In most companies trust is taken for granted until a crisis threatens earnings and subsequent shareholder loyalty. And because it’s not regulated, most CEOs ignore the word “trust” completely. Just ask any CEO how trustworthy they think their company is, and depending on the route they took in their ascent through the ranks, these are the responses you will most likely receive:
- The College Sports Team Captain: “Trust is an outcome of wins over losses.”
- The Chief Marketing/Communications Officer: “Trust is gained or lost according to the message we deliver.”
- The Military Officer: “Trust is a product of strong teams.”
- The Milton Friedman follower: “Our quarterly earnings are growing so we are trusted by our shareholders.”
- The Chief Compliance Officer: “If we abide by the regulations, we are trustworthy.”
- The General Counsel: “If we don’t break any laws, we are trustworthy.”
- The Chief Financial Officer: “Our level of trust is measured in our income statement and balance sheet.”
- The Investment Banker: “We benchmark our trust against our competitors.”
If all these definitions are correct, then why are the levels of trust so low, not only in corporate America but globally? The answer is simply, “The definitions are wrong.”
Fortunately some leaders, and their Boards have tossed these “old school” siloed and limited definitions of organizational trust to the curb. We are beginning to see the emergence of a new “class” of enlightened CEOs who are leading very differently and their companies are thriving.
- The Values Based Leader: We define trust according to how trustworthy I am viewed as a leader.
- The Trust Based Leader: We define trust through our leadership and organizational values, and how well we are meeting the needs of all our stakeholders- shareholders, employees, customers, suppliers, community, etc.
Trust begins with leadership that recognizes its value and embraces it as a long-term business strategy. Until leaders at both the Board and CEO level lose their “old school” definition and adopt a new one that works, trust will stagnate. CEOs will continue to extinguish the daily fires by hiring more compliance staff to meet the needs of the ever increasing regulations that are written as a result of low trust and trust violations. Sounds like a never-ending cycle of mistrust … and a short-term strategy at best.
I challenge all CEOs and Boards to lose their old definition of trust and replace it with one that works. Start by becoming a values based leader and trust will follow.
Barbara Brooks Kimmel is the Executive Director of Trust Across America-Trust Around the World whose mission is to help organizations build trust. She also facilitates the world’s largest membership program for those interested in learning more about the subject. Barbara is the editor of the award winning TRUST INC. book series and the Executive Editor of TRUST! Magazine. In 2012 she was named “One of 25 Women Changing the World” by Good Business International.
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Copyright 2015, Next Decade, Inc.
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