meetings and phone calls,  not through superficial social networks and emails. And trustworthy experts not only “talk” their expertise, they walk it too. In fact, many of them can’t even be found on LinkedIn or through a Twitter search.

Shouting the loudest does not make one an expert, let alone trustworthy. Yes, we can hear you, but “No” we don’t trust you. There are no shortcuts to trust. Trust is a combination of character, competence, consistency and generosity, something rarely found in hawkers or carnies… and it takes time.

Barbara Brooks Kimmel is the Executive Director of Trust Across America-Trust Around the World whose mission is to help organizations build trust. She is also the editor of the award winning TRUST INC. book series and the Executive Editor of TRUST! Magazine. In 2012 Barbara was named “One of 25 Women Changing the World” by Good Business International.

Copyright 2015, Next Decade, Inc.

Did you know that Trust Across America-Trust Around the World is celebrating the 2nd anniversary of the formation of its Alliance of Trustworthy Business Experts? This global group includes corporate executives, consultants and academics from a variety of silos- leadership, innovation, compliance, teams & HR, entrepreneurship, etc. The common thread is a shared interest in elevating levels of trust within organizations.

Our members are prolific writers. Some of them have shared their “best” 2014 suggestions on building organizational trust. If you are doing more than just “talking trust” and actually “walking it,” don’t miss this!

Articles & Blog Posts

Nan Russell offers 5 Tips to Fix Your Broken Communications and Build Trust

Deb Mills-Scofield asks Are You Just a Leader or a Just Leader?

Mark Fernandes shares his thoughts on what it is like Inside the Walls of a Values-Based Leadership Organization

Taina Savolainen on Trust & Innovation Interplay

Barbara Brooks Kimmel’s Most Popular Article of the Year asks the question, What Quote Does Trust the Most Disservice?

Bob Vanourek explores how to Learn to Trust Your Own Judgement

Charles H. Green offers advice on What to Do When Others Abuse Your Trust

Donna Boehme weighs in on GM’s DIY Compliance

Linda Fisher Thornton reminds us that in Building Trust We Must Know What to Weed Out

Lea Brovedani reviews what happens in  Messing Up and Keeping Trust

Books

In 2014:

Trust Across America-Trust Around the World added two new books to it’s award-winning TRUST Inc. book series:

TRUST Inc., a Guide for Boards & C-Suites

TRUST Inc., 52 Weeks of Activities & Inspirations for Building Workplace Trust

Carol Sanford’s The Responsible Entrepreneur: Four Game Changing Archetypes for Founders, Leaders and Impact Investors, is the WINNER of the Best Entrepreneurship Book of 2014 via 800CEOREAD.

Karin Hurt’s Overcoming an Imperfect Boss discusses ways to elevate trust at work.

Bob Whipple wrote Trust in Transition, Navigating Organizational Change

Magazines

Did you know that we released the first issue of our quarterly magazine TRUST! in the fall of 2014? Our next issue will be out at the end of January,

Posters

Finally, we have created a poster for 2015 called Weekly Activities to Increase Organizational Trust. For a small donation, you can download this poster and help build trust in your organization in the coming year.

Barbara Brooks Kimmel is the Executive Director of Trust Across America-Trust Around the World whose mission is to help organizations build trust. She is also the editor of the award winning TRUST INC. book series and the Executive Editor of TRUST! Magazine. In 2012 Barbara was named “One of 25 Women Changing the World” by Good Business International.

Copyright 2014 Next Decade, Inc.

We all know that startup businesses have high failure rates. Just how high is open to debate but this graphic, showing them by industry, is worth a look. Trust holds the key to long-term business success and profitability, yet it remains the most frequently ignored business strategy. Without trust as a foundational element, the chances for long-term business survival are little to none.

Yesterday someone asked me to enumerate, from a “trust” perspective, ten sure-fire business failure warning signs. I’ll bet several are present in your organization.

1. Trust is taken for granted or viewed as a soft skill. There is no Chief Trust Officer (not to be confused with ethics or compliance. Trust is voluntary while compliance is regulated.)
2. Your corporate credo or core values are nonexistent, or the ones in place are simply “words” tossed up on a website.
3. Goals have yet to be defined, shared or agreed upon. Nor has a course been plotted with a one, three and five-year plan.
4. Leadership is focused on survival and short-term profitability only, instead of a unique corporate value proposition and the customer.
5. The “leader” lacks leadership skills. Worse yet, he is a total jerk and everyone knows it but him.
6. There is not a single woman in sight on the executive leadership team.
7. Everyone is a boss and no one is held accountable, resulting in a lack of consistency and a great deal of finger-pointing.
8. Board members are “Yes men” for the CEO, and “yes” they are all men.
9. There is lots of talk and little action, and everyone is always “very tired” from all the “hard” work.
10. A well-defined hiring strategy has not been implemented resulting in misalignment and inefficient staffing.

How many of these are present in your startup? Each one is an indicator that your business will fail.

We have published a brand-new 2015 poster listing 52 weekly actions you can take to build trust and secure and ensure long-term business success, drawing on expert advice from around the world. A donation of $10.00 (minimum $5.00) might hold the key to your long-term business success. Make the investment for the good of your organization and all your stakeholders. See you in 18 months!

Want to learn more about building organizational trust? Our award-winning 3-book TRUST Inc. series that can be ordered here,

Barbara Brooks Kimmel is the Executive Director of Trust Across America-Trust Around the World whose mission is to help organizations build trust. She is also the editor of the award winning TRUST INC. book series and the Executive Editor of TRUST! Magazine. In 2012 Barbara was named “One of 25 Women Changing the World” by Good Business International.

Copyright 2014 Next Decade, Inc.

Trust Across America- Trust Around the World’s

Year-End Letter (and what a year it’s been)

Dear Friends and Colleagues:

We will close the year with almost 400,000 website visitors accessing close to 1.5 million pages of material, confirming that organizational trust is on the minds of many people worldwide, and so the “I” goal above has been met. We expect to continue this positive trend going forward.

The “You” phase began in late 2013, asking and answering the question “What cost-effective or free resources do you, our audience, need that will help you build trust?

To meet this objective we completed the following twelve projects in 2014:

• Published two additional books in our TRUST Inc. series, and our anchor book, won two national gold awards in business from Nautilus and Eric Hoffer.

• Continued to build the Business Case for Trust using our proprietary FACTS Framework as the foundation.

• Expanded our free You Tube Trust Talks video series which have been watched by thousands of people.

• Added several new free Building Trust Reports. Our Building Trust in Community Leadership Report has been downloaded almost 4000 times this month alone! One need only read the headlines to understand why. Print it and give it as a gift to your local Mayor or Police Chief.

• Launched our free living Trust Bibliography with the help of Bob Easton at Accenture. It’s the largest of its kind in the world and is updated every 6 months. Update coming soon.

• Hosted a series of regional Trust Circle breakfasts and luncheons, engaging in lively discussions and making new friends and business relationships.

• Spoke at colleges and conferences.

• Created a trustworthy leadership survey called the Leader’s Project and began to aggregate data and great stories.

• Launched TRUST! Magazine.

• Brought awareness to the topic of organizational trust with our first global TRUSTGiving Campaign in November, right before Thanksgiving.

• Organized our Alliance members into a Trust Speakers group to meet national and global demand.

• Published our 2015 Weekly Activities for Increasing Organizational Trust poster.

And now we are entering the “We” phase.

During 2014, our Alliance of Trustworthy Business Experts continued to grow, and with each new member came a new trust perspective and more engagement. We collectively began to ask “How can we, as a growing Alliance, collaborate to meet the needs of our global audience?” This will be our focus in 2015 as we move into year #3 of the Alliance formation.

On January 1, 2015, our Alliance will be temporarily closing to new members, and we will maintain a waiting list. Some existing members will be invited back when their membership expires, while others will not. This will be based on shared interest and objectives as we move forward, and on specific areas of organizational trust expertise which may be lacking in our existing group.

If you are considering joining, please do so before the end of the year. All new members are vetted.

I wish each of you the best in 2015 for health, happiness, and more trust. I hope you have enjoyed getting to know us and choose to show your ongoing support for our very important work.

Barbara Brooks Kimmel is the Executive Director of Trust Across America-Trust Around the World whose mission is to help organizations build trust. She is also the editor of the award winning TRUST INC. book series and the Executive Editor of TRUST! Magazine. In 2012 Barbara was named “One of 25 Women Changing the World” by Good Business International.

Did you read Seth Godin’s blog post today? It’s called The Annual Plan Construction Set. It reminds me of the “artist” who chooses the “paint by numbers” option over a blank canvas. Companies opt for “safe” over “trust” more often than not.  “Safe” should not be confused with safety.  Safe is more like paint by numbers, quick and easy. Trust is the blank canvas, slower and more difficult. At the end of the day, “what the artist puts in is what he gets out” and trust trumps safe.

Some surefire clues that, like most, your company has chosen “safe.”

1. The CEO makes an annual appearance at the holiday party only, because he/she spends most of the time putting out fires.
2. The company credo is merely something written on a wall, but never discussed.
3. The compliance/legal department is the largest, and EVERYTHING must be cleared.
4. Innovation is nonexistent.
5. Employee turnover is high and engagement is low.
6. Decision-making is very slow.

Trust starts at the top. It’s risky because it takes time and is built in incremental steps. Sometimes a temporary dip in profitability occurs. But companies that build trust into their DNA are often those whose annual report does NOT scream “safe.” The pages are filled with candor because the CEO has the secret sauce that trumps competitors. The choice has been made to invest in trust, and it has paid off.

As Seth Godin says, “vague is safe, and no one ever got in trouble for failing to meet a vague plan.” What’s your leader’s plan? Trust or safe?

Barbara Brooks Kimmel is the Executive Director of Trust Across America-Trust Around the World whose mission is to help organizations build trust. She is also the editor of the award winning TRUST INC. book series and the Executive Editor of TRUST! Magazine. In 2012 Barbara was named “One of 25 Women Changing the World” by Good Business International.

Have you seen our brand new book? It’s the third in an award-winning series.

ORDER NOW

Copyright 2014 Next Decade, Inc.

Organizational Trust this Week is a new feature beginning with the “Good”, moving through the “Debatable” and occasionally ending with the “Ugly.” Each story contains a trust component and at least one lesson for organizations seeking to make trust a business imperative. Trust news this week was “light” so we decided to reproduce a three article series published earlier about trust and CEOs, and reverse the order, beginning with the “Ugly.”

THE UGLY

CEOs Suck at Trust

THE DEBATABLE

Trust, Governance & Howard Schultz

THE GOOD

Build Trust Into Your Portfolio

By the way, did you know we released a new book last week in our award-winning TRUST Inc. book series?

ORDER NOW

GIVE A GIFT OF TRUST THIS HOLIDAY!

We are taking a break and will be back after the holidays with more Organizational Trust this Week. Our best wishes for a festive end to 2014.

Barbara Brooks Kimmel is the Executive Director of Trust Across America-Trust Around the World whose mission is to help organizations build trust. She is also the editor of the award winning TRUST INC. book series and the Executive Editor of TRUST! Magazine. In 2012 Barbara was named “One of 25 Women Changing the World” by Good Business International.

Should you wish to communicate directly with Barbara, drop her a note at Barbara@trustacrossamerica.com

Copyright 2014 Next Decade, Inc.

Sometimes my friend “Karma” plays the most interesting tricks on me, as she has done this week with this classic corporate “trust tug of war.”

On Monday I wrote a blog post called CEOs “Suck” at Trust.

Soon after, my friend Corey Dubrowa at Starbucks reminded me that not all CEOs are created equal, and shared this recent video of Howard Schultz describing the future of corporations and their trust imperative.

I remain a big supporter of Howard because of his focus on trust. His name has been included among our Top Thought Leaders for several years, and I wrote about him back in 2011 in a CNBC blog called “We Need More People Like Howard Schultz”

And then this morning, Karma came knockin’ with an article in my inbox called Corporate Governance Issues for 2015 written by another acquaintance Holly Gregory. It begins with this sentence: “Governance of public corporations continues to move in a more shareholder-centric direction.” Holly describes the push, pull and pressures companies face in meeting the short-term demands of shareholders and long-term value creation.  At the end of Holly’s article she touches on the role of the corporation in rebuilding trust, from a somewhat philosophical perspective.

So which one will it be in 2015? Do we slog through another year of misdirected Boards and CEOs focusing on the short-term needs of shareholders, or will more follow the example being set by Howard Schultz?

I’m hanging my hat with Howard. As has been proven, again and again, the best companies are those with a long-term stakeholder value perspective. They are not sacrificing profitability for trust, in fact, quite the opposite. The business case for trust has been made. Enlightened companies have Boards and CEOs who get that. The rest allow themselves to remain caught in that ever present net of short-termism.

I want to do my part to help reverse this seemingly never-ending cycle of mistrust in business. I will repeat the offer I made on Monday. For the remainder of the month of December, any public company CEO or Board Member who emails me at barbara@trustacrossamerica.com with their name, title and US company address will be sent our complete three-book award-winning TRUST Inc. series at no cost, with no strings.

PS- I am a proud long-term Starbucks shareholder! Keep up the good work Howard.

Barbara Brooks Kimmel is the Executive Director of Trust Across America-Trust Around the World whose mission is to help organizations build trust. She is also the editor of the award winning TRUST INC. book series and the Executive Editor of TRUST! Magazine. In 2012 Barbara was named “One of 25 Women Changing the World” by Good Business International.

Copyright 2014 Next Decade, Inc.

Forgive me for being so brash, but the facts are the facts. One of the most enlightening moments of my 5+ year career as the Executive Director of TAA-TAW came recently when a CEO looked me straight in the eye and said “Trust, I like that word.” Quite simply, he had never considered it as a business strategy, let alone an imperative.

So why do CEOs suck at trust? Primarily because Boards of Directors do too. As I’ve said before, the crisis of trust that many describe is really a crisis of leadership. Why does it exist? In public companies, the reasons are simple. The Board and CEO are unwilling to adopt trust as a long-term strategy because it may, in the very short-term, impact:

• Quarterly earnings
• Wall Street’s support
• Shareholder value
• Their own compensation and tenure

And they are not willing to sacrifice any of these, even for one quarter. Case closed.

There are other reasons why CEOs in both public and private companies, suck at trust. These are just a few of the most important:

1. They do not possess the core values required of a trustworthy leader- character, competence, consistency and generosity.
2. They have not taken the time to find out what matters to the people they lead.
3. They have never considered the benefits of strong corporate values and culture.
4. They rely too heavily on their legal and compliance team, doing only what is “legal” as opposed to what is “right.”
5. They believe that crisis repair is less costly than building long-term trust.

As I have said many times before, industry is not destiny nor is any company perfect. But when the Board and the CEO suck at trust, the chances are that all the employees will too.

Over the past 12 months, we have published three award-winning books in a series called TRUST Inc. and a new magazine called TRUST! Some of the world’s leading experts have weighed in on how organizations can not only improve trust with all stakeholders, but we have also proven that trust impacts bottom line profitability.  My guess is only a handful of the Board members and CEOs I describe above have read any of these publications. After all, why bother?

“Short termism” is a trust killer, that’s why. Yet it’s the strategy that most Boards and CEOs have adopted and choose to embrace. Too bad for them. It’s why they suck at trust.

I want to do my part to help reverse this seemingly never-ending cycle of mistrust in business. For the remainder of the month of December, any public company CEO or Board Member who emails me at barbara@trustacrossamerica.com with their name, title and US company address will be sent our complete three-book series at no cost, with no strings. Let’s see how many take advantage of this offer. What’s your guestimate?

Barbara Brooks Kimmel is the Executive Director of Trust Across America-Trust Around the World whose mission is to help organizations build trust. She is also the editor of the award winning TRUST INC. book series and the Executive Editor of TRUST! Magazine. In 2012 Barbara was named “One of 25 Women Changing the World” by Good Business International.

Copyright 2014 Next Decade, Inc.