Trust… the accelerator of global economic revival

Trust has been called the glue of healthy societies and the accelerator of economic productivity.

American writer on business management practices Tom Peters once described leadership as a sacred trust. He stated that the decision to lead is the decision to be responsible for the growth and development of your fellow human beings. He also was quoted by saying TRUST, not technology, is the issue of the decade.

The decline of trust must be addressed on multiple levels: by building “trust equity” in governments, in our economic system, and in each other. Building that trust equity requires making our institutions and ourselves worthy of trust.

As a starting point, we must recognize that to establish trust and trusted partnerships we must act with both high integrity and high competence in our personal and work lives.

Corporate leaders today are measured by a new yardstick. The supreme test of a CEO and board of directors is now the value they create not just for shareholders, but for all stakeholders.

To prosper in the age of stakeholder capitalism, companies must actively cultivate the trust of employees, investors, customers, regulators and corporate partners: developing strategies to understand these stakeholders more intimately, implementing deliberate trust-building actions, tracking their efforts over time, and communicating openly and effectively with key stakeholder groups.

Almost everywhere we turn, trust is on the decline. Trust in our culture at large, in our institutions, and in our companies is significantly lower than a generation ago. Research from Datapad when my company International Business and Executive management commissioned the trust report found that only 69% of employees did not trust senior management or their CEO. Consider the loss of trust and confidence in the financial markets today. Indeed, “trust makes the world go-’round,” and right now we’re experiencing a crisis of trust.

In any normality trust is paramount, but with world events never has there been a need for increased trust. My latest book, The Trust Paradigm, discusses why true transformation starts with building credibility at the personal level. The foundation of trust is your own credibility, and it can be a real differentiator for any leader.

A person’s reputation is a direct reflection of their credibility and it precedes them in any interactions or negotiations they might have. When a leader’s credibility and reputation are high, it enables them to establish trust quickly. Speed goes up, the cost goes down.

Moral and ethical leadership is the key to a successful business, yet it’s clear from the news that the leaders of some of our most influential governments and corporations are making morally questionable decisions.

These decisions will lose the trust of society, customers and employees. Trust is the foundation of high-functioning relationships and can only be achieved by meaningful dialogue. It is clear that this is not happening. Instead, we’re using electronic communication, where it should never be used.

Today I have the distinct pleasure of introducing a fellow author, retired Lieutenant Colonel Oakland McCulloch – he is a speaker and the author of the 2021 release, “Your Leadership Legacy: Becoming the Leader You Were Meant to Be.” Based on 40+ years of leadership experience (23 years as a combat arms officer in the United States Army), Oak highlights principles that will benefit today’s leaders and inspire the leaders of tomorrow.

Trust

If you want to be a leader, you must establish trust between you and the people you are to lead. Without trust that leader-led, relationship cannot exist. This is true whether you are leading a multi-million dollar company or a startup, a university, a hospital, sports team or anything else – it is universal.

“A team is not a group of people who play together, a team is a group of people who trust each other.”
Vince Lombardi – American Football Coach

When I talk to leaders, I talk about several ways to build that trust between themselves and the people in their organization that they have the privilege to lead.
The three main areas I emphasize to leaders are:
1) getting to know your people;
2) take ownership for everything in your organization;
3) improve communications within the organization.

Getting to Know Your People

Getting to know the people who you lead is vital to building trust between you and them. You must maintain the leader-lead relationship, but that does not mean you have to be standoffish or aloof from the people you are trying to lead. You can get to know the people in your organization and still maintain that proper relationship at the same time.

Getting to know the people you lead, really getting to know them, lets them understand that they are valued members of the team. It lets them see that you actually care about them, and not just as an employee but also as a person.

A good way to get out and see the people you are leading is to lead by walking around, not from behind your desk. In this way, you get out to where the people you are leading are actually working. You get to see what is going on in their area and get to interact with the people in their workspace – NOT IN YOUR OFFICE.

I make it a point when I am leading an organization, to find out one new thing about one of the people I lead every day. I make sure it is not something about the office or work, but something personal. Learn their spouse’s name, their children’s name, sports their children play, their hobbies, etc. While you are engaging with this person, be completely engaged with them. Make your conversation with them the most important thing going on at that point – do not allow yourself to become distracted.

Another good way to get out of your office and engage with the people you lead comes from something a mentor of mine, a retired Lieutenant General, once told me.

He said, “Oak, never turn down a chance to get your own cup of coffee. You, as a leader, do two things when you go get your own cup of coffee. First, you show people you do not feel above them. You are just like everyone else who wants a cup of coffee and can get it yourself – you do not need someone to wait on you. Second, it gets you out from behind your desk in your office and out among the people you are leading. Take advantage of your walk from your office to the coffee pot and back to stop and talk to people along the way. If you are lucky, you will have two or three different ways to get from your office to the coffee pot so you can talk to different people each time.”

Take Ownership for Everything in Your Organization

If you, as a leader, want the people in your organization to trust you, then you MUST take ownership of everything in your organization – GOOD and BAD. As the leader, you must give credit where credit is due for success and you must take responsibility for anything that goes wrong.

The advice I give leaders is this. When your organization accomplishes what they are supposed to then give all the credit to the people in the organization – and do that in public! If there were specific people who did a great job, then make sure to mention them by name. If your organization does not accomplish its assigned task, also in public, you take the blame – YOU, not anyone else.

Even if what went wrong was a direct result of something you did or a decision you personally made, you are still responsible. You are responsible for everything that does or does not happen in your organization – YOUR NAME, AND YOUR NAME ALONE, IS ON THE BLAME LINE!

I have always lived by, and hold the people I lead to that same standard; it does not matter if you made a mistake. What I care about is what you did when you made the mistake. Did you blame someone else, did you try to cover it up or did you come to me and say “boss I messed up, and here is how we are going to fix it.” I will tell you then let’s go fix it.

I had a boss, who eventually retired as a four-star general, who told me one day, “Oak, if you did not make a mistake today, then you probably did not do anything.” No one is perfect; we are all going to make mistakes. What you do after you make the mistake is what matters.

If you own everything as a leader and hold people (including yourself) accountable for actions and decisions in your organization then you start to build trust with the people you are leading. They realize that even if they make a mistake, as long as they own up to the mistake, then things will be fine. This is how you build trust with your people.

Communication Must Be a Two Way Street

The third way to help build trust between yourself, the leader, and the people you lead is through strong communication. That communication must be purposeful and two-way communication.

You as the leader need to make sure that all your communications, inside and outside the organization, begin with “We” not “I”. All messages from you, the leader, must emphasize that we are a team and everyone on that team is important. There is no “I” in “Team”!

People in your organization must feel comfortable communicating with you, the leader, about things good and bad. They must feel comfortable telling you the truth, about themselves, the organization, and YOU!

If you ever once “shoot” the messenger when they deliver bad news then you have guaranteed no one will ever deliver bad news to you again. You must encourage people in your organization to communicate anything & everything to you.

If you are a leader and you believe communication is your telling people things, but not listening to what your people have to say then you are not a leader. In that case, you are a boss at best and I promise no one in your organization will trust you.

Thank you Oak, this was very enlightening, and I know you are passionate about the subject of leadership!

I would like to add that it has always been my belief as a leader that to promote integrity and consequently increase trust, leaders should enhance transparency within the organization. This is primarily achieved by effectively communicating clear goals and a vision.

Transparency is valued by team members, as it gives them clarity on topics that matter to them and it clearly states a promise to deliver on them (this includes company purpose and vision). Leadership is not about control, based on trust starts from the assumption that your team members are competent and well-intentioned.

Building trust within organizations is not only key to withstanding current challenges but will pay off in the future. To inspire decision-makers to lead with the next generation in mind, leaders have more work to do to leverage the power of trust in their organizations, and the disruptions open up the opportunity for new paradigms.

To support decision-makers in deliberately strengthening relationships of trust within organizations, and to lead with the next generation in mind, our company IBEM has synthesised a comprehensive trust model. It provides a holistic view of trust-building measures along three guiding principles:

First, transparency is key. Trust increases if the organization’s goals are aligned with a coherent overall strategy and leaders communicate authentically in an honest, realistic, and targeted manner.

Second, enablement of the organization with the least surveillance and control mechanisms creates ownership and fosters positive behaviors.

Trust is the glue

We advise employing simple, well-reasoned principles instead of complex and rigid rules to encourage an output-oriented mindset and to consider individuals’ specific situations and needs.

Third, leaders should promote a culture of trust. Reciprocal trust flourishes when leaders embrace their own vulnerability, trust their team members by default and orchestrate informal relations of trust.

The main priority is not control, but how to enable your team members to take decisions independently and use their competence and motivation in the best possible way.

In addition to the measures that can be taken to promote integrity and leverage competence, trust is a key component of organizational culture.

Mutual care among team members, emotional bonds, and benevolence thrive in a culture of mutual trust. For leaders, this boils down to embracing vulnerability to promote openness, giving people an advance in terms of trust, and supporting trusting relationships that exist beyond reporting lines.

When achieving this state of mutual trust in the organizations, open and constructive challenges for the benefit of each individual and the organization will become the norm.
Embrace your own vulnerability as a leader and encourage openness. Leaders are perceived as role models. This doesn’t mean that they need to be perfect.

To the contrary: Showing one’s own vulnerability as a leader by admitting doubt and mistakes, promotes an open work environment. Mistakes and concerns are not covered up, with potentially harmful consequences for the organization – but voiced and discussed early on.

Trust is reciprocal, and how much you trust someone influences how much they trust you. Considering the capabilities, experience, and knowledge present in an organization, you are well advised to give your team members the benefit of the doubt. This creates a win-win situation: Teams feel empowered, and the organization saves resources on monitoring and control.

Try to thoroughly assess someone’s trustworthiness and alignment with the organization’s values right at the beginning of their affiliation with the organization.

Many world events and their consequences for organizations around the world have re-emphasised the imperative of nurturing trust within organizations. Leaders ought to seize the window of opportunity to double down on building and maintaining trust.

Most importantly, organizations that get trust right will gain a competitive edge in the ongoing war for talent.

Final thought, no heroic leader can resolve the complex challenges we face today. To address the important issues of our time we need a fundamental change of perspective. We need to start questioning many of our taken-for-granted assumptions about our business and social environments.

Leaders serve as role models for their followers and demonstrate the behavioral boundaries set within an organization. The appropriate and desired behavior is enhanced through the culture and socialization process of the newcomers.

Employees learn about values from watching leaders in action.
The more the leader “walks the talk”, by translating internalized values into action, the higher level of trust and respect he generates from followers.

To help bridge the trust gap we recognise that organizations need to work with each other and with wider society to identify practicable, actionable steps that businesses can take to shape a new relationship with wider society: a new ‘settlement’ based on mutual understanding and a shared recognition of the positive role that business plays in people’s lives.

To create such a settlement, businesses need to see themselves as part of a diverse, interconnected, and interdependent ecosystem – one that involves government, regulators, individual citizens, and more. Trust within and across this ecosystem is key to its long-term sustainability and survival. That’s why trust needs to be restored to the heart of the business world.

As Stephen M.R. Covey once said:

“Contrary to what most people believe, trust is not some soft, illusive quality that you either have or you don’t; rather, trust is a pragmatic, tangible, actionable asset that you can create.”

This article is the expressed opinions and collaboration between two senior-level industry board professionals on their views and perceptions on the subject matter:

Oakland McCulloch was born in Loudon, Tennessee, and raised in Kirkland, Illinois. After graduating from high school, he attend the United States Military Academy at West Point for two years. He then graduated from Northern Illinois University and received his commission as an Infantry Officer through the Reserve Officer Training Course in 1986.

In his 23-year career in the Army Oak McCulloch held numerous leadership positions in the Infantry and Armor branches. He assisted in disaster relief operations for Hurricane HUGO in Charleston, South Carolina, and Hurricane ANDREW in south Florida. His operational deployments include Operation Desert Shield/Desert Storm in Saudi Arabia and Iraq as a General’s Aide-de-Camp, the Congressional Liaison Officer in support of operations in Bosnia, and the Operations Officer during a Peace Keeping deployment to Kosovo. He held instructor positions at the US Army Ordnance School, the US Army Command and General Staff College, the Australian Command and Staff College, the University of South Alabama, and Stetson University. His last position in the Army was a three-year tour as the Professor of Military Science at the University of South Alabama where he led the training and commissioning of Lieutenants and tripled the size of the program in his three-year tour.

LTC McCulloch retired from the Army in September 2009 with over 23 years of active service and joined the staff at the Bay Area Food Bank as the Associate Director. He was also the Vice Chair for Military Affairs at the Mobile Area Chamber of Commerce and a member of the Mobile Rotary International Club. LTC McCulloch left the food bank in December 2010 to become the Senior Military Science Instructor and recruiter for the Army ROTC program at Stetson University in DeLand, Florida. In his 9 years at Stetson, the program grew from 15 Cadets to over 100 Cadets. In October 2013, he became the Recruiting Operations Officer for the Eagle Battalion Army ROTC program at Embry-Riddle Aeronautical University where he has more than doubled the size of the program in 6 years. Cadet Command selected LTC McCulloch as the top recruiting officer, out of 274 recruiters, for 2019. LTC Oak McCulloch published his first book in February 2021 – “Your Leadership Legacy: Becoming the Leader You Were Meant to Be”.

LTC McCulloch earned a Bachelor of Science degree in History from Northern Illinois University in 1987 and a Master of Military Arts and Science in History from the United States Army Command and General Staff College in 2002. He received thirty-one military service awards including the Bronze Star, eight Meritorious Service Medals, and the Humanitarian Service Medal.

LTC Oak McCulloch is married to the former Kelly Smyth of Wauconda, Illinois. They were married at Fort Sheridan, Illinois in 1987 and they have two children, Oakland Vincent McCulloch and Caileigh Nicholson. They also have a granddaughter, Ryleigh Jade Nicholson, and two grandsons Christopher Bryce Nicholson and Oakland Maverick McCulloch.

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Geoff Hudson-Searle is an independent non-executive director across regulation, technology and internet security, a C-Suite executive on private and listed companies, and a serial business advisor for growth-phase tech companies.

With more than 30 years of experience in international business and management. He is the author of six books and lectures at business forums, conferences, and universities. He has been the focus of TEDx and RT Europe’s business documentaries across various thought leadership topics and his authorisms.

Geoff is a member and fellow of the Institute of Directors; an associate of The International Business Institute of Management; a co-founder and board member of the Neustar International Security Council (NISC); and a distinguished member of the Advisory Council for The Global Cyber Academy.

He holds a master’s degree in business administration. Rated by Agilence as a Top 250 Harvard Business School thought leader authority covering blogs and writing across; ‘Strategic Management’ and ‘Management Consulting’, Geoff has worked on strategic growth, strategy, operations, finance, international development, growth, and scale-up advisory programmes for the British Government, Citibank, Kaspersky, BT and Barclays among others.

The trust Paradigm
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The Changing Landscape of Leadership: leaders needs to lead with trust

As leaders, our ability to deal with global disruption whether it impacts our organization’s supply chain, sales and distribution capability or cash flow is regularly being tested.

Whether we’re talking about disease outbreaks or financial crises, events beyond any individual or organization’s control can force us to sharpen our ability to lead in unpredictable times.

As global disruption ebbs and flows, what role should leaders play, and what strategies can you deploy to get ahead of this unpredictable curve?

Earlier this year, Odgers Berndtson released its Leadership Confidence Index 2022. It found confidence in leadership had almost doubled in the past two years, jumping from 24% in 2020 to 42% in 2022.

It is a striking statistic, and from it, one thing can be deducted with certainty; around the world, more leaders than expected are performing better than they were before the pandemic. Yet the statistic tells another tale. More than half of leaders did not perform well and lost the confidence of their teams and organizations. These juxtaposing circumstances reveal much about the global state of leadership performance and leadership acquisition today.

How we arrived at these circumstances is clear. COVID-19 resulted in a crisis where business as usual no longer existed.

In the newly created environment, many leaders rose to the challenge, adapted to the new state of play, and realigned their organizations with skill and purpose.

Ultimately, the pandemic provided an environment in which the best leaders could show ‘what they were made of’ and their capabilities shone through. If there was a single sentence summing up these types of individuals, it would be: “leaders who people will follow, not because they have to but because they want to.”

Yet 58% of leaders did not fall into this category. Unable or unwilling to adapt they stuck rigidly to the playbook of the past, applying outdated skills to a novel situation. Often, these were leaders more at home talking to their boards about share price and public opinion than having an honest conversation with those they led. Their capabilities centred around achieving market share and growth as opposed to managing disruption, or more importantly, inspiring teams to deliver results during disruption.

Many didn’t know what hit them, and were unable to swim in the current of the new world, and have or are currently being replaced. It has resulted in a new cohort of leaders worldwide.

This new breed of leader is organizationally facing. They understand that the board and their people are of equal importance. Their decision-making is often inclusive, they place trust in their senior executives and genuinely care about those they lead – not because it’s in vogue but because they genuinely value them.

These leaders often have a different thought process from their predecessors.

Their skills lie in reading market signals and adapting to them swiftly. They are strategists and change agents who can ‘see around corners’. They can extrapolate from major trends and take advantage of the findings, turning change into opportunity, and importantly inspiring others to deliver on that change. Behaviourally, they are more akin to an entrepreneur than a traditional manager; innovative, brave, humble, and naturally inquisitive with a desire to learn. Above all else, they embrace and even thrive on disruption.

Such a dramatic change to the leadership paradigm has dramatic consequences. Globally, the number of leadership searches has increased exponentially. Across APAC the search industry has seen 43% growth, while the reshuffle of executives in South America has resulted in double the normal number of searches we would make for general managers in Chile, Peru, and Argentina. In the UK, and across the U.S., the story is the same – explosive demand for new leadership talent.

Much of this demand can be laid at the feet of the pandemic. 58% of leaders were not up to the challenge and therefore need replacing. But another, more significant factor is also at play here; the expectation of the disruption to come. Our own Index reveals the majority of executives (79%) believe the level of future disruption will either increase or maintain at the same pace.

And we know that the majority of boards feel the same way and want to future-proof their organizations against this disruption with the sort of leader who can manage and take advantage of it.

But the supply is scarce, and on top of this, regional conditions have upended the leadership acquisition market. Across counties in APAC, zero-tolerance lockdowns and stringent work permits have resulted in an exodus of strong talent. Combined with a limited local supply and deglobalization shifting the traditional leadership footprint to other countries in the region, the pool of high-performing leaders is now almost completely different.

In South America, tourism has been in freefall, the cost of many raw materials has exploded, and crop yields are expected to be lower while the price of fertilizer has shot up. Political instability and a withdrawal of significant investment have added to the disruption. Even countries like Chile that have become accustomed to relative stability now face uncertainty. For leaders, the economic environment has been rewritten. Many are retiring and more are being replaced.

In the U.S. and the UK, technology transformation much like it is elsewhere in the world is no longer just a sector but a function of every industry. It’s challenging everything from business models and back-office operations to the very products and services a company sells. For years, the notion that leaders should be tech-savvy has been gaining momentum. Now it’s an absolute necessity, with a core skill being the ability to know which technologies to invest in, and which ones not to.

And across every industry and country, supply chain chaos, rising inflation, and the ESG and diversity agendas are near-universal challenges that are a leader’s responsibility to resolve.

The current climate has become a catalyst for exponential demand and short supply. What makes a high-performing leader is very different from what it was before the pandemic. At the same time, the business environment has altered who those leaders are, where they come from, and the types of skillsets they have. On the one side boards expect more of their leaders and on the other, there is a shortage of leaders who can genuinely deliver on these new expectations.

Yet they are out there. To find them, it will often require an organization to ‘go outside their lane’ and look for leaders in adjacent or even completely different industries.

It will mean genuinely leaning into diversity and inclusion and searching for leaders who are nothing like what has come before.

And it will mean enabling individuals from the second layer of senior management and helping them to step up. Above all, it means disregarding the traditional blueprint of what a leader should be and embracing the new leadership paradigm.

As a comparison, The Harvard Business Review recently released a study that examined how 1,890 senior executives around the world view their organization’s ability to manage disruption. The results were quite staggering: Only 15% of respondents expressed a reasonably high level of confidence that their leadership team is “fit to lead through future disruption,” while 61% reported being “tentative” and 24% are outright “worried.” The two top reasons given by executives who worry the most were lack of vision/buy-in and resistance to change inside their organizations.

The Conference Board, a global business membership and research association, noted similar findings in its C-Suite Challenge 2020 report: “CEOs’ internal concerns include talent and skills shortages, disruptive technologies, and building an innovative culture.”

Trust in our culture at large, in our institutions and in our companies is significantly lower than a generation ago.

In any normality trust is paramount, but given current world events, never has there been more need for increased trust, a shared understanding and language to talk about the specific behaviours that affect trust can result in more productive conversations about team performance. Those conversations can even create stronger bonds between leaders and employees.

But leadership trust isn’t a one-off initiative. It requires continued effort from all team members. And it takes leaders who are willing to show integrity, change behaviour, and take on the hard work of collaborating across boundaries and dealing with differences.

Research shows that trust represents a core human need we all have: to trust others, to be trusted in return, and to trust in ourselves. When trust is present, people align around the purpose of their team, embrace goals and objectives, willingly collaborate, and are empowered to do their best work.

When trust is absent, or made vulnerably, work becomes more difficult and takes longer to execute. With the pace of change in today’s organizations, leaders need trust more than ever before.

Trust means ‘uncompromised by doubt’. In the workplace, people can’t do their best work if they doubt others’ intentions or capabilities, the direction or viability of the organization, or, most importantly, if they doubt their own ability to keep up with the demands placed on them. This is especially true in today’s environment of complex change and ambiguity when employees are being asked to do more with less.

Leadership trust is reciprocal and created incrementally. To inspire trust from others, leaders need to also show trust in them. Over time these relationships build and maintain the trust that teams and organizations need to take action in a fast-paced world.

Our research underscores the need for trust in organizations. In high-trust environments, people show up and to do their best work. They gain productive energy, creativity, speed, and better results. They align around a common purpose, take risks, support each other, and communicate openly and honestly.

Effective leadership requires knowing how to build and keep trust, whether it’s with individuals, on teams, or across the organization.

Finally, there’s no question that disruption will continue to define the course of business and organizations. The challenge for you as a leader is to develop the mindset and organizational culture that will turn the forces of disruption into a catalyst for strategic thinking and creative execution. The term ‘trust’ has been overused forever and, during the last decade, considerably devalued. In The Trust Paradigm book, the authors aim to take the concept back to its essentials and to re-evaluate how real, meaningful trust can be incorporated into management and leadership.

A great quote by American Academic – Clayton M. Christensen:

“We have found that companies need to speak a common language because some of the suggested ways to harness disruptive innovation are seemingly counterintuitive. If companies don’t have that common language, it is hard for them to come to consensus on a counterintuitive course of action.”