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Trust is a professional problem: why your business needs an ethical vision

18 February 2015

The article at a glance

We all know that trust is vital to any successful business, and research shows that trusted organisations regularly outperform their less trusted …

We all know that trust is vital to any successful business, and research shows that trusted organisations regularly outperform their less trusted competitors. It is not just a “nice-to-have” issue but a central factor in delivering high performance. But do you know who you can really trust, and do you know how to get others to trust you? Answer “yes” to those questions and you have the bedrock of a high-powered, high-performance business.

Human pyramid

by Dr Philip Stiles, University Senior Lecturer in Corporate Governance, Cambridge Judge Business School

Dr Philip Stiles
Dr Philip Stiles

Trust is at the heart of leadership. If a leader is giving direction or vision or asking for change, that leader must first of all trust themselves on their own judgment. They must then persuade others – employees, customers, investors, regulators, suppliers, the media and government – to trust that their ideas and actions are right. Leadership, in essence, is a relationship between the leader and his or her stakeholders; the best relationships work on mutual interests, shared values, clear communication and, at the bedrock, trust.

This does not necessarily mean that we have to love or even like each other very much in teams – many productive relationships are founded on a lack of harmony. Think, for example, of technology company teams, where many of the members argue strongly and aggressively with each other and hardly socialise with each other – but they trust each other to do their jobs and they also trust each other well enough to voice their issues and to debate heatedly without fear or threat of reprisal. This openness and accountability drives their performance, but without trust it couldn’t get off the ground.

Trust is hard-won but easily lost. For me, the first lesson is to understand what trust is and means for twenty-first century business. There are usually two kinds, and the first is task based: do you trust people to do their job effectively? This is a straightforward kind of trust – a strong selection process should ensure you appoint someone you can trust to carry out their duties.

However, the second form of trust is much more opaque – do you trust people to mean what they say? Do you have faith in a colleague, customer or supplier to be open, to speak and act honestly? Can you be sure they don’t have a hidden agenda?

We live in times when trust seems in shorter supply than ever – since the financial crisis, whatever faith we once might have had in those with whom we do business is now often at best fragile and at worst eradicated altogether.

But trust can be rebuilt – and needs to be. The Gulf region is a good example where relationship-based leadership works and where trust, built up over time through repeated contact, is at the cornerstone of leadership practice.

So what we are seeing around the world now is a move away from vertical, power-based leadership towards a much greater harnessing of the significant power of trust, allowing the voices of stakeholders far more influence. It takes skill, care and a strong ethical vision – all issues that I will be discussing at the forthcoming Cambridge Judge Business School Senior Executive Leadership & Trust Programme, run in partnership with the Pearl Initiative, which takes place in Dubai in March.

But trust is intangible and largely implicit – it emerges by bringing everything into the open, to surface underlying assumptions. If your company is really, truly serious about building this faith into your staff and customers, you have to know and accept what people are thinking. And if a CEO says: “We’re all in this together” but one of his lieutenants says “I’m scared to voice an opinion”, then you have a problem.

Of course, it takes a bold leader to carry out this kind of cultural audit – holding up a mirror can be genuinely shocking and many organisations are afraid of opening Pandora’s Box. But the companies that really succeed are those who genuinely strive to match the rhetoric with reality. For that to happen, a CEO needs to say, and to mean: “I don’t agree with your opinion but I value it and I’m not going to sack you for voicing it.”

Organisations naturally come from a viewpoint of not trusting each other. Agency theory marks people as self-serving who, if not managed properly, will do their own thing because that’s safer than trusting anyone else. But the reality is that most people want to be good stewards of their company, and trusting relationships significantly minimise organisational risk.

That is why the CJBS intensive programme covers corporate governance and trust, leadership versus management, and teaches delegates to develop and implement a high impact “trust plan”, using emotional intelligence to develop leadership behaviours and communications strategies.

In a world of faster connectivity than ever before, where leaders need to interact with, and make decisions about, different cultures, this skill-set helps senior executives to learn how to make trust decisions immediately – to “trust fast”. The catastrophic collapse of trust in the banks brought new superstructures to safeguard those who had dealings with them. And since the financial crisis, you don’t know who you can trust – but if no-one trusts anyone business becomes awkward and slows down. Someone, somewhere has to take that decision to trust very fast, and break the cycle.

Trust is not just about following a moral code – it brings significant economic benefits. Getting that relationship right engenders confidence, high quality and high performance. More than ever before, for a company to truly succeed, trust is the real bottom line.

This article was published on

18 February 2015.

The Leadership and Trust Programme is for senior executives and business leaders from organisations based in the Middle East, a region whose “high touch” society uses trust to facilitate business dealing more effectively than the “low touch”, more sceptical business processes of the West.

Learn more about Executive Education open programmes

Visit Dr Philip Stiles’ faculty webpage


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