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“Unprecedented” has become the most overused word to describe the times we live in. And one thing is absolutely clear –effective leadership is crucial today in this period of change, crisis, and uncertainty. Leaders have to continue to focus on building long term relationships with customers and employees with energy and clarity.

But what leaders have to focus on most is on building ‘trust’.

The digital age demands higher trust

Digitalization has had an indelible impact on the world of work. The transformational changes driven by technologies and new business models are testing leadership. Technology allows us to work anywhere, anytime. Remote working and distributed teams are a part of every organization. Information can be accessed easily. So much has changed. With that much instability, without high levels of established trust all round, can the world of work, work?

The ABC of trust in today’s organizations

The evolution of the business landscape calls for a reassessment of the role of the leader. Quick decision-making, functional leadership, and the right personality traits remain relevant but are not enough to navigate this complex age. Leaders now must be agile, flexible, creative, and collaborative to lead successfully in this age. But to lead successfully you have to build ‘trust’. Trust is a prerequisite for extensive collaboration. It’s the force multiplier that allows leaders to mobilize teams to enable change, fuel the drive to innovate and empower highly-motivated teams.

There are three kinds of trust within an organization –

Strategic trust – This is the trust employees have that the organization (i.e. the people running the show) will make the right strategic decisions. The top management has to display the vision and clarity to set the right course and allocate resources intelligently to make the organization succeed.

Personal trust – This is the trust that the employees have on their managers and leaders. Will the employees be treated fairly? Do their views matter? Are their needs considered when leaders are making decisions?

Organizational trust – This is the trust that people have on the organization, beyond the individual. What does the organization stand for? Does it deliver on its promises to its employees and society? Is it a fair place to work in? Does it value the employees?

While these three kinds of trust seem distinct, they are interlinked. Each time a leader violates one, it impacts the others.

There is enough research linking trust with corporate performance. When employees trust leaders they work harder, are more invested in the growth of the company, stay with the company longer, and get more engaged. Trust makes a meaningful difference that leads to high performance.

Lack of trust, on the other hand, leads to employees becoming disengaged at work and spending more time updating their resumes than digging deep to deliver impact. In fact, a PWC survey revealed that 55% of leaders view the lack of trust as a threat to organizational growth.

In his book, The Decision to Trust: How Leaders Create High-Trust Organizations, author Robert F. Hurley states, “…Without trust, people are more anxious and less happy; leaders without trust have slower and more cautious followers; organizations without trust struggle to be productive;” He further states “…The lower the trust, the more time everything takes, the more everything costs, and the lower the loyalty of everyone involved. By contrast, greater trust brings superior innovation, creativity, freedom, morale, and productivity.”

Research shows that people who work in high-trust organizations as compared to low-trust organizations report:

  • 74% less stress
  • 106% more energy at work
  • 13% fewer sick days
  • 76% more engagement
  • 50% higher productivity
  • 29% more satisfaction with their lives
  • 40% less burnout

Employees want leaders that they can trust – in good times and more so during the tough times.

Trust is a clear marker of authenticity. People crave authentic connections. In the current environment of uncertainty and impending crisis, leaders have to be more centered on their authenticity and their desire to build trust. It is only when you give your teams a clear sense of who you are as a person, your strategic vision, and your core values that they can convey your authenticity. Of course, authenticity stems from not just talking the talk, but from walking the walk.

While situation have changed, the road to building trust is via good old-fashioned virtues such as clarity in communication, consistency, and the willingness to answer difficult questions and situations head-on. Inconsistent messaging, convenience-driven standards, misplaced benevolence, incorrect feedback, and the failure to trust others are the enemies of trust. They not only impact the relationship with employees but customers also.

Trust is a leadership instrument

Now, while we can actively fight these enemies of trust, we also need to understand that there will be times when trust is stressed to its limit within the organization. Events such as mergers, or layoffs, or structural changes…all of which are happening around us now, strain trust. However, when organizations have leaders who enjoy the trust of their employees, they can help employees feel safe during a crisis. Employees need visible, clam leadership, especially during a crisis. Without that, trust evaporates. And then you are left with employees who feel that they have to fend for themselves.

Trust is a crucial leadership instrument. It is a reflection of a leader’s commitment, courage, respect, and curiosity when they engage with others – be it employees, clients, or stakeholders. Sincere words and consistent action fuel trust. That, in turn, fuels high-performing and harmonious teams.

Of course, building trust takes time. It is the sum of all your actions and interactions that take place daily. It also is not a journey without hurdles and roadblocks. However, when you remain rooted in authenticity, navigating this journey becomes easier and more organic. And it’s the only real way forward.