- Trust in major institutions declined in 2021
- Authenticity, transparency and leadership create cultures of trust
- Engagement and retention increase in high-trust organizations
If levels of trust were a stock market indicator, we would say we are in a very bearish market.
A Gallup poll showed that trust in 14 major institutions had declined from 2020 to 2021. Even trust in public schools and medical systems dropped (after double-digit increases in 2020). And only 33% of employees strongly agree that "My company would never lie to our customers or conceal information that is relevant to them."
It may be tempting to blame the events of the last two years for the decline in trust, but corporate history is littered with bad actors, from Tyco to Theranos, conning those they purport to serve. Indeed, Gallup's State of the Global Workplace report research shows that 74% of employees worldwide believe corruption is widespread among businesses in their country. It is no surprise that people are less trusting of leaders. A March 2021 Gallup Panel survey1 found that only 23% of U.S. employees strongly agree that they trust the leadership of their organization.
This affects us all. When people lose trust in leaders, their decisions are informed by suspicion and their actions by self-interest. Businesses become more vulnerable as fewer employees are motivated to act for the greater good. As Warren Buffet said, "Trust is like the air we breathe -- when it's present, nobody really notices; when it's absent, everybody notices." Indeed, Gallup finds that low-performing teams in low-trust cultures talk about trust constantly. In high-trust cultures, teams rarely mention trust at all.
Creating high-trust cultures takes time, patience and effort -- telling employees "trust me" doesn't work. But Gallup research shows what does: the practices that defang the bear market by creating cultures of authenticity and transparency, driven by leadership competencies that reignite trust.
It is painfully obvious, but truthfulness is essential to trust, especially truthfulness from managers. An employee who feels lied to will probably never trust that manager again -- and may develop grave doubts about you and the organization as well. But there's more to truth-telling than honesty. To be trusted, a manager must present their authentic self to employees. In every interaction.
When people lose trust in leaders, their decisions are informed by suspicion and their actions by self-interest. Businesses become more vulnerable as fewer employees are motivated to act for the greater good.
Employees need to believe their manager is presenting their genuine beliefs, life experiences, opinions and unique strengths. Authenticity makes managers' intentions and ethics predictable, which makes it easier for employees to feel confident in and trust their manager. And when employees trust their manager, they're more likely to trust you and your organization. Indeed, Gallup's research in western Europe shows that 39% of employees overall strongly agree that if they raised a concern about ethics or integrity, their employer would do what is right. That figure jumps to 61% among those extremely satisfied with their immediate manager.
Authenticity is a practice, developed consciously and consistently. You can support it in your managers by investing in their development, promoting their strengths, showing you care about them as people, clearly communicating your expectations often -- and by being your own authentic self. The best leaders know who they are and are not. Your managers need authenticity from you just as their teams need authenticity from them.
Culture of Transparency
Authenticity is being true to yourself, and transparency is sharing that truth through words, behaviors and actions. Highly trusted companies tend to be radically transparent. The apparel company Patagonia, for instance, made pushing the boundaries of transparency a directive for the employees who designed their Footprint Chronicles website, which publicly traces products' journey from raw ingredients to retail shelves. A recent Axios Harris Poll2 ranks Patagonia at the top of consumers' most-trusted brands.
That level of transparency may seem counter-productive -- even dangerous -- in a business environment that makes information and data a kind of currency. But trust demands facts and open communication. Showing your cards gives consumers the information that generates trust.
Internal transparency can have a similar effect. Processes and policies can inhibit compliance violations, but to squash skepticism in the ranks, leaders must openly share their minds, intentions and beliefs.
However, internal transparency travels by word of mouth, and information networks are tricky things. Communication can get siloed, blocked or twisted, which can undermine trust. Gallup maps clients' communication flows with Social Network Analysis (SNA), detecting where information and decision-making move freely and where they stall. That analysis is, in many ways, a topography of trust.
Leaders need to understand their information networks to structure them strategically. SNAs highlight how power and influence in the network can strengthen employees' trust, confidence in the strategy and future directions. This analysis identifies sources of trust that are not always visible -- stakeholders, influencers, mentors and information brokers -- and ascertains why some networks succeed and where others are blocked.
Processes and policies can inhibit compliance violations, but to squash skepticism in the ranks, leaders must openly share their minds, intentions and beliefs.
Ultimately, transparency is fundamental to trust, but transparency is only effective when properly transmitted.
Of course, that's true of leadership itself: It only works when it's transmitted well. Leadership competencies are the transmission circuits, and those competencies can be oriented toward the behaviors that build trust. Like all behaviors, leaders can learn those competencies through experimentation and mindful practice -- after all, practice makes progress.
The behaviors that inspire trust, Gallup's leadership research shows, include seven key competencies:
- The ability to build relationships that establish connections that transmit ideas and accomplish work
- A drive for development that focuses on followers' needs, expectations and aspirations
- Comfort with leading change in organizational strategy and in alignment with the vision
- The capacity to inspire others by encouraging their efforts and celebrating success
- Critical thinking that seeks information openly, invites dissent and stimulates debate where needed
- Communication skills that result in clear, open and transparent dialog that empowers trust
- A need for accountability to hold yourself and others responsible for performance
Leaders who commit to practicing those competencies can inspire trust in individuals -- or whole cultures. Indeed, leaders of high-trust cultures constantly hone these skills to become more trustworthy. And they're more successful too: Gallup's research shows a three-fold increase in engagement in employees who feel they can trust their organization's leaders. Employees who trust their leaders are 61% more likely to stay with their company and not look for another job.
And it seems that the leadership competency of listening plays a most significant role. Gallup research in 2021 shows that employees who receive feedback from their manager daily are 2.1 times as likely to strongly agree that they trust the leadership of their organization. But leadership is not just about feedback. Employees who say their manager is always willing to listen to work-related problems are 4.2 times as likely to strongly agree that they trust the leadership of their organization.
Notably, all leaders practice these competencies differently. Though the outcomes of trust cultures are similar, each leader is unique, and the best purposefully deploy their unique strengths -- it's a form of authenticity. Part of that leadership is encouraging employees' strengths as communicators, information processors and advocates.
There are obvious business benefits to high-trust cultures, including attraction, retention, agility, productivity and safety. Gallup's research shows that when followers strongly agree that they trust their leaders, one in two are engaged; when followers don't find leaders trustworthy, only one in 12 are engaged. And a recent Gallup study on compliance found that the employees who report ethics violations tend to trust that the right thing will be done.
That's what happens when trust is in a bear market. People atomize and look out for themselves.
But markets change. And leaders can change the trust market by encouraging authenticity, expanding their transparency and leading with the competencies that inspire trust. It's good for their culture. It's good for business. It's good for everyone. We're all invested in the trust market, and we all get a return on it. Your leadership has significant impact on whether the return is a positive one.