Trust in Organizations – Absent or Present - IEDP
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Trust in Organizations – Absent or Present

“Trust is like the air we breathe - when it's present, nobody really notices; when it's absent, everybody notices.”

Tuesday 13 March 2012


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Warren Buffett said after the 1991 Solomon Brothers bond trading scandal “Trust is like the air we breathe - when it's present, nobody really notices; when it's absent, everybody notices.” In a new white paper on building trust in organizations Chris Hitch, Program Director at UNC Kenan-Flagler contends that, although the sage may be right, his observation is not sufficient to build the business case needed to take action and attempt to improve an organization’s level of trust.

SEE BELOW TO READ THE WHITE PAPER: How to Build Trust in an Organization

Sadly since 1991 business headlines have too often been about the absence of trust; from American Airlines to Xerox the list of corporate mistrust is long, and with greedy bankers, MP’s expenses, Bernie Madoff, etc. trust gets a regular hammering.

Much is written about the consequences of the breakdown or absence of trust but very little about the positive effects that trust can bring. This timely paper aims to restore the balance by showing the importance of trust in creating sustainable organizations.

Quoting Continental Airlines and Whole Foods Markets as examples of how companies have been able to prosper through difficult times, and Netflix as an example of lost trust being restored, Hitch shows the positive effects of trust in action. He notes that as the economic outlook improves it will be trusted corporations that will most easily retain and attract the best talent.

“High-trust organizations collaborate well across departments and hierarchies, and seek fair resolutions to difficult situations. Employees in high-trust organizations have confidence in their leader’s vision for the future” (Amy Lyman, Co-founder of the Great Places to Work Institute, 2012)

Quoting from a range of recent thinking on the value of trust, Hitch emphasizes the importance of determining the level of trust within an organization and points out how organizations with high trust tend to experience better financial performance, lower employee turnover, and higher morale than their competitiors. Specifically he describes how HR and talent development managers can:

• Define trust within their organization

• Examine the foundations of trust

• Understand the effects of trust on the bottom line

• Assess the level of trust within their organization

• Take action to build or rebuild trust within their organization

In the UK where the National Health Service is seen as a ‘trusted’ organization, a problem arises when as now there is an attempt to improve standards through reform. Can trust in the status quo lead to inertia?

Chris Hitch’s response is that the key driver for the leaders in those types of organizations are to find ways to demonstrate (not simply assert) to stakeholders that changes are needed. One effective tool to combat resistance to change is to repeatedly bring in external data points to graphically share reasons why the old way, while it works now, may not be the way forward in a new world. You have to spend time developing and then implementing an internal and external communications plan that helps create a sense of urgency for change.

Disruption and change are a fact of business life and it is those organizations that have built the trust of their employees, customers, suppliers and investors that are best placed to undertake change and weather disruptions. 

Click on DOWNLOAD THIS RESOURCE To read: How to Build Trust in an Organization

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