Trust isn’t a crisis – it’s a cascade

Guest blog written by John Rosling, who is a writer and lecturer on entrepreneurship and Head of Thought at the Contexis Index CIC.

Business faces a storm of existential challenges.

Trust between business and the society it operates within is low and still falling. The 2017 Edelman Trust Barometer survey of 33,000 people in 28 countries recorded just 52% of respondents ‘trusting business to do what is right’. PwC report 58% of CEOs identify a lack of trust as an “imminent threat” to their business.

And that is just half the picture. Internally, business faces a crisis of engagement with 85% of employees ‘not engaged’ – and 17% so much so that they would sabotage their employer given the chance (Gallup). Additionally, maturing economies face a sustained productivity squeeze, which leading economists like Professor Francis Green attribute, partially at least, to engagement and motivation of employees.

 As business leaders, people no longer trust us to do what is right. And as employees they no longer care enough to give us their best

We may not need fear the tumbrel or the mob just yet but that is no excuse for us not to view these developments with acute concern and take responsibility to act.  The Friedmanian view that the function of business is solely profit and a return to shareholders is simply no longer good enough. 88% of CEOs and 90% of future leaders now believe that a business must have a meaningful purpose greater than shareholder value (Cranfield). That may make us feel better – but does a focus on ‘Purpose’ really address these fundamental threats to the sustainability of business as we know it?

The hard truth is that it absolutely does not. Our research with Cambridge and Plymouth Universities clearly demonstrates that ‘purpose’, however worthy, in the absence of three key cultural attributes has minimal or no impact on the beliefs and behaviours of stakeholders and particularly employees. In the absence of these cultural markers, purpose is simply blocked from making any difference – and in fact may actively damage the performance of the business.

Central to these cultural markers is trust – without trust, people at every level, but particularly middle management, are fearful, protective and unwilling to take responsibility to act on the purpose or to innovate. This reflects Paul Zak’s research in the US that finds high trust companies are fully 50% more productive. Anyone with the experience of the sclerotic culture of most UK corporate organisations, with their constant meetings to protect identities and interests and back-channel discussions, will understand why.

Purpose in the presence of trust definitively and measurably drives productivity

Yet purpose does have the power to transform effectiveness and drive unprecedented levels of productivity, innovation and growth. Our research shows that people who feel their company to be purposeful and high trust are dramatically happier and at least 30% more effective than the median employee. Put simply, purpose in the presence of trust definitively and measurably drives productivity and halves staff turnover.

All of which leads to the obvious question – how to re-build trust? We think we can answer that but before any organisation can hope to address it, it needs to understand the problem and where in the business it exists. By empirically measuring the impact purpose and trust are having on real people in real time and understanding how purpose works and where and why it is blocked, our ongoing work with Cambridge aims to give companies the tools to address the trust blight and unlock the true potential of their human asset.

Trust is not a mystery; it is an essential part of the human condition. Too many large, complex businesses have simply forgotten their basic humanity and are now paying the consequences. But trust is a cascade; once it starts to build, it creates its own momentum. And that leads to unstoppable change.

John Rosling
John Rosling, who is a writer and lecturer on entrepreneurship and Head of Thought at the Contexis Index CIC http://www.contexis.com

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