The truth about trust

/ 01 September 2009

As businesses go under and banks collapse, trust is at a premium. But it’s never been more vital – trust drives the performance the UK needs to survive the recession. New research by ILM assesses levels of trust in the UK’s leaders and explains how they can breed trust in themselves and their organisations. Shaun Campbell reports

Do the people you lead or manage trust you? A little, a lot, completely? If you’re the boss of a very small company, who’s been at the helm for at least five years with pretty much the same employees as when you started, the chances are that you enjoy a high level of trust.
If, however, you’re the new CEO of a very large organisation, with a workforce of long-serving staff, you really have your work cut out. To establish trust in your leadership you’ll have to demonstrate not only that you’re good at your job but that you’re a fundamentally honest person with high principles. And don’t expect it to happen overnight. Give it at least five years…

These are some of the findings to emerge from the 2009 ILM Index of Leadership Trust, research designed to measure the degree of trust between UK employees and their managers. The first of its kind, the index will set a benchmark measure against which levels of trust will be tracked on an annual basis. Most importantly, it shows leaders and managers how their personal behaviour and the structure and ethos of the organisations they lead affect trust.

It’s no secret that trust in the UK’s leadership, from Whitehall to Canary Wharf, has taken a battering in recent months. Collapsing banks, rising unemployment, failing firms and the MPs’ expenses scandal have combined to create a deep sense of mistrust in our leaders, both business and political. In today’s straitened economic times, it’s tempting to view trust as nice but optional. In fact, the fallout for businesses of low levels of trust could be catastrophic, according to a growing body of evidence which points to trust as a central plank of high performance.

According to one study, The Enemies of Trust by R Galford and AS Drapeau, if employees don’t trust their leaders they ‘will disengage from their work and focus instead on rumours, politics and updating their CVs’. RM Kramer, in Trust and Distrust in Organisations, found that trust reduces transactional costs by allowing organisations to remove layers of management and unnecessary bureaucracy, and that it is undermined by excessive monitoring and surveillance. Author Fukuyama goes even further, arguing that there is an inverse law between rules and trust – the more rules, the less trust.

Essentially it boils down to this: people work better and feel more positive about their work in environments where trust levels are high. It is reciprocal – if you trust me, I’m more likely to trust you – and it is much harder to create than destroy.

The trust test

Is the glass half-full or half-empty? The findings reveal that nearly 70% of employees generally or completely trust their management team, which, given the uncertainty fostered by the current economic climate, might be regarded as reasonably positive. However, that still means that nearly a third of UK employees have little or no trust in their managers. Given the impact low trust has on organisational performance, that’s a worrying sign for UK plc.

One of the eye-catching findings of the Index of Leadership Trust is that CEOs are trusted less than line managers. They have an overall trust index score of 59 (from 100), which is 10 index points lower than line managers’ score. But what’s particularly interesting about this result is the difference between employees’ expectations of their CEOs and of their line managers.

Employees’ trust in their CEOs is mainly driven by their perception of how well they do their job and their personal integrity. Demonstrating their ability to do their job should be a given for CEOs, but integrity – and displaying it to staff – is a much harder nut to crack. Of course, very few CEOs – even everyone’s favourite villain Sir Fred Goodwin – would accept they lacked integrity. And in reality, few probably do. But if that’s the impression among staff, then CEOs must address this gap between perception and behaviour if they want to be trusted. A clear understanding of their values, and a willingness to ‘live’ them, is crucial.

Ability and integrity are important for line managers too, but employees demand a broader range of attributes from them – understanding, fairness and openness are key characteristics that breed trust in line managers.

This discrepancy in the drivers of trust reflects the different nature of the relationship employees have with their line manager and their CEO. The everyday contact between an individual and their line manager makes for a more nuanced relationship, requiring a more diverse base of qualities to inspire trust. Managers who master the management basics – listening to and understanding their teams and treating them fairly – will build trust.

It’s not just the quality of the relationship between a manager and their team that affects the level of trust – time is also a key factor. Broadly speaking, the longer the relationship between a manager and their member of staff, the higher trust is likely to be. The age-old management challenge of taking over a long-serving team is a particularly delicate time for trust, with new managers of long-standing employees scoring particularly badly. The findings reveal a ‘trust black spot’ – a low that occurs between new leaders and long-serving staff – that employers need to take care to counteract through open communication and consistent demonstration of the key characteristics that drive trust.

Current economic conditions are creating some of the most challenging times that many managers and leaders will have experienced. The organisations that survive or even thrive during this recession will be those that respond quickest and adapt best to difficult trading conditions.

Trust in leaders and managers is absolutely critical to coming through it. People who are anxious and fearful for their futures will only respond positively when they believe their leaders are doing the right things for the right reasons. They won’t feel that way automatically. Trust has to be earned, and that doesn’t happen overnight. New brooms, however stellar their reputations and track records, have to show that they are in it for the long haul, to demonstrate that their commitment to the organisations they lead far outweighs their personal ambition.

Integral integrity

The findings of this survey point to one simple, profound conclusion. Integrity is the foundation of trust and it grows in importance with seniority. There are many effective training programmes that can help leaders and managers improve their communication and interpersonal skills, even boost their overall performance. But integrity can’t be faked and is difficult to teach. It can, however, be learned.

It requires a high degree of self-critical reflection and honesty, the ability to see beyond your immediate circle, to recognise and reject acolytes and yes-men, to understand that how you see yourself is not necessarily how others see you.
These findings come at a time when trust is being tested to its limits. In the circumstances, trust in the UK’s leaders and managers is in a reasonable state. But there’s plenty of scope for improvement. Armed with the knowledge of what drives trust, today’s leaders and managers can bring about this improvement, both in themselves and their organisations.