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The 2018 Trust Verdict is in – The Results Are Dire. Will You Turn Trust Around?

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April 20th, 2018

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April 23, 2018 - 8:19am
 
If ever there was a time when corporate leaders must work to improve trust, that time is now. Trust was in a state of crisis in 2017 and earlier this year we posed the question, Trust in Crisis: Can Leaders Upend the Trend this Year? as we awaited the 2018 Edelman Trust Barometer. 

As Ashley Fulmer flagged in her HBR article, Employees Who Trust Their Managers Are More Likely to Trust Their CEOs (referencing the 2017 Edelman Trust Barometer):

"These results are worrisome because within the organization, trust in organizational leaders is linked to employees’ intention to stay, compliance with strategic decisions, and unit performance."

In this post, we'll explore the latest research findings on the state of trust, the hopeful news we've uncovered from the business world, and important steps organizations and their leaders can take to restore trust in business.

As Paul J. Zak argues in The Neuroscience of Trust,

"Employees in high-trust organizations are more productive, have more energy at work, collaborate better with their colleagues, and stay with their employers longer than people working at low-trust companies. They also suffer less chronic stress and are happier with their lives, and these factors fuel stronger performance."


Trust in 2018

Rather than improving, trust ratings are the lowest on record. 
 
Edelman's 2018 Trust Barometer captures 33,000 survey respondents from 28 countries and the results indicate a continuing crisis – a lack of trust with numbers lower than ever recorded in the eighteen years this research has been conducted. Trust Illustration
In the U.S., this past year reveals the worst collapse in trust ever recorded in the history of the Edelman Trust Barometer with a 37-point aggregate drop in trust across the 4 measured institutions. The public trust index score imploded, down 23 trust points to 45, the lowest of all 28 nations surveyed. Edelman’s analysis states that this decline is across every U.S. age, gender and region surveyed. 
 
Details of the trust gap across global geographic regions are contained within the 2018 Edelman Trust Barometer Global Report. Some of the important business findings reveal:
  • Trust in companies headquartered in the U.S. has dropped five points from 55% to 50% in the last year alone, down from 61% in 2014 and well below companies based in Canada and Switzerland at 68% and 67%, respectively.
  • 60% of respondents believe CEOs are driven more by greed than a desire to make a positive difference in the world.
The following results from the report identify trust-building mandates based on trust gains or losses.
 
Edelman Trust 2018 - Business Manadates

A Bit of Good News

  • There is an increase in confidence in experts and academics over peer-to-peer sharing of information, perhaps driven by the trends noted above. Those with credentials gain in trust while peer-to-peer information and social media platforms drop.
     
  • There is a recovering belief in CEOs. This has increased from 37 % to 44%. This rise is attributed to CEOs speaking out on issues that matter. Interestingly:
    • 70% of respondents stated that the number one job of CEOs is to build trust.
    • Two-thirds of those surveyed say they want CEOs to take the lead on policy changes rather than waiting for governments to act.
The recent Conference Board, Human Capital Watch report, C-Suite Challenge 2018: Reinventing the Organization for the Digital Age, published in January 2018 also points to a dangerous decline in trust within business and society. This report, detailing responses and analysis to the 2018 C-Suite Challenge survey “shows organizations acknowledging the need for radical change and reinvention.” 
 
The declining trust in business, political and policy institutions in the U.S. was noted as a hot-button issue by CEOs in this report. 

Leaders, Do Something. Silence and Inaction are No Longer Options

What’s a leader to do with this information? 
  • Strengthen trust-building skills of frontline leaders through training. In their research study published in the Journal of Applied Psychology, Cheri Ostroff and Ashley Fulmer found that trust transferred up in the organization. When frontline leaders exhibited behaviors that were perceived to reveal high procedural justice (e.g., making decisions in an unbiased manner and listening to followers’ concerns), employees trusted their frontline leaders and in turn, had more trust in senior organizational leaders. In other words, trust trickles up. 
     
  • Manage for trust. Through his experiments and the surveys, Paul J. Zak has identified eight management behaviors that foster trust, including sharing information broadly and intentionally building relationships.
     
  • Putting people first. Our recent post, Trust in Crisis: Can Leaders Upend the Trend this Year? offers positive steps leaders can take to improve trust within their organizations while standing firm and speaking out against the erosion of trust in our vital institutions.  

CEOs Can Be Activists in Restoring Trust – With Planning and Care

As many CEOs are heeding the economic, public, or political pressure to build public and employee trust by weighing in on vital issues of the day, they may benefit from some additional guidelines for doing so. These guidelines are offered in the article, The New CEO Activists, by Chatterji and Toffel published in the January-February issue of the Harvard Business Review.  
 
Chatterji and Toffel describe two distinct strategies for speaking out; raising awareness of issues or leveraging economic impact. Based on their research, they offer the following suggestions:
  1. Carefully determine what issues to weigh in on. Work with an executive team to think through the implications of any public stance, then take on only those issues of importance to the industry, to the community, to one’s conscience, or to the brand.
  2. Determine the best time to weigh in based on the potential impact derived. Timing is everything.
  3. Determine how to best weigh in. Is a sole voice from a powerful CEO in a well-known firm going to hold more weight, or will a coalition of like-minded CEOs speaking with one voice going to have the most leverage over a situation?
  4. Don’t go it alone. Consult with boards, employee groups or other key stakeholders before making a public stand.

The Call is Obvious, How Will You Respond?

These are unusual times, fraught with peril for leaders who ignore the signals evident in the surveys noted in this article. Yet hard times offer tremendous opportunity for those who take risks, working toward the greater good. 
 
The call to improve trust is blaring at all of us. As a leader, how will you respond? 

Kathy Flora is a Career and Executive Coach and AJO Blogger who is actively pursuing her life’s passion, helping others find and fulfill theirs. Known as a positive change agent, mentor and guide, she has assisted hundreds of leaders and their teams understand their strengths, collaborate effectively, and drive organizational success. She has a special affinity for working with virtual teams, using webinars, virtual meet-ups, and online collaborative communities to optimize communication and productivity. Her experience spans over 25 years in executive management and leadership, career development, facilitation, and consulting in private firms, state government, and in federal agencies.