Trust. It’s a key agenda item on many leaders’ list and a secret ingredient to success. But how can leaders get better at building, measuring and maintaining it? Trust is integral to organisations’ success—a fact that has become increasingly apparent over the past several months of socioeconomic and geopolitical challenges.
Punit Renjen, CEO of Deloitte Global, recently caught up with Sandra Sucher, a professor of management practice at Harvard Business School and coauthor of The Power of Trust: How Companies Earn It, Lose It, Regain It, to revisit a topic they explored one year ago: how leading organisations are building, measuring and nurturing trust in the midst of increasing internal and external headwinds.
Sandra Sucher: As we sit down one year after our original conversation, I’m curious about how you think trust has evolved, both personally and professionally?
Punit Renjen: Thank you Sandra. It is fascinating to watch the shift from what was mostly a nascent topic to the evolved understanding of trust as a company-wide guiding principle encompassing every decision, every team and every strategic ambition.
Trust is not just an outcome of success. It is essential to success.
It’s because of the work of leaders such as yourself and other academics who have delved into this complex topic that it is now part of mainstream discussions. At Deloitte, we have developed a rigourous and comprehensive Enterprise Trust offering comprising a trust platform based on the four factors of humanity, capability, transparency and reliability. Our global benchmark trust performance data set and industry-leading diagnostic capabilities help our clients accurately measure and quantify trust internally and externally across multiple organisational capabilities. In doing so, our goal is to help clients better understand what they need to do to earn trust with a wide range of stakeholder groups and then help them implement those actions.
Now that your book has been in the marketplace for a year, what are your observations regarding organisations’ interest and investment in trust?
Sucher: Astute directors, CEOs and company leaders have always intuited on some level that they and their organisations need to be trusted—on the upside, to innovate and grow and on the downside, to be sustainable and retain their licence to operate. Since the book’s release, prevalent social and economic conditions are causing organisations to expand their interest and investment in trust. Today, business leaders are expected to take a stance on systemic social problems like racism, sexism and income inequality. Helping to solve pervasive global problems requires unprecedented levels of co-operation—trust—between businesses and other societal actors.
With that in mind, the main question I hear company leaders asking, “What do I need to do to be trusted?” They are hungry for practical ways to understand how trust works. Some of that comes from people like me, who can explain, for example, why it’s useful to define trust as “willing vulnerability,” with an emphasis on willing and it’s where tools like the ones you have been developing at Deloitte can make the difference between hoping that you’re trusted and knowing where you are trusted, where you aren’t and by whom.
The reality is that we live in a world of huge uncertainty, with geopolitical tensions, a war in Ukraine, an evolving COVID-19 pandemic, inflationary pressures and recession worries. How can organisations advance strategic priorities like purpose, sustainability and gender equity in today’s polarised environment? Trust underlies each of these issues.
What advice would you offer to other leaders on how to maintain focus on these areas while they attend to the immediate issues that demand their attention?
Renjen: There is a link between organisations that instill a sense of purpose and their long-term success.1 Yet organisations are still not doing enough to help create a culture of benevolency and make a positive impact on all stakeholders. Building a purpose-focussed brand is not just about supporting social responsibility activities or completing a successful transaction, but about creating a culture where the goals of fiscal responsibility and contribution to the common societal good are not mutually exclusive. Much of my role at Deloitte has been around building this culture of trust in the offices in which we work and the communities in which we live.
Sucher: On a macro level, it is so sad to see the events in Afghanistan, Ethiopia, the conflict in Ukraine and legal decisions in the United States reversing decades of health and development gains for women and girls, which further undermines global peace, prosperity and security.
Renjen: I think this is a reminder that progress can be fragile. It means business and society must be diligent in continuing to push for progress even when it may be uncomfortable to do so. At Deloitte, we are in a privileged position due to our scale, reach and our people—leaders who are making an impact every day, working to move society forward and help deliver measurable results, not simply aspirational words.
As an expert on trust, what advice would you give to CEOs and board members looking to instill a culture of trust?
Sucher: Fundamentally, people’s trust in an organisation is based on their assessment of four related elements: competence, motives, means and impact. They form the foundation of my framework for organisational trust. At the most basic level is competence: People need to trust that the organisation can deliver products and services. Motives refer to whose interests the company serves and means refers to how fairly they treat others. Lastly, impact relates to whether the organisation takes responsibility for the ways its actions affect people’s lives. My research has shown unequivocally that each of these elements needs to be cultivated to build an atmosphere of trust.
It is possible to build a culture of trust and many organisations have used this framework to understand particular areas where they are gaining or losing trust. For instance, the first woman to be appointed CEO of an investment bank in Saudi Arabia successfully applied this framework to gain the trust of internal and external stakeholders who, at the outset, questioned her capability. Faced with an impending crisis, the CEO of a fintech company applied the framework to restore trust with customers in the face of a social-media–induced run on the bank.
It’s important for directors and CEOs to understand that trust is built from the inside out. It’s nearly impossible to build trust with people outside your organisation if you don’t have the trust of people on the inside. To create a culture of trust, you have to demonstrate that you understand what your employees expect, need and value. That doesn’t mean that they will always agree with your decisions. People disagree. But it builds trust when you can show that you’ve taken their perspective into account.
One last piece of practical advice I’d offer to boards and CEOs relates to maintaining trust within organisations during economic downturns. I’ve spent more than a decade studying layoffs and they hugely diminish trust. One way to retain trust is to draft a recession playbook that looks to layoffs as a last resort and focusses on the many costs that can be cut before they are used. If layoffs are needed and sometimes they are, leaders can develop programmes that support soft landings. This helps not just those whose roles have ended but it also helps employees who remain with the company to maintain their trust in their employer.
Renjen: Thank you, Sandra. To turn to the tactical—and I know this can be the most challenging part of our discussion—what can organisational leaders do to implement trust foundationally?
Sucher: Great question, but not a simple one. Trust begins with communication. Organisations can take steps to get ahead of a trust crisis through transparency, understanding and listening. Most organisations do a pretty good job of articulating the things they’re doing and why—but they should get crisper in describing their understanding of others’ perspectives and how their actions impact them. It goes back to the idea that trust is a judgment that other people make of us. Does this company care about my interest as well as its own? Is this company being fair in how it treats me? Is this company taking responsibility for the ways they have touched my life? These are the kinds of questions leaders should be prepared to answer for investors and the other stakeholders who are essential to their success.
Should a crisis occur, CEOs often get mired in issues of potential legal liability at the expense of brand liability, wherein instead, there should be a balance between the two. To be certain, CEOs have fiduciary responsibility to protect the financial health of an organisation, but they also need to create an atmosphere of integrity, truth and realism. There’s a formula for a good apology: Acknowledge what you’ve done. Explain why the problem occurred. Make an offer of repair, whether that is fixing the problem or making the other party whole. Put the stakes in the ground that matter, instead of putting dozens down without thinking about their impact.
I will leave you with a closing question: A year from when we first spoke, how has your own personal understanding and perspective on trust evolved?
Renjen: The events of the last year reiterated to me the importance of building trust with both internal and external stakeholders. As you may be aware, Deloitte made the decision to separate our Russian and Belarus practices from the global network of Deloitte firms. This was the right thing to do, but it was difficult nonetheless. Open and transparent conversations are at the heart of such decisive leadership actions, which are even more critical now to sustaining our people. Such conversations enable us to deliver truthful messages and real-time feedback amid the crisis and require courage.
I am proud of the investment and progress that we at Deloitte have made in trust and I am excited to continue our journey in this area as we bring new global markets into our trust offering and expand and enhance our capabilities.
We are excited to continue this collaboration and we look forward to many more conversations.
As we recover, reopen and rebuild, it’s time to rethink the importance of trust. At no time has it been more tested or more valued in our leaders and each other. Trust is the basis for connection. Trust is all-encompassing. Physical. Emotional. Digital. Financial. Ethical. A nice-to-have is now a must-have; a principle is now a catalyst; a value is now invaluable. Trust distinguishes and elevates your business, connecting you with the common good. Put trust at the forefront of your planning, strategy and purpose, and your customers will put trust in you. Deloitte can help you measure, enhance and amplify trust in your organisation.