This article originally appeared on Forbes.com.
In both business and our daily lives, concerns about data security, information credibility and the fishbowl of social media are climbing fast. According to this year’s Edelman Trust Barometer, 73% of respondents globally worry about false information being used as a weapon, and only 1 in 5 people believe "the system is working for them."
Businesses know they need to address this trust gap. A lack of trust is a significant threat to an organization’s ability to grow, according to more than half of the CEOs surveyed by PwC in 2016. Last year, Harvard Business Review Analytic Services reported that nearly two-thirds of global senior executives believe trust among people, businesses and institutions is declining. Among the culprits: cybersecurity exploits leading to misuse of corporate or personal data; scandals and indictments of prominent businesspeople; and the intentional release of misleading or inaccurate information, and its subsequent spread via social media networks.
Companies that want to strengthen trust are smart to begin with their own employees. Trust has become a source of competitive advantage: According to Harvard Business Review’s 2017 piece “The Neuroscience of Trust,” people in “high trust” companies report less stress, higher productivity and engagement, and less burnout.
Often, a trust deficit within a company is expressed as a series of frustrations underlying a broader and more fundamental set of issues. Many business executives are frustrated, for example, by their organizations’ inability to be more nimble, more creative and more entrepreneurial. A lack of trust may be what’s holding them back. Middle managers are paralyzed, fretting about what senior leadership might think. Meanwhile, the front line simply sighs at what they perceive as yet another program from the top.
As rewards increasingly flow to those who are able to build the trust-based organization of the future, business leaders will need to heed the trust message or risk ending up with an organization that’s neither as productive nor as effective as competitors’.
I see a growing number of trust-focused organizations today, and they take a common approach to three important aspects of business: leadership, communication and innovation. A global pharmaceutical company I know well exemplifies this trend.
For this company’s leaders, control is out. Empowerment and trust are in. A few years ago, the CEO—a physician by training—taught me how management had begun to add value in a different way. His foresight and humility were striking. “If we want people to take initiative on behalf of the customers they serve, think disruptively and bring creative ideas to the table, we as leaders need to empower them, support them and then get out of their way!” he told me.
Communication at this company is different as well. The traditional communication playbook would call for posters in the hallways, articles in the company newsletter and a couple of elegant town hall speeches. Nowadays one might add the smart use of digital engagement tools and tracking metrics like employee Net Promoter Score. What this CEO did differently was to inject a very personal dialogue into the mix. He started by hosting a series of small-group discussions about the future of the company as a truly patient-centric organization. This allowed people to engage directly with the CEO—not just in a Q&A session but as part of a true dialogue. Other executives began to hold their own two-way discussions, as did frontline managers. One by one, they each strengthened the fabric of trust throughout the organization.
A different leadership style combined with different communication tactics leads to a different approach to innovation. The world is moving too quickly for any company to rely on traditional methods of top-down, directed innovation. Across industries, the most nimble companies increasingly employ bottom-up, agile approaches. In this pharma company, a cultural shift toward empowerment and engagement naturally led to the formation of “patient value-creation teams” that work cross-functionally, in agile fashion, to innovate on behalf of customers.
The issue of trust that this CEO was attuned to feeds into a deeper shift underway today, a redefining of the role of business in society. In the Edelman Trust Barometer study, roughly three-quarters of employees say that it is critically important for their CEOs to take the lead on change—responding to challenges in industry and society—rather than waiting for government to impose it. The era of shareholder primacy in the business world is giving way to a broader definition of success and a call to action: Build the trust-based organization. Companies can answer that call by evolving their systems of leadership, communication and innovation.