Trust PRESENTERS: Andrew Lambert, Partner, Creelman Lambert Karen Ward, Programme Director, Corporate Research Forum WITH: Rt. Hon. David Blunkett, MP for Sheffield Brightside & Hillsborough David Russell, Group HR Director, William Hill Kath Durrant, Group HR Director, Rolls Royce David Bickerton, Director of Communications, BP International Ltd Veronica Hope Hailey, Dean, School of Management, University of Bath WHY IS TRUST IMPORTANT? In today’s VUCA world, organisations are finding their reputations under threat as never before. Trust – defined as a combination of dependability and mutuality – is critical to brand reputation and commercial success. In the age of social media, corporate and personal reputations are under scrutiny, and leaders have to work harder than ever to build and protect their brands. In practice this means organisations need to focus on:
Organisation effectiveness – dependability requires the organisation to be fit for purpose and everyone to do a good job.
Relationship management – understanding who the key stakeholders are and what they expect.
Inclusivity and co-creation – involving people in change to gain commitment.
Collaboration – to engage people in improvement and innovation.
IMPLICATIONS FOR LEADERS
A different style of leadership is needed. In some cases strong, autocratic leadership has been disastrous for performance and governance. Greater inclusivity is required.
Yet leaders need to instil confidence by setting clear strategic direction and making firm, timely decisions.
Leaders must be seen to be working in the interests of the organisation and its people – not just feathering their own nests.
Being inclusive – prepared to listen, learn and involve rather than controlling. Open to feedback, communicating with candour and encouraging collaboration.
Boards should have a good understanding of organisation and individual psychology and be equipped to apply the principles in practice.
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Boards should build a systematic focus on organisation effectiveness and trust issues into their agenda.
The criteria and process for recruiting leaders need to be challenged and revised.
Veronica Hope Hailey summarised the following leadership behaviours that can foster trust:
‘Bridging’: describing the golden thread that connects the past, present and future purpose of the organisation. For example, Anthony Jenkins at Barclays is focused on reconnecting Barclays to its roots in the Quaker movement.
Visibility: if there is bad news to communicate, it is critical to show up in person. A leader’s trustworthiness is judged by how they behave, not just what they say.
‘Filling the emotional bucket’: in times of crisis, it is important to acknowledge and allow emotions to be expressed.
Managing expectations: honest, objective conversations are needed with regard to career expectations – don’t promise things that can’t be delivered.
Being ‘floored’ is ok: leaders who show they are human are much more highly respected than ‘infallible’ leaders. Apologising can help defuse a situation, but this is not always possible for legal reasons.
Don’t spin: pretending that something bad is actually good, destroys trust.
WHAT DOES THIS MEAN FOR HR?
HR needs to decide whether it is prepared to act as the guardian of trust. This requires courage to hold a mirror up to the senior team and call out bad behaviour, and credibility to coach at the top.
Defining the organisation’s purpose and values creates a baseline for establishing and sustaining trust.
HR has a role to play as the organisation’s ‘conscience’ – encouraging involvement, consultation, and transparency; and avoiding ‘doing-to’. For example, where redundancies are necessary, being honest about what activities will cease and why, and allowing affected people to have an input, can build trust.
All of HR’s activities – including induction, leadership development, talent management, organisation design, performance management and learning – need to reinforce this.
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Being a role model for transparency, involvement and engagement is important. However, HR has to tread a fine line between respecting confidentiality and brutal honesty, which can be upsetting or even offensive.
Recruitment practices such as psychometrics and reference checking are pivotal, selecting out ‘high risk’ individuals.
HR also needs to build strengths in key areas where is has historically been weak – including measurement, data analysis and technology.
The experience of organisations such as Standard Chartered and BP shows that trust and engagement can be built, but it can take many years of persistence, often spanning the tenure of more than one CEO. It can be destroyed overnight. INSIGHTS FROM POLITICS Rt. Hon. David Blunkett MP shared some insights from the world of politics and public life:
Trust in politicians is at a low ebb. This is not helped by politicians “trashing each other and then asking people to vote for us”. Trust is also undermined by politicians being scared to say what they really think, if they believe it is not what voters want to hear.
Leaders need to be clear about objectives and communicate what they expect of others. Lack of clarity results in a vacuum that will be filled by rumour and mistrust.
Devious leaders, or those who give unreliable assurances, will not be trusted.
Straight talking builds trust – sometimes it is necessary to admit you don’t know the answer, even though this does not come naturally to politicians.
INSIGHTS FROM COMPANIES
William Hill William Hill is highly trusted by its customers, with strong brand loyalty and staff tenure. The company used a recent rebranding as an opportunity to align the internal and external brands. Using the new strapline ‘the HOME of betting’, the company redefined the company’s values with © Corporate Research Forum 2014
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Trust trust at its heart. A top-down process followed with the senior team exploring the principles underpinning how the business operated and a series of focus groups involving staff from across the business. David Russell, Group HR Director, highlighted some of the challenges faced through this process:
Transparency is difficult to maintain in a changing business, as truth changes over time. For example, a promise regarding minimum staffing levels in shops might not be sustainable as commercial realities change.
HR at William Hill operates very closely with the CEO, which means it has a pivotal role in the business. The flip side, however, is that people expect everything they say to go back to the CEO. “It’s a line we have to walk.”
Trust is heavily vested in the CEO and senior leadership team. CEO Ralph Topping, with over 40 years’ tenure, is seen as an authentic and honest leader with high visibility, overseeing a stable, well-established executive team. The company faces a succession challenge when he retires in 2015.
Rolls Royce For a company whose core value is ‘trusted to deliver excellence’, the decision to make voluntary declarations to the Serious Fraud Office was a shock to the whole organisation. This, combined with the appointment of a new CEO, led to a review of the company’s values and purpose. Group HR Director, Kath Durrant, described some of the practical implications for organisational trust:
The actions taken when bad behaviour is uncovered are critical to whether trust is maintained or destroyed. For example, Rolls Royce set up an ethics line and a ‘red flag’ process to report compliance concerns, which has allowed other issues including bullying and harassment to be brought in the open and dealt with. The new code of conduct also provided an opportunity to discuss issues that could easily have been ignored.
Consistent treatment is key. The fallout of setting a new bar for ethics needs to be handled sensitively. Applying today’s standards to yesterday’s practice can lead to
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Trust accusations of harshness. The leadership team must keep those who are affected, but remain in the business, on board.
John Rishton, the new CEO, was careful not to play ‘the past was bad’ card, but instead focused on describing the organisation he wanted to lead and communicating what trust means in practice.
BP David Bickerton, Director of Communications, shared some of the lessons learned from BP’s recent Gulf of Mexico incident:
The recovery period, when trust needs to be rebuilt, takes years.
All aspects of the organisation need to be re-thought – including
asset disposals to shore up the balance sheet, and changing people policies, performance management processes and reward structures.
It is difficult for business leaders to know what to focus on if all functions publish new standards and policies at once – this requires sequencing and coordination.
The example set by CEO Bob Dudley in being a role model, acting consistently and talking about humility, sends important messages about the new company values.
As well as tackling past issues, people need to reconnect with what is great about the company.
Listening to the concerns of staff is important – but actions must be taken as a result.
CONCLUSION Building and maintaining trust is difficult, challenging work. However, even if they do not label it as ‘trust’, many organisations are taking practical steps to define, measure and develop trust. There is an opportunity for HR to taking a leading role in this important aspect of organisation effectiveness. Practical steps to take include facilitating discussions within the organisation about trust, encouraging the adoption of suitable measures and targets, making sure policies are fair and sensible, and being a role model for good behaviour. Doing nothing is not an option.
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