Our TOP FIVE Articles on Trust

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Building a culture of trust makes a meaningful, measurable difference to companies and yet, according to PwC’s 2016 global CEO survey, 55% of CEOs think that a lack of trust is a threat to their organisation’s growth.

There is also nothing soft or altruistic about it; creating trust is a major driver of exceptional productivity and efficiency.  There is also nothing easy about it. To create a culture built on trust requires a conscious and courageous choice for senior management, backed up by consistent and sustained focus. 

We’ve pulled together five of our favourite articles on trust to help and inspire.

 

Rethinking Trust 

Roderick Kramer argues that human beings are naturally predisposed to trust – it’s in our genes and our childhood learning – and by and large it’s a survival mechanism that has served our species well. That said, our willingness to trust often gets us into trouble.  So why do we trust so readily, why do we sometimes trust poorly, and what can we do about it?

 

The Neuroscience of Trust 

Paul J Zak has been researching the relationship between trust and economic performance since 2001, both mathematically and behaviourally, and his article for HBR summarises the last ten years of neurological research as well as identifying eight management behaviours that build trust. 

 

This Polish company shows how to destroy Command and Control 

Corporate Rebels tell the story of a remarkable organisation that is challenging the status quo of how work in Poland (and in the world) is organised.  They show once again that giving employees lots of freedom, trust, and responsibility can lead to amazing things.  And, as if that wasn’t enough, they introduce us to the idea of the company wallet

 

Can we make it safe (again) for CEOs to Lead with Purpose 

Shortly before the end of the second World War, Fortune published a statement by a forward-looking group of American CEOs called ‘A Framework for a Postwar Economy’.  The third sentence began “The Economic System is a tool for achieving the common good….”.   Profitability without advancing the common good was failure. Today’s social and economic context is, once again, forcing business leaders to rethink what they were taught about the purpose of business.  And CEOs need to talk about their company’s purpose – not just as a philosophy, but as a strategic tool that helps guide business choices.

 

The Trust Dividend

70% of Americans hate their job.  A terrifying 19% admit to actively sabotaging their employer.  How can we turn this around and start to build the high trust cultures that will enable entrepreneurial teams and businesses to prosper in a volatile and ambiguous world?  Trust engages and emboldens talent, fosters ideas and innovation and attracts customers.  And trust starts with the individual and their willingness to take responsibility.


Our pick of the best FIVE articles for purpose-led leaders in 2017

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Read, digest and critique our pick of the best 5 articles for purpose-led leaders in 201​7.

1.  The Aspen Institute: ​Can We Make It Safe (Again) for CEOs to Lead with Purpose?

Shortly before the end of the second World War, Fortune published a statement by a forward-looking group of American CEOs called A Framework for a Postwar Economy​”​​. The third sentence began, “The Economic system is a tool for achieving the common good..”  Profitability without advancing the common good was failure.

Today’s social and economic context is, once again, forcing business leaders to rethink what they were taught about the purpose of business. ​And CEOs need ​to talk about their company’s purpose, not just as a philosophy, but as a strategic tool that helps guide business choices.

 

2.  ​Havard Business Review: The Neuroscience of Trust

Building a culture of trust makes a meaningful, measurable difference to companies. And according to PwC’s 2016 global CEO survey, 55% of CEOs think that a lack of trust is a threat to their organisation’s growth. But where do you start and how do you avoid ‘karaoke Friday’ and psychological fads?

Paul J Zak has been researching the relationship between trust and economic performance since 2001, both mathematically and behaviourally, and his article for HBR summarises the last ten years of neurological research as well as identifying eight management behaviours that build trust.

 

3. LSE: Performance needs purpos​e

The pay-for-performance practices that dominate the corporate world are built on a foundation of standard economic theory. People act in their own interests, so they’ll work harder if there’s money on the table.

Yeah, right. Just as behavioural economics has shown standard theory to be terrible at predicting human behaviour, there’s little connection between pay for performance and the volumes of academic research on motivation and goal setting…”it’s like we studied human behaviour and flipped the findings on their head.”

James Elfer argues that firms seeking higher performance should look to modern self-determination theory and encourage purposeful work to drive better performance.

4.  EY: How can purpose reveal a path through disruption?

“The human story as it’s unfolding now is a bit of a cliff-hanger,” says Valerie Keller, EY Beacon Institute Global Leader.  “Automotion, digitalization and ongoing economic and political volatility are inspiring a great searching of the corporate soul.  A new idea – and ideal – of successful business in the 21st century is emerging” purposeful business.” 

It is relatively easy for a company to adopt the rhetoric of a feel-good purpose that articulates an aspirational reason for being.  But actually living, breathing and effectively demonstrating a commitment to that purpose is an infinitely larger task.  Yet it is an effort that can pay off substantially in our disrupted world.  

 

5: Huffington Post: Purpose-Driven Business Can Help Rebuild Trust

Ah, trust. That old chestnut. Today, trust in government and other institutions, including business, is at an all-time low. But Paul Polman argues that with the UN Sustainable Development Goals, we have a roadmap for shared purpose, and above all a partnership for the common good. It will take strong leadership and moral courage in order to bring purpose-driven, socially accountable business models from the margins to the mainstream.  If we can, then what better way to restore trust than with purpose? 



How to reverse the productivity slide, end world poverty and reverse climate change. In ten years.

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Here’s a shocking fact for employers. Most people who work in our companies hate their jobs. According to Gallup, just 13% of people in the world are actively engaged at work and this has a massive impact on productivity.

And 1 in 5 hate us. 19% of people admit to actively sabotaging their employer.

This is not just a tragic waste of human joy and potential but a shocking loss to our businesses and the economy.

19% of people admit to actively sabotaging their employer

We read constantly about declining productivity in western economies. According to economist Francis Green “the lack of individual discretion at work is the main explanation for the declining productivity and job satisfaction in the UK”.

Gallup estimates lack of engagement at work is costing the US economy $450bn a year. If you factor that globally, that’s $1.7trillion.

Let’s just to put that into perspective for a moment. Let’s pretend we could choose to reinvest that money in solving the world’s problems. We’d eliminate extreme global poverty, end moderate poverty and then go on to reverse climate change all in ten years.  (Ending poverty: $3.5tr Jeffrey Sachs ‘The End of Poverty’. Stabilising greenhouse emissions $13tr, UN Intergovernmental Panel on Climate Change).

So just what is going on? Is this wholesale disengagement from the idea of work truly an existential threat to free market capitalism?

It very well might be. But it’s a problem with a strikingly obvious solution.

Only 40% of people have the first idea what their company even stands for.  Since a fundamental human need is a sense of meaning and belonging, this gives a fairly strong clue to the cause of all that disengagement and anger.

A sense of meaning is a fundamental human need

And there’s evidence to back that up; 62% of millennials want to work for a company that benefits society and 50% would sacrifice salary for meaningful work (Global Tolerance). And 77% of recruits report they joined their employer partly because of the company’s purpose (Deloitte).

The evidence that offering people something to believe in has a huge impact on their happiness and performance is compelling. Staff in purpose-led companies are 12% more productive, 40% more engaged, 70% more satisfied and 300% more likely to stay (Warwick University, Energy Project).

IMD concluded purpose-led companies showed a 17% increased return over 5 years

It’s axiomatic that human performance leads to business performance. And human performance appears to be strongly influenced by what the company believes in. In a review of 56 academic research papers conducted by Deutsche Bank, 89% showed companies with strong Environmental, Social and Governance factors “outperformed competitors on a market basis, while 85% exhibited accounting-based outperformance. And the numbers are arresting. According to Havas, purpose-led brands are worth 20% more than their peers and IMD concluded purpose-led companies showed a 17% increased return over 5 years.

The prize is therefore huge. And the solution sounds incredibly simple. To re-engage with our people, to create fulfilment and wellbeing and to build high-performing companies we just need to rediscover and re-communicate what we stand for.

It’s therefore no coincidence that purpose is now driving so many Board conversations, so much internal comms, and even leaking out into consumer advertising (just take a look at some recent banking commercials).

Regrettably, it’s not that simple. As so many are now discovering, meaningful organisational purpose doesn’t just happen. The bad news is that it requires two things that big corporate companies forgot how to do a long time ago.

The first is ownership (see previous article). Without a sense of emotional ownership it’s hard to engage or find the motivation to strive. Without ownership, why bother? Those who feel ownership care. They also act autonomously to serve the good of the company. In research by Cornell University, businesses that offered autonomy grew at 4x the rate of control-orientated firms, with a third the turnover of staff.

Without trust and ownership, purpose is just a set of words

Yet ownership will only exist in an environment of trust (see previous article). According to academic W Edwards-Deming “Trust is mandatory for optimisation of a system. Without trust, each component will protect its own immediate interests to the detriment of the entire system”. Without trust, why take the risk? High trust cultures are effective and productive because they are open, compassionate and creative not inward, fearful and controlling. Energy is directed to the good of the firm, not the protection of the individual’s position. In research by Paul Zak high trust companies were fully 50% more productive.

The lesson is clear. Before investing in purpose, companies need to take a long, hard look at how they are treating their people. Are they creating cultures of ownership and, most fundamentally, creating environments of genuine trust and true compassion? Without these things, purpose is just a set of words. Devoid of human meaning.

As employers, even if we’re not moved by a sense of our moral duty to make our places of work fulfilling and purposeful, compassionate and meaningful; even if we can live with being hated by 20% of our staff; we should be swayed by the compelling commercial case for purpose. $17tr over 10 years is a pretty good return for doing the right thing.


Love in business. Are you completely crazy?

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Love in business? What an absurd, even uncomfortable idea.

But what, after all, is ‘love’? Passion, regard, affection, enjoyment, zest, understanding and compassion? Are these not exactly the attributes we complain are lacking from our businesses?

And the antonyms of ‘love? Resentment, scorn, malice, antagonism, lack of alignment, fear. You don’t need to look far to see these in almost any large organisation in the world.

Perhaps love in business is not such an embarrassment. Far less an irrelevance. But, if so, what does this really mean and how to achieve it?
We thought we’d find out by bringing together leaders from some of the largest companies on the planet with entrepreneurs, advisors, academics and philosophers for an honest debate.

Read the results below.

#PurposeLed

 


Leadership? It’s followship we should be worried about

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At a recent HR Conference, attended by HRDs from some of the largest organisations on the planet, there appeared to be only two topics of conversation over the canapes and warm pinot grigio. Leadership and Engagement.

It’s instructive for non HR types to attend these things. HR holds up a mirror to how we, as business leaders, are thinking about our people. And we clearly have some re-thinking to do.

Everyone recognises that employee engagement is the absolute key to higher productivity, efficiency, agility and financial performance. And this is seen as a “Leadership Challenge”. In other words, it’s a top-down issue. The thinking goes, ‘if only we had leaders who could engage, who had better EQ or better communication skills the issue would be solved’.

But what if this isn’t a top-down problem at all? What if it isn’t really an absence of leadership but an absence of followship?

Whilst EQ, compassion and communication are really important skills for the leader, of equal importance are the beliefs, feelings and behaviours of the followers.

And whilst leadership is complex and nuanced, there are only really three key elements to making followship easier.

the best managers figure out how to get great outcome by setting the appropriate context, rather than by trying to control their people” Reed Hastings

Firstly, there needs to be absolute clarity of purpose – shared in such a way that it is relevant and motivating to everyone.  Put simply, why is this thing, whatever it is, needed, and why does this matter to me?  This sounds screamingly obvious but, in most large organisations, clarity of ‘why’ is a rare commodity. Senior management often describe any initiative in ambiguous and often unaligned terms. They rarely communicate purpose. They rarely define context. Yet, to quote Reed Hastings of Netflix “the best managers figure out how to get great outcome by setting the appropriate context, rather than by trying to control their people”.

Clarity and congruence of purpose creates engagement. If messages are muddled or mundane it’s hard to engage as a follower. It’s a big reason that initiatives don’t gain the traction.

Ownership is the source of engagement. It’s actually how most good entrepreneurial businesses do it.

Secondly, ownership must not exclusively rest with the senior team.  Most companies develop initiatives in the senior echelons of the business then launch them on an unsuspecting workforce. There is then a natural pushback. The human reaction is to resist change of any kind. Employees therefore concentrate on why the initiative won’t work. This is a huge waste of time and energy dissipated in negativity and water-cooler dissent.

In order to facilitate a sense of ownership, leaders must instead structure, and allow time for, a process of early involvement from people right down the business before a “launch” is contemplated. Creating a process that is iterative rather than directive creates a sense of ownership. And ownership is the source of engagement. It’s actually how most good entrepreneurial businesses do it.

The value and knowledge in the business sits at the grass roots. And yet we expect all the solutions to come from the top.

So, how many people need to be involved? To achieve absolute buy-in and unstoppable change 15% of people need to feel some degree of ownership through involvement in the creative process. It’s a big change in approach for most large organisations. But the benefits don’t end with the achievement of passionate engagement and adoption of your initiative. You’ll also get a far better solution as pitfalls are ironed out as the initiative develops. As one CEO remarked recently ‘I am always aware that in every meeting I attend I am always the least informed person in the room. And it is the same with all my department heads in their meetings. The value and knowledge in the business sits at the grass roots. And yet we expect all the solutions to come from the top.”

Thirdly, trust is absolutely key to followship. It’s a simple truth that people will not follow where they do not trust or, crucially, feel trusted.

According to neuroeconomist Paul Zak “building a culture of trust is what makes a meaningful difference. 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”. And he provides plenty of evidence that “people at high-trust companies report: 74% less stress, 106% more energy at work, 50% higher productivity, 13% fewer sick days, 76% more engagement, 29% more satisfaction with their lives, 40% less burnout”.

According to PwC, 55% of CEOs think that a lack of trust is a threat to their organization’s growth.

So, how to build trust in a large and complex organisation? The answer is that eventually everyone in the organisation needs to be involved in developing a new way of behaving. Jeff Weiner at LinkedIn talks about the necessity of a whole organisation learning the skills of compassionate management.

Trust is actually the most contagious of viruses

In a large organisation this sounds terrifyingly onerous. But trust is actually the most contagious of viruses.   Most businesses, like LinkedIn, have found that you start with a discrete and manageable group and through a process of engagement, education and coaching transform their beliefs and behaviours.  With consistency and support, the trust bug spreads and once 15% of people in the organisation are working with compassion the change is unstoppable,

In his book ‘Trust Factor: The Science of Creating High-Performance Companies’. Paul Zak identifies eight factors that build a high trust environment which can be summarised as: offering frequent praise and recognition; setting clear expectations and holding everyone to account on these; allowing maximum autonomy and encouraging self-management; being open with information; demonstrating care and investing in personal and professional growth; and encouraging complete authenticity.

For followship to take root, organisations need to fundamentally rethink their whole top-down, command and control methodology and instead build an organisational culture based on ownership and trust and with a clear and agreed purpose providing clarity ad context.

The simplest and most entertaining representation of how followship works in any human community, and the dramatic and unstoppable impact of getting this right, is best understood by googling ‘shirtless dancing guy’ (do it now if you are not one of the 4,500,000 to have already done so).

The skills of leadership are critical in today’s complex and ambiguous business world. But it is not enough. To create real engagement, agility and velocity right across the organisation it’s time we thought much more about the skills of followship.

If you want to know more about followship and a new approach to business agility you might enjoy this film from TheEthWord. Or do get in touch jrosling@contexis.com @jrosling.