Elizabeth Holmes, Theranos founder and CEO
By Joel Peterson
June 13, 2016

Trust is fundamental in business, in politics, in life. Most of us think we deserve it. And even the wariest among us regularly rely on trust when boarding planes, eating at restaurants, or following a doctor’s advice. So, if trust is central to managing our daily lives, why the recent crises of trust?

Just days ago, seven automakers announced they were recalling 4.4 million more U.S. vehicles with defective Takata air bag inflators; that’s on top of 12 million cars already recalled by a total of 15 manufacturers so far this year???? Add to that the 2015 Volkswagen debacle over software installed in millions of vehicles that was deliberately designed to fool emissions tests. Chipotle (cmg), Theranos, FIFA, HSBC (hsbc-holdings-plc) have all recently faced their own issues over trustworthiness. And of course, polls show that neither of the presumptive presidential nominees is trusted by more than a third of the electorate. More than positions on specific policy issues, it’s the absence of the public’s trust that defines them – and politicians in general.

Despite a growing mistrust of business, political and, even non-profit leaders, an ageless truth remains: humans have a natural inclination to collaborate. Trust not only makes life more enjoyable, it multiplies our potential. Countless studies in management and social psychology show that collaborative teams beat individual performers, and high-trust groups beat low-trust groups. Compare the results of a single 400-meter sprinter with the times of any 4×100 relay team to appreciate the power of collaboration.

Even with our current deficits in trust, the good news is that high-trust cultures can be built and trust can be restored. The process must be done one conversation at a time, one decision at a time, and one leader at a time. Here’s how:

Start with leaders who have integrity

High-trust cultures depend on leaders who deliver on what they say. Such leaders also don’t compartmentalize their lives, hypocritically appearing trustworthy in public while violating trust in private. When team members figure out – as they always will – that there’s discontinuity between what leaders say publicly and what they do privately, the outcome is invariably cynicism, lowered commitment, and political maneuvering. If you don’t have a leader with integrity, don’t hope for a spontaneous outbreak of trust. And don’t expect to recruit and to retain the best people.

Show respect to all stakeholders

This includes honoring employees, customers, investors, suppliers, even competitors – even where there is conflict. Respectful conflict is a safety valve that allows everyone to get behind a decision once made, rather than continuing the debate underground. The greatest expression of respect comes from empowering team members to do their best, rather than legislating to keep them from doing their worst. Not only do thick policy manuals represent organizational scar tissue, but they often represent centralizing decision-making. High-trust cultures tend to show respect by distributing power deep within the ranks, as close to the action as possible.

Communicate lavishly

High-trust leaders deliver bad news as well as good news before, during and after events. They do it without spin. High-trust leaders also give clear feedback, are transparent about goals, and publish standards. And, from a decade of bringing more than 100 top leaders into the classroom at the Stanford Graduate School of Business, I’ve concluded that leaders are often storytellers, capturing the narratives that communicate the core values of the enterprise.

With these three principles in mind, effective leaders can move the needle, enhancing or recovering trust levels. But it’s a long road, traveled one meeting at a time, one on-time and on-budget project at a time, one careful hiring or firing at a time.

Yes, high-trust cultures must sometimes recover from betrayals of trust. I saw that firsthand at JetBlue. After a 2007 winter storm caused massive delays at John F. Kennedy International Airport – in what became known as the Valentine Day’s Massacre – the airline stranded passengers for hours on the Tarmac. Although there were many contributing factors, JetBlue Founder David Neeleman took full responsibility and then created the industry’s first customer bill of rights. At the time, I wondered if we might be going too far to keep trust with customers at the expense of business profitability. I was wrong. David was right. And JetBlue recovered the trust of its customers and today enjoys a great customer-friendly reputation.

For any organization or leader to succeed in the long run, trust is essential. It’s not a vague or fuzzy concept, but a hard-edged set of rules, with mechanisms for both securing it and recovering from its occasional failures. Above all, a culture of trust depends on intentional, disciplined leaders committed to nurturing trust as a precious off-balance-sheet asset. These days we’re reaping a harvest of wariness, of unresolved conflicts, of failures to communicate clearly, act with integrity, and show respect.

For our businesses – as well as families, schools and government – to work, leaders must renew the principles required to build, maintain and restore trust. Any organization that does so can turn its failures into preambles for success.

Joel Peterson is the chairman of JetBlue and an adjunct professor at the Stanford Graduate School of Business. He is also author of, The Laws of Trust.

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