Trust is the confidence and unwavering belief in the reliability, truthfulness and ability of an individual, collective or organisation.
It’s like an invisible currency. As with all currencies, there are those with it and those without. For those who have earned the trust of their stakeholders – whether that’s customers, employees, shareholders, suppliers or the community at large – doors begin to open, opportunities abound and people willingly follow, engage and unite with them for a common reason.
For those who don’t have the trust of their stakeholders, life becomes an uphill battle, they struggle to gain momentum or gather the critical mass of support that’s required to help them fulfil their potential. It’s a life half-lived. They lack impact.
According to Edelman’s 20th Annual Trust Barometer report, 72% of Australians lack trust and confidence in our Business, NGO, Government and Media institutions.
How can organisations and their leaders earn trust?
Trust, the report explains, is built on two key ingredients: competence and ethics. Competence refers to an individual’s or an organisation’s ability to get stuff done. Ethics refers to the principles that govern a person’s or organisation’s behaviour as they go about getting stuff done. It’s what they do (competence) and how they do it (ethics).
Whilst some leaders and organisations may be focused on one of those ingredients, far too few have both in the measure required to successfully earn and sustain trust.
According to the report, here in Australia, it seems that no major institution (Government, NGOs, Business or Media) is seen as being both competent and ethical. Whilst businesses are cited as the most competent of the institutions, the commercial world is still seen as largely unethical. The result? Increased distrust amongst the Australian population.
Misplaced focus on competence
In their quest to find a competitive advantage, reduce costs and increase profit, businesses and their leaders typically place their focus on building and demonstrating competence as a means of building trust with their employees, customers, and other stakeholders.
Perhaps this is unintentional.
Perhaps it’s easier to operationalise and measure competence and the impact it has on the bottom line.
Perhaps it’s the path of least resistance. After all, creating a strong ethical culture takes time, effort and resources that don’t easily connect back to key business measures.
Regardless of why, the research shows that the key ethical drivers of integrity, purpose, and dependability are collectively seen as three times (76%) more important to building company trust than competence and ability (24%), meaning that organisations are focusing on the wrong the levers.
The lesson for leaders
To be trusted, there’s no denying that you need to be capable of delivering on your promises. But it doesn’t stop there. How you go about delivering on those promises plays a critical role in building trust.
Ask of yourself, your team and organisation:
- Do we always act with integrity?
- Can our stakeholders – our employees, customers, communities – rely on us to serve their interests honestly and fairly?
- Are our actions and decisions driven by a clear purpose that goes beyond making a profit, to improving conditions for the people we serve?