Rebuilding A Culture of Trust In the Post-COVID Economy
Introduction
When the COVID-19 crisis struck one economy after another, corporates realized that there was no ‘how to cope with a global pandemic’ playbook or culture manuals. We have seen global disruption of businesses and service providers of all types, with consequences which do not only include plunging revenues and job losses, but a weakening of organizational culture. Office workers are forced to stay home and work from living rooms or kitchens, while companies scramble to find the necessary resources to keep operating in the new normal. While contact among many workers in today’s digitalized world had already been moving offline, the pandemic forced a step change in the transformation of communication practices and the organizational culture behind them. This paper aims to show and highlight the importance of trust in organizational relationships therefore rests on consistently ethical behavior.
With no more morning meetings, water-cooler moments, and open plan offices to facilitate communication and contact, managers at all levels are having to find new ways to influence their organizations and reassure stakeholders while considering the impact the pandemic is having on the experiences of their labor force and the bonds of trust which hold an organizational community together. A complex mix of human and design-centric approaches is necessary to ensure organizational culture stays healthy and positive, and for managers to determine what is and what is not acceptable in new circumstances and how to persuade their work force to follow them in adopting change. If employee trust is lost or damaged in the process, it is not only difficult to recover, but can have serious consequences for the bottom line.
New Considerations
The lockdowns and stay-at-home restrictions which have left office buildings empty across the world’s cities were a particular shock to the bigger corporate players. For SMEs and start-ups, however, there was an unexpected upside to the new situation, in terms of its effect on organizational culture1. Many commentators have noted the ‘wartime spirit’ which emerged in communities, including corporate ones: resilience and a new sense of unity. Despite the physical distance enforced by the pandemic, employees felt they were all in it together and found a new commitment to the organizational mission and vision.
However, circumstances are now changing again as vaccines come on line, economies are cautiously starting to recover, and some organizations are asking their employees to return to the office, albeit two meters apart, wearing masks, and with hand sanitizer on every desk. Reactions to this resumption of something approaching a normal working life have been mixed: Some employees have not only been happier working from home but have realized they can be just as productive there, if not more so, while others have struggled and cannot wait to get back to the social environment of the office.
For management, meanwhile, the whole experience has raised questions which may have an even greater impact: do they really need all those staff? And such large premises, with all the associated running costs? Although public- and private-sector organizations have reduced personnel and other costs as part of a survival strategy just to get through the pandemic, the pressure they are in to achieve ever more productivity remains. Is it possible, then, that the enforced change in working culture unexpectedly presented ways and means to increase shareholder profit? These are among the matters under consideration around board tables as senior management embark on drawing up forecasts and business plans for 2021 and beyond. Pressure to up their performance is increasing as the world economy tries to rebuild itself and patience will start running out.
For our purposes, all these questions emerging from the pandemic converge into three points:
· How do these changes and realizations affect organizational culture?
· Are leaders aware of the possible impact they will have on employees, customers, and shareholders?
· What responsibility do businesses have to these three groups?
Of course, the last point begs the question of whether a business can actually have responsibilities, as discussed by Milton Friedman5. We, as people, have responsibilities and if we consider an organization to be an artificial person, we can posit that it therefore has artificial responsibilities. However, we cannot attribute even this vague notion of responsibility to “business” as a whole. To take this further, we need to start unpicking the doctrine of the social responsibility of business by pinning down who is responsible to whom for what. The most obvious answer is that responsibility lies with proprietors or corporate executives, but any meaningful investigation of responsibility, and its flip side, trust, cannot stop there.
What is Trust?
Trust2 does not only arise from practical considerations; there is a strong emotional element to it. Trust will be engendered in employees if they feel, on an emotional level, that organizational management, or individual line managers, are ‘on their side’: that they can expect to be treated with respect, not be held accountable for setbacks due to circumstances outside their control, and will be given a fair hearing. When a leader manages to construct this sort of emotional relationship with his employees, the latter are more likely to have confidence in his decisions, even when outcomes are uncertain. In particular, they will believe that if he says he is going to do something, then that is what he will do.
In other words, they believe that a leader’s actions will be in line with his words, and the importance of this belief - this trust - for organizational success cannot be overstated. Multiple researchers have found that the single most important factor in employees’ perception of their organization is their leaders’ behavior3: what they say and what they do. When a leader’s words do not align with his actions, employees become disengaged and commitment drops. Organizational leaders seeking to take their workforce with them, especially through programs of change, have to demonstrate a clear and consistent alignment between words and action. Every level, starting from the top, must work to reinforce the perception of believability, as this forges the link between leaders and followers and fosters the joint effort required for success.
At the core of the drive for trust based on believability are ethical decisions about the methods used to judge people’s chosen behaviors. Ethics derives from moral philosophy and fundamentally concerns the difference between right and wrong. A system of ethics aims to formulate systematic and objective criteria to judge or justify actions in a culture in which people are free to choose how they behave and have the tools to select behaviors within a consistent and clear framework. An organization requires a framework of moral analysis which reflects its core values and beliefs if it is to take - and be able to justify - consistent, considered moral decisions. This framework is essential to the creation and retention of trust.
Secondly, the ethical framework and the values it encapsulates must be institutionalized; these core moral beliefs and values must permeate every part of the organization and underlie every decision taken. Practical means to operationalize ethical values include discussion and the use of reward systems; whatever means are adopted, however, the essential point is that the framework and the judgements, actions, and responsibilities which flow from it are consistently applied and carried out. If there is no consistency, the organization will not win the trust of employees or other stakeholders as a result. If, on the other hand, consistency is demonstrated over a period of time, satisfying expectations, it will be rewarded with the trust of the community, whether work force, consumers, suppliers, or the wider public.
Netflix4 offers an example of an explicitly articulated workplace culture, under the banner of “people over process.” The company has a dedicated ‘company culture’ document in which it enumerates its values (judgment, communication, curiosity, courage, passion, selflessness, innovation, inclusion, integrity, and impact) and states it expectations that these are respected by employees at all levels and in all aspects of their work and relationships, with the aim of fostering creativity, collaboration, and success.
While some organizational cultures are expressly and deliberately constructed, in other cases they may have grown organically and never been formally articulated. Company culture encompasses a variety of elements, including work environment, company mission, leadership style, values, ethics, expectations, and goals. To maintain a strong culture, the institutionalization of ethical values is a never-ending process and relies heavily on efficient communications. Importantly, too, it has to be led from the top: by the CEO and senior management. It is the leader who must ultimately make ethical awareness ‘happen’ when the values and behavior of the organization are at stake. CEOs and other senior leaders do not operate in a vacuum and require efficient public and internal relations back-up to create an ethically-centered culture. Frequently, the person called on for ethical advice is the most senior public relations officer, who should have perceptive insight into the values held by communities of strategic importance for the organization and thus be able to predict possible responses to decisions.
The Emotional Bond
In my current position as leader of what the outside world considers a design firm but which we regard as a family, I consider the matter of leadership from two perspectives, those of the leader and the follower. It strikes me that if leaders do not empower the potentially valuable, they fail, and their ability to identify those who need empowering requires them to have a certain degree of self-knowledge. They must identify, interpret, and leverage emotional information about themselves to know what results in a more effective performance.
Employees look to their managers to help them develop their careers and improve themselves and their position within the organization. They trust the manager to have their best interests at heart and be willing to seek out and work towards whichever path leads to the best outcome for all parties. When this type of trust exists, it boosts all other elements of productivity in the workplace.
One of my favorite books for Simon Sinek6; states that “No one leads a company. A company is a legal structure you can run a company, or you can manage an organization but you can lead only people.” Sinek’s vision reinforced my belief that understanding individuals is at the core of leadership: realizing that what gives one person joy and excitement may leave another stressed or uncommitted. For a leader to foster ethical behavior in others, he must first define his own ethical values and ensure he lives by them, whether they align with other people’s or not. Given our situation today, when no one knows what the future holds, it is more important than ever that a leader starts by preparing himself before he embarks on preparing his organization for change.
Clearly, the personal integrity of the leader will not be sufficient in itself to create and sustain a culture of organizational trust. Multiple other elements must be in place, such as the right skills, smart back-up, and commitment to the program by top managers. It is important to realize that organizational trust is a different and far more complex being than trust between, for example, a consultant and a client. When a client comes to you for consultancy, you are largely in charge of the communication between you. This is not the case in an organization, where employees receive constant, sometimes contradictory, messages from numerous sources. Likewise, whereas you and your client can agree on a clearly defined and mutually beneficial outcome, an organization can encompass multiple groups with multiple, sometimes conflicting, goals. Lastly, if your client wishes to express a grievance or a disagreement, he can easily do so and it can be thrashed out or one of you can walk away. If these problems crop up within an organization, even an organization you lead, you will not necessarily know about it and neither party can make a clean break from the other. And if shareholders or other strategic communities think that the organization, or an individual within it, has acted in bad faith, that grievance may well stick around, permeate the organization and spoil relations. People today rarely forgive a breach of trust and they never forget one.
The Oil in The Engine7
The global challenge we are facing cannot be overstated, and we are going to have each other’s backs to meet it. But this is the lesson we need to learn, nearly a year into the pandemic, as we are all trying to resurrect a normal way of life. We all have a part to play in decisions around the return to work, whether we lead health authorities or national, state, or local government bodies, run corporate behemoths or two-person start-ups, or work for them.
We also have to remember, in this delicate situation where trust is of the essence but perhaps more fragile than ever, that we work in an environment where, sadly, corporate abuse of trust is the stuff of daily headlines: broken contracts, data leaks, allegations of racial discrimination and sexual harassment; job cuts on the assembly line while top managers pocket massive bonuses. We can link a breakdown in trust in many companies to the huge financial rewards earned by top CEOs, combined with a perception among employees that management regarded them as dispensable when faced with the possibilities of automation, crisis, or a changing business environment.
According to a 2020 study by Deloitte8, no institutions, whether corporate, public-sector, the media, or even NGOs, were regarded as both ethical and competent; worse, none was perceived as fair. Moreover, recent research suggests that as much as 30% of today’s workforce expects to experience some form of cultural crisis over the next two years, given the organizational culture of their workplace and their lack of trust in their employers. These crises cover events from sexual harassment, gender discrimination, and financial mismanagement through cheating of customers, inattention to safety, and poor behavior from leaders. Shockingly, well under one third strongly agreed that their company’s actions align with its stated values, while the vast majority did not.
A widespread decline in our trust in the institutions which are meant to protect us has gone hand in hand with fears about employment, social equality, the economy, and whether we can truly trust the information we are given. Oracle Corp., Wal-Mart Stores Inc., Microsoft Corp9. - these are just three examples of large, heavily-publicized programs of workplace reduction in recent times. There is also another powerful new source of information which can, rightly or wrongly, undercut trust: social media, which have set themselves up as watchdogs on corporate wrongdoing.
One of the strong signals here is; when employees no longer feel inclined to collaborate because they feel unvalued or untrusted, the parts start grinding and innovation ceases, and that is an intensely important responsibility of the leadership to rebuild trust.
Rebuilding Trust
Despite the undoubted tragedies caused by the pandemic, in both human and corporate terms, it may also offer a catalyst to rebuild waning trust. Trust is an essential element in rebuilding after a crisis, as without it, critical information cannot be circulated - whether about vaccines, job prospects, or salaries - and confidence will plummet. When scientists and politicians talk to us about “flattening the curve” and the need to practice social distancing, we have to not only trust that they are telling us the truth but each other to act in the common interest. Given the pandemic continues to cut down swathes of people across the world, upholding trust is more important than ever and, as individuals and business leaders, we have to acknowledge this and talk about it if we are to navigate these rough waters and maintain our resilience.
Trust is critical in recovering from the COVID-19 crisis, and the recent decline in this precious commodity is both a threat and an opportunity for employers. We are more actively looking for someone to trust than we have been for some time, and there has been a surge in the desire to find connectivity and unity of purpose and action, seen across community relationships, actions, and expectations of others, including institutions and businesses. We want to trust that we can rely on help from those charged with our care, live safely in our communities, and be told the truth. Yet just as we most desperately need, and want, trust, we are also skeptical: We have been let down by many once trusted, even revered, organizations. We are bombarded by conflicting information. ‘Fact checking’ has become a daily activity. Leaders of all types are not given the automatic trust and respect of the past. Standards are higher: trust has to be earned.
Hence, in this situation, if leaders are willing to consistently demonstrate they can be trusted, if necessary by explicitly observing higher standards of transparency and accountability, they will reap the rewards. The market craves trust: offer it, and your employees will repay the investment.
Communications
The value of smart, transparent communication in building and embedding trust in the workplace cannot be overstated. However, although we all know communication is important, most of us are guilty of at least occasionally putting it to the back of our minds in order to concentrate on apparently more pressing tasks. Moreover, although many organizations are placing greater priority on internal communications in recognition of the value of the employee experience, this type of communication cannot be formally imposed top-down: it needs to be organic, sustained, and happening at every level and in all relationships. Until consistent, truthful communication is established, workplace trust will remain fractured. The new culture of trust must not only reflect organizational missions, values, goals, and expectations, but be able to cope with a volatile business environment. Vigilance is key: organizations which can ensure they can draw on a well of trust are better placed to identify vulnerabilities early and take the necessary action.
References & Citations
- 1 BJ Jenkins, Forbes Councils Member, Keeping Company Culture Strong During The Next Post-Covid-19 Phase 2020
- 2 Harvard Business Review Publication- From the magazine
https://hbr.org/2003/02/the-enemies-of-trust
- 4 Netflix Jobs and Culture: Entertainment, like friendship, is a fundamental human need; it changes how we feel and gives us common ground. We want to entertain the world. If we succeed, there is more laughter, more empathy, and more joy.
https://jobs.netflix.com/culture
- 7 American behavioral economist and psychiatrist Richard L. Peterson and sports consultant Frank Murtha noted in 2008 after the financial crisis: “Trust is the oil in the engine of capitalism, without it, the engine seizes up. Confidence is like the gasoline, without it the machine won’t move."
- 8 Deloitte Insights: Embedding trust into COVID-19 recovery
- How is COVID-19 reshaping our company culture
https://www.workspace.co.uk/community/homework/covid-19/how-is-covid-19-reshaping-company-culture
- Ethics (Leadership, The Trust Gap in Organizations by Jolene Lampton December 1,2017
- Definition and Examples of Company Culture: Alison Doyle, September 17, 2020: Company culture is the shared values, attributes, and characteristics of an organization. Identifying an organization's company culture and why it is important.
- 9The consequences of declining trust in CEOs
Books & Journals
- 3 Speed of Trust: The One Thing That Changes Everything Paperback – February 1, 2008 by Stephen M .R. Covey
- 5 The Social Responsibility of Business is to Increase its Profits by Milton Friedman , published in the The New York Times Magazine, September 13, 1970. Copyright @ 1970 by The New York Times Company. Milton Friedman
- 6 Start with Why: How Great Leaders Inspire Everyone to Take Action by Simon Sinek. 2011 Simon started a movement to help people become more inspired at work, and in turn inspire their colleagues and customers. Sinek calls this powerful idea The Golden Circle, and it provides a framework upon which organizations can be built, movements can be led, and people can be inspired.