Leadership: When trust is a must

Of all leadership enablers, none is more important than trust. Unfortunately, trust is seemingly diminishing global and local commodity. Global surveys now consistently suggest that trust in our institutions and the individuals that lead them is falling: in some countries such as France, the United Kingdom, Russia, Spain, Brazil and Japan, alarmingly so.
According to this year’s London-based Edelman Trust Barometer, people don’t trust chief executives, viewing them as the “least credible public spokesperson” for business or organisation. Edelman, global public relations consultancy, has published its barometer for more than 10 years. Its 2012 survey provides grim reading and suggests only 30 percent of respondents find CEOs credible.
Surveys in the United States and other countries are delivering similar findings. Trust in both public and private sector organisations and the leaders of those organisations, is falling almost everywhere – at least everywhere that more or less independent and impartial surveys are undertaken. America’s best known polling company Gallup recently reported that trust and its close associate confidence, has remained flat or fallen in most of the 16 major public and private institutions it tracks.
The only survey to deliver some, albeit qualified, good news on this topic is Britain’s 2011 Index of Leadership Trust, produced by its Institute of Leadership and Management Today magazine. It found UK employees trusted their CEOs more last year than at any time over the previous three years. But, it cautioned, “with trust critical factor in effective leadership at all levels”, there was plenty of room for improvement.
And the gap in trust in line managers, which previously far outstripped trust in CEOs, had narrowed according to the index. The trust in line managers has, apparently, been “fairly static” over the past three years which, the analysts said, was “real cause for concern”. In their opinion, trust in line managers is “even more critical to organisational performance than trust in CEOs”.
Summarising this growing body of research suggests that less than 50 percent of employees trust senior management. And somewhere between 25 and 30 percent believe CEOs are credible source of information. That’s doesn’t seem like ringing endorsement of the top echelon of enterprise.
So, fewer and fewer people trust their leaders. Does it really matter? Well yes, according to the experts. And if they are right, the slip/slide in trust might explain some of the sinking feelings we have about the current scarcity of good leadership. But equally, it doesn’t bode well, at least in the short to medium term, for the prospect of finding individuals with the wherewithal to tackle some of our increasingly demanding problems.
“Trust,” says Stephen Covey, US-based author and advisor on trust, leadership and organisational ethics, “makes the world go round.” Without it, individuals “cannot be effective leaders”. Or, as even higher profile management guru Warren Bennis puts it: “Leadership without mutual trust is contradiction in terms.” I could rattle off dozen similar sentiments from as many equally learned observers and thoughtful individuals, from Peter Drucker to Winston Churchill, but you get my drift.
That ‘trust is to leadership what water is to swimming’ makes sense when you consider the consequences of an empty pool or distrustful relationship. Covey argues that indeed, the high cost of low trust can be quantified. For example, 2004 estimate of the cost of complying with US federal rules and regulations – enacted to counter lack of trust – was US$1.1 trillion, more than 10 percent of its gross domestic product. And New Zealand investors lost more than $8 billion when they entrusted their hard-earned savings to the nation’s school of scoundrel finance companies.
A leader’s first job is to inspire trust. The rest of his or her career must be dedicated to maintaining it. Trust is leadership and leadership is trust. Trust underpins every organisational and personal life relationship. As Covey wrote in his best selling 2006 book of the same name: “Nothing is as fast as The Speed of Trust”. And nothing is more destructive than the lack of it. That trust is in free fall, no less, I suspect, in New Zealand than elsewhere in the world, is worrying. M

Reg Birchfield is writer on leadership, governance & management. [email protected]

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