Trust is a delicate, yet powerful force that paves the way for every business’s success and it can be shattered in an instant.
Sandra J. Sucher, a Harvard Business School professor, authored a book titled “The Power of Trust: How Companies Build It, Lose It, Regain It,” which describes the business, economic and societal importance of trust and how to regain it once it’s been lost. This blog covers important points from the book.
Businesses are facing a trust crisis. According to the Edelman Trust Barometer (2021), business was the highest-rated institution with 61% trust, followed by government at 53%. That percentage sounds decent at face value but when we take a step back, it could be better. Trust is the willingness to enter a relationship of vulnerability with someone—or an organization—that has power over us.
A previous study of NCAA basketball players found that the team with the highest trust in its coach had the highest number of wins, and the team with the lowest trust in its coach had the least wins. This presents a question for businesses—How does a company gain trust? Aside from the obvious challenges of building trust, the pandemic added more challenges. The book referenced above focuses on helping people understand how trust is built and how to regain it if it’s lost.
The pandemic impacted trust, bringing two dimensions into focus: companies’ responsibility for safety and the relationship with work. The first is a relatively new topic, unless you’re in an extractive industry or working with heavy machinery this hasn’t been a worry previously. Now, we are seeing signs that read “Here’s how we’re keeping our employees safe. Here’s how we’re trying to keep our customers safe.”
This new responsibility is at the heart of trust because people trust their lives with companies, whether in the form of customers or employees. Additionally, we are at the point where we need to knit organizations back together as we are gradually getting back to normal.
Three questions for companies to ask are:
1. What COVID has felt like inside our organization?
2. What has their experience been like?
3. How good of a job do they feel our organization has done managing the challenge on behalf of themselves and others?
Trust is built from the inside out. It is impossible to imagine a company being trusted by its clients if it is not trusted by its employees. Regaining trust is not a simple process. Taking responsibility for any harm the organization has created and apologizing is the first step. Trust’s moral domain involves peoples’ ability to take responsibility for their actions, providing a foundational element for trusting companies and other individuals. The next step of regaining trust is accepting accountability for what was wrong. Whereas some companies blame the bottom tier of employees; people’s demand for fairness and accountability drives the importance of those at the top of the hierarchy taking responsibility for what happens on his or her watch. The last step is creating a long-term strategy for fixing what caused the breach in the first place.
Sustainability reporting is important, and requires a company to share the strategy, what matters, the stakeholders involved, the progress being made and what still needs to be done. Another aspect of sustainability reporting is to remember that the first audience is inside the organization. If trust is built from the inside out, employees need to understand what happened and what is being done to make the situation right. So even if the problem does not spread outside the company, the company has a credible story, data to back it up, and what is being done to prevent it from happening again. This also builds credibility with employees and encourages them to support the company through gaining trust on the outside, if needed. At the end of the day, there are three dimensions in the moral domain that people care about greatly: the motives of a company, fairness and the impact the company has.