February is Leadership Transformation Month

according to Trust Across America’s

2014 Calendar

Productivity and execution begin when the leader creates a set of values and goals that are shared, accepted and adopted by all stakeholders.

Leaders must regularly communicate with stakeholders about the steps being taken to build trustworthy behavior within the organization.

Leaders must not confuse trust with compliance. The latter is situational. The former is not!

During the  52 weeks of 2014 you can build trust in your organization by thinking about, discussing and following the advice of the experts. Here are the suggestions for the 4 weeks in February 2014.

Week 1: A person “like yourself” is now trusted nearly two times as much as a CEO or government official. Ben Boyd, Edelman

Week 2: When deciding whom to trust remember this, people who will lie for you will lie to you. Lea Brovedani

Week 3: When I trust you, I empower you to influence me.  Elaine Cohen, Beyond Business Ltd.

Week 4: When achieved, organizational trust is validated externally in corporate reputation and performance. Mark Coleman, Convergence Mitigation Management

Please share your comments and suggestions! Email: barbara@trustacrossamerica.com

Barbara Brooks Kimmel, Executive Director, Trust Across America – Trust Around the World

Editor  Trust Inc. Strategies for Building Your Company’s Most Valuable Asset

Why does corporate America continue to turn a deaf ear when profitability need not be sacrificed in the name of trust?

The daily headlines are packed with stories about ongoing distrust in business, and rarely do we see indications that the tide is shifting.   Perhaps it’s because business leaders continue to question the relationship between trust and profitability. We’ve aggregated recent data in this article, thereby making The Case for Trust more difficult to ignore.

The Hard Costs of Low Trust

• Gallup’s research (2011) places 71% percent of U.S. workers as either not engaged or actively disengaged.
• The price tag of disengagement (Gallup) is $350 billion a year. That roughly approximates the annual combined revenue of Apple, General Motors and General Electric.
• The Washington Post reported that “the federal government imposed an estimated $216 billion in regulatory costs on the economy (in 2012), nearly double its previous record.”
• The cost of the tort litigation system alone in the United States is over $250 billion. – or 2% of GDP (Forbes, January 2012)

• The six biggest U.S. banks, led by JP Morgan Chase & Co. and Bank of America Corp. have piled up $103 billion in legal costs since the financial crisis (Bloomberg, August 2013)

• According to The Economist Intelligence Unit (2010), 84% of senior leaders say disengaged employees are considered one of the biggest threats facing their business. However, only 12% of them reported doing anything about this problem.

• According to Edelman globally, 50% of consumers trust businesses, but just 18% trust business leadership.

• And finally, in the United States, the statistics are similar, but the story is a bit worse for leadership. While 50% of U.S. consumers trust businesses, just 15% trust business leadership.

This trust gap negatively impacts a company’s revenue, market share, brand reputation, employee engagement and turnover, stock price, and bottom line profitability.

The Low Cost of Hard Trust

Building a trustworthy business will improve a company’s profitability and organizational sustainability.

A growing body of evidence shows increasing correlation between trustworthiness and superior financial performance. Over the past decade, a series of qualitative and quantitative studies have built a strong case for senior business leaders to place building trust among stakeholders high on their priority list. While none of these studies are perfect, over the next decade their results will be increasingly difficult to ignore.

In a Harvard Business School working paper from July 2013 called The Impact of Corporate Sustainability on Organizational Processes and Performance, Robert G. Eccles, Ioannis Ioannou, and George Serafeim provide evidence that High Sustainability companies (those integrating both environmental and social issues) significantly outperform their counterparts over the long-term, both in terms of stock market as well as accounting performance.

According to Fortune’s  “100 Best Companies to Work For”, based on Great Place to Work Employee Surveys, best companies experience as much as 50% less turnover and Great Workplaces perform more than 2X better than the general market (Source: Russell Investment Group)

Forbes and GMI Ratings have produced the “Most Trustworthy Companies” list for the past six years. They examine over 8,000 firms traded on U.S. stock exchanges using forensic accounting measures. The conclusions they draw are:

• “… the cost of capital of the most trustworthy companies is lower …”
• “… outperform their peers over the long run …”
• “… their risk of negative events is minimized …”

FACTS®. After years of reviewing such studies and vetting independent data providers, Trust Across America – Trust Around the World (TAA-TAW) has been blending five indicators of trustworthy business in its unique FACTS® Framework: Financial Stability, Accounting Integrity, Corporate Governance, Transparency, and Sustainability

The FACTS monthly (rebalanced) portfolio of 25 trustworthy companies significantly outperformed the S&P 500 index (64.3% vs. 30.9% from August 2012 through November 2013).

Numerous indirect indicators of trust also show a direct correlation to superior financial performance.

From Deutsche Bank:

• 100% concurrence on Lower Cost of Capital
  (“… academic studies agree that companies with high ratings for CSR (corporate social responsibility) and ESG (environment, social responsibility, governance) factors have a lower cost of capital in terms of debt (loans and bonds) and equity.”)
• 89% concurrence on Superior Market Performance
  (“,,,studies indicate companies with high ratings for ESG factors outperform market-based indices”)
• 85% concurrence on Greater Performance on Accounting –Based Standards
  (“… studies reveal these types of company’s consistently outperform their rivals on accounting-based criteria.”)

From Global Alliance for Banking on Values, which compared values-based and sustainable banks to their big-bank rivals and found:

• 7% higher Return on Equity for values-based banks
  (7.1% ROE compared to 6.6% for big banks).
•  51% higher Return On Assets for sustainable banks
  (.50% average ROA for sustainable banks compared to big bank earning 0.33%)

These studies are bolstered by analyses from dozens of other respected sources including the American Association of Individual Investors, the Dutch University of Maastricht, Erasmus University, and Harvard Business Review.

Business leaders may choose to continue to challenge the business case for trust but the evidence is mounting. There is not only a business case but also a financial case for trust.  Trust works.

Barbara Brooks Kimmel is Cofounder and Executive Director of Trust Across America –Trust Around the World and editor of Trust Inc. Strategies for Building Your Company’s Most Valuable Asset. In 2012 Barbara was named one of “25 Women who are Changing the World” by Good Business International. For more information, please contact: mailto:Barbara@trustacrossamerica.com

Copyright © 2014 Next Decade, Inc.

Would you like to help us build our Case for Trust? Enter our Case for Trust Challenge!

Crisis management has become a complex field with highly paid specialists who counsel CEOs.

A CEO who leads with trust will find a reputation blow to be softer, and the recovery much easier.

First, let’s look at the central attributes of a crisis

• It has the potential to do significant reputational damage
• It will hurt at least one group of stakeholders- consumers, shareholders, employees, etc.
• It is unique and often unpredictable (although not always)
• It is of interest to the media

Now let’s look at the 5 essential short-term measures the CEO who leads with trust must take:

1. In the first 24 hours communicate widely and communicate consistently
2. Tell the truth
3. Tell it accurately
4. Tell it fully
5. Tell it yourself

And the 5 essential long-term leading with trust measures:

1. Accept responsibility
2. Take long-term corrective action, not a short term band aid
3. Address any systemic problems
4. Rebuild broken bridges
5. Continue to communicate openly

It’s not rocket science, but usually the missing ingredient is trust, and that’s what keeps the crisis consultants and specialists in business.

We devote an entire section to Leading with Trust in Crisis in our new book:

Trust Inc, Strategies for Building Your Company’s Most Valuable Asset 

Trust Inc.

Barbara Brooks Kimmel is the Executive Director of Trust Across America – Trust Around the World.

She welcomes your comments and suggestions.

Email her at barbara@trustacrossamerica.com

2013 represented a pivotal year for our program.

Perhaps we have finally pushed the proverbial trust “boulder” to the top of the hill!

Highlights from the first year of our Campaign for Trust included:

Changing our name to Trust Across America – Trust Around the World, reflecting our global membership and presence.

Initiating the following programs:

• Launched our Alliance and issued our first press release
• Published the first 2 editions of the Directory of Trustworthy Business Experts
• Filmed the first round of our Trust Talks Video Series
• Initiatied our Series of Building Trust Reports
• Crowd-sourced the Building Trust in Community Leadership Report
• Brought our Alliance Members together to create Trust Workshops
• Announced the first round of our Case for Trust Challenge
• Held two Trust Breakfast Roundtables in NYC at the CFA Institute and Edelman
• Published our Trust Bibliography
• Published  Trust Inc., Strategies for Building Your Company’s Most Valuable Asset

What’s coming up in January?

We started the year with a great writeup in Investor’s Daily

We will announce our 2014  4th Annual Top 1oo Thought Leaders on Jan 14

We will be holding a planning retreat on Jan 17 (more info following meeting)

Let’s make 2014 the Year of Convening and Collaborating!

Suggestions, comments or questions?

Please contact me, Barbara Kimmel, Executive Director barbara@trustacrossamerica.com

January is Trustworthy Leadership Month

according to Trust Across America’s

2014 Calendar

A culture of trust cannot exist with an untrustworthy leader.

Trustworthy behavior must start at the top and flow down through every manager in any organization.

Over the next 52 weeks, you can build trust in your organization by thinking about, discussing and following the advice of the experts. These are the suggestions for the 5 weeks in January.

Week 1: Cultivate trust by deepening the conversation. Patricia Aburdene @PatriciaAburdene

Week 2: Employees learn to trust when leaders provide adequate information about decisions they’re making. Andy Atkins @InteractionAsc 

Week 3: What new or enhanced behaviors will you commit to practice to engender trust? William Benner wwconsult.us

Week 4: Without trust, people give up on relationships and leave organizations. Ken Blanchard  @KenBlanchard

Week 5: Trust, like culture,  begins and ends at the very top. Andrea Bonime-Blanc @GlobalEthicist

Please share your comments and suggestions! Email: barbara@trustacrossamerica.com

Barbara Brooks Kimmel, Executive Director, Trust Across America – Trust Around the World

Editor  Trust Inc. Strategies for Building Your Company’s Most Valuable Asset

Trust Inc.

How does one say “Thank you” to friends and colleagues who have helped foster trustworthy relationships?

We hope you enjoy our 2014 Weekly Reflections on Organizational Trust, another collaborative effort of the contributors to our new book  Trust Inc., our Alliance of Trustworthy Business Experts, and friends of Trust Across America – Trust Around the World. (Listed alphabetically)

If you are receiving this gift, we know that trust is important to you, and we hope you will share it with your audience.

Thank you to all who have assisted Trust Across America – Trust Around the World in building organizational trust.

May we continue to make progress in 2014.

With much gratitude and trust!

Barbara Brooks Kimmel

PS- This poster prints 11×14.

 2014TrustPoster

Has the time come for a

Revolution

                             in Leadership?

Become a Trust “VIP”

Values– define and communicate your values

Integrity- be honest and moral in your relationships

Promises- be accountable and deliver on all promises, small or large

VALUES          INTEGRITY         PROMISES

Come join us as we make 2014 the year of Trustworthy Leadership.

Barbara Kimmel, Executive Director, Trust Across America – Trust Around the World

Editor: Trust Inc. Strategies for Building Your Company’s Most Valuable Asset

Trust Inc.

With the right plan, any leader can build trust!

Trust Across America – Trust Around the World offers this 2014 gift to all leaders – twelve months of trust-building activities. Help us elevate trust by incorporating these strategies into your own organization.

January: Trustworthy leadership – A culture of trust cannot exist with an untrustworthy leader. Trustworthy behavior must start at the top and flow down through every manager in any organization.

February: Transformation – Productivity and execution begin when the leader creates a set of values and goals that are shared, accepted and adopted by all stakeholders. Leaders should regularly address all stakeholders about the steps being taken to build trustworthy behavior within the organization. Trust should not be confused with compliance.

March: Tools – There are many trust “tools” leaders can use to build trust with their internal and external stakeholders. These run the gamut from metrics and assessments to online surveys and training.

April: Treatment – The Golden Rule says to “treat others the way you want to be treated.” This certainly holds true for trust. The leader that extends trust to his or her stakeholders is more likely to have it returned.

May: Teamwork – Teamwork leads to better decisions and better outcomes. Teams create trust, and trust creates teams, especially when silos are broken down.

June: Talk – Your stakeholders need to know what steps you are taking to build a trustworthy organization. Quarterly numbers are no longer the “be all and end all.” In fact, evidence is mounting that a trustworthy culture and profitability go hand in hand.

July: Truth – Truth-telling is at the core of trust. Any leader who wants to build a trustworthy organization must have an extremely comfortable relationship with the truth. No company is perfect and it’s not necessary to air all the dirty laundry – just don’t lie about it or intentionally mislead. In times of crisis, a habit of truth telling yields particularly good returns.

August: Transparency – Merriam Webster defines “transparent” as visibility or accessibility of information, especially with business practices. A leader who thinks he or she can still hide behind a veil of secrecy need only spend a few minutes on social media reading what their stakeholders are saying.

September: Thoughtful – Not all stakeholders need to know the company’s trade secrets, or what the CEO had for dinner. But if your company is serious about increasing trustworthiness, consider engaging all your stakeholders in rich, thoughtful conversations. View them as vital contributors to a better organization.

October: Tolerance – A trusted leader is open to new ideas that may not align with his own. Tolerance empowers stakeholders with ownership and leads to higher engagement at all levels.

November: Time – Building a culture of trustworthy business does not happen overnight. It takes time, maybe even years – but not decades. The leader who invests the time to educate himself or herself about how to build trust with teams and stakeholders — then develops a plan, communicates and implements it – will be rewarded with greater stakeholder trust. When a slip-up occurs, those who “banked” trust will recover faster.

December: Trust – Don’t forget that trustworthy business is not about quarterly earnings and international expansion, but rather about building long-term trust.

Yours in trust! Barbara Brooks Kimmel, Executive Director

Trust Across America – Trust Around the World

Barbara has edited a new book called Trust Inc., Strategies for Building Your Company’s Most Valuable Asset, bringing together over 30 experts who offer advice and suggestions on elevating trust in any organization.

Copyright © 2013 Next Decade, Inc.

While most authors and publishers hope for bestseller status for their new titles, we hope so too, but not for the same reasons that most do. If we don’t earn it, we’d rather not have it! This is how we would like to see it happen. Will you help?

Our Prayer for Becoming a Bestseller

1. May every CEO who puts profit before good business read this book.
2. May every CEO take away the understanding that trust IS a hard currency.
3. May every Board member read this book before their next meeting.
4. May business schools use the essays as case studies on how to do it “right.”
5. May someone deliver copies to every member of Congress and the guy in the White House. The lessons to be learned apply to all organizations, not just businesses.
6. May everyone who buys a book, buy a second one for someone who will benefit from reading it.
7. May the financial news anchors read this book and start talking about a new “trust” model for business.
8. May Warren Buffett, who is mentioned several times, take a bow for trustworthy business practices.
9. Same goes for Howard Schultz of Starbucks.
10. May every essay contributor feel a tremendous sense of pride in collaborating on this much-needed resource, and help us spread the word to foster trust around the world. Our mission has just begun.

CLICK HERE TO ORDER THE BOOK FOR SOMEONE WHO SHOULD READ IT

Ask any C-Suite executive about organizational trust and most will tell you that the “soft stuff” belongs to another department. Soft stuff? How many business executives do you know who could pass this “trust” test?

The Hard Cost of Low Trust

Question: Gallup’s research (2011) places ________ % of U.S. workers as either not engaged or actively disengaged.

Answer: A startling 71%

Question: The price tag of disengagement (Gallup) is $________

Answer: $350 billion a year. That roughly approximates the annual combined revenue of Apple, General Motors and General Electric.

Question: The Washington Post reported that “the federal government imposed an estimated $_________ in regulatory costs on the economy (in 2012).”

Answer: $216 billion in 2012, nearly double its previous record.

Question: The cost of the tort litigation system alone in the United States is over $________.

Answer: $250 billion. – or 2% of GDP, Forbes, January 2012

Question: The six biggest U.S. banks, led by JPMorgan Chase & Co. (JPM) and Bank of America Corp., have piled up $___________ in legal costs since the financial crisis.

Answer: $103 billion in legal costs since the financial crisis, more than all dividends paid to shareholders in the past five years. Bloomberg, August 2013

Question: According to The Economist Intelligence Unit (2010), __________ % of senior leaders say disengaged employees are considered one of the biggest threats facing their business. However, only ____________ % of them reported doing anything about this problem.

Answer: 84%, 12%

Question: In 2011 , WIQ calculated that mistrust is costing companies between ______% to ______% revenue loss, and _____% to _______% loss of profitability. WIQ is a team sourcing technology company

Answer: 14-18% revenue loss and 17-24% loss of profitability.

Question: In the 1960’s, if you introduced a new product______% of the people who viewed it for the first time believed the corporate promise. Forty years later, if you performed the same exercise less than _______% believed it was true. Howard Schultz, Founder & CEO Starbucks

Answer: 90% believed the corporate promise, now less than 10% believe it to be true.

Question: According to Edelman globally, _____% of consumers trust businesses, but just ______% trust business leadership.

Answer: 50% of consumers trust business, while 18% trust business leadership.

Question: In the United States, Edelman’s statistics are similar, but the story is a bit worse for leadership. While _____% of U.S. consumers trust businesses, just ____% trust business leadership.

Answer: 50% of consumers trust business while just 15% trust business leadership.

The Low Cost of Hard Trust

Unfortunately, it’s easier to find data on the cost associated with low trust. But here are a few test questions addressing the cost savings of hard trust.

Question: A study by the Russell Investment Group finds the “100 Best Companies to Work for in America (In which trust represents 60 percent of the overall criteria) earned over _______ times the returns of the market at large.

Answer: See for yourself. resources.greatplacetowork.com/article/pdf/how_trust_affects_the_bottom_line.pdf

Question: The Towers Watson 2011-2012 “Change and Communication ROI Study Report” shows that companies that have highly-effective communications practices are _________ times more likely to outperform their peers financially.

Answer: 1.7 times

And finally, Trust Across America – Trust Around the World continues to track the performance of America’s Most Trustworthy Companies agains the S&P 500 and the findings are nothing less than remarkable.

 

 

The next time a business executive tells you “trust is soft”, suggest he take the “Test” and maybe (even) buy our new book:

Trust Inc., Strategies for Building Your Company’s Most Valuable Asset.

 

Trust Inc.