Restoring Corporate Trust – Why We Must Try

 

by John Keyser

When I previously wrote about earning trust with co-workers, a friend, a true leader in the public policy field, called to suggest that a closely related and equally important subject is restoring corporate trust.

I immediately went to sit on my front porch and think about his observation. I absolutely agree. The state of corporate morality is at a critical juncture, and there is a real need for companies to commit to the long-term process of regaining lost trust.

Can it be done? Not easily, that is for sure. And with the pressure from Wall Street to maximize earnings every 90 days, it will take special leadership of any publically traded company to restore trust.

Here’s the background from my standpoint. In the late 80s and early 90s, many companies in the U.S. were striving to improve customer service, productivity, processes, employee satisfaction, and to help their people grow and succeed. Very admirable objectives, for sure! This was the Total Quality Movement that was gaining great attention.

It was exciting – we all felt it: that everyone can make a difference, everyone can satisfy a client. We were totally open to new ideas and found that the best ideas are bottom-up. Our co-workers became our internal clients, and we all strove for continuous improvement, individually and as a team.

The quality movement took hold more quickly and effectively in some companies than others, depending on leadership and other factors. In most companies, their people were becoming more excited, engaged, and working more purposefully and collaboratively. I believe most companies would have achieved significant improvement in their service, their productivity and their financial results.

What happened? Why did the quality movement – the emphasis on people, their development, and their ideas about how to improve customer service and productivity, and not simply quarterly numbers – disappear?

What I saw was this: the investment banking community asked CEOs and high level corporate managers how much they were investing in “quality;” how did they know it would pay off, and how long would that take? Why not just acquire a competitor and then lay off people, to maximize profit?

The rest is history. Essentially, much of Corporate America, spurred by the investment community, focused on growth by acquisition and reducing expenses by eliminating people – and ceased investing in their people and striving for continuous improvement as a team.

That was an expedient way to make money for their stockholders (and while it was not discussed, a way for corporate management to become wealthy, and yes, for the investment community to make million dollar fees).

And so the quality movement was replaced by the rush of acquisitions and layoffs. Layoffs by the thousands. Good people, who had been loyal to their companies, who were doing good work, who had families and outside responsibilities, and who did not deserve to be laid off.

I remember well, as I grew up in the business communities of New York and Chicago, counseling people to “choose the field you love, get with the best company in that field, do a great job, and make that your career – loyalty pays off!”

That was good advice – at the time!

Then came conglomeration, consolidation and the frenzy of acquisitions, and the enormous demand and pressure to meet or exceed quarterly earnings estimates for publicly traded companies.

There were no more guarantees that loyalty would pay off. In fact, way too often, just the opposite occurred. When I was in Chicago with Johnson & Higgins, I saw so many great companies that were not only Chicago institutions, in many cases they were America’s institutions, that were taken over by new management, and to drive expenses down, very often thousands of good people were let go. These were people who had been dedicated to their companies and were doing good work.

Today, a great many talented young people leave college and graduate schools with a strong desire to be in control of their own destiny, to be an entrepreneur or to join a small or mid-size company. Sure, some want to go with a financial institution, consulting or marketing firm specifically for the experience and training, with the intent to leave and then join a start up or a smaller business. I’ve read that currently young people are in a job an average of 3.7 years.

Who can blame them? They know there is little assurance that loyalty will pay off.

Trust is gone in so many instances, often because of the actions and failures of the predecessors of today’s senior management, and there are plenty at the helm today who have done little to try to restore trust. Wall Street still influences senior management’s behaviors, every bit as much as it did during the past 30 plus years.

Can corporations regain the trust and loyalty of its people?

They certainly should try. Yes, in publicly owned companies, it will be challenging, and it will require exceptional leadership. Clearly, regaining the trust that has been lost over the past 30 or 40 years will take a strong unwavering commitment to restore that faith.

Trust must be earned. It requires an attitude of servant leadership, with helping our team members a top priority, and wanting our team to be a community founded on strong and loyal relationships.

Publicly owned companies need servant leaders, women and men who not only drive for results, they put equal focus on their people and organizational culture. People need a sense of purpose and meaning in their work along with a paycheck. Yes, even on Wall Street. Maybe especially there, where morality tanked and many people felt humiliated.

We can look to the success of Southwest Airlines to see how organizations can meet their targets while serving their people. Colleen Barrett of Southwest motivated 35,000 employees and kept 96.4 million customers happy at the same time. She is thought of as inspiring and supportive, a servant leader. She led with a shared vision for the company, and supported her teams, who did their very best work.

Starbucks, Medtronic, Wegmans, REI, Best Buy, UPS, Ritz Carlton, Room & Board, Whole Foods, Luck Companies and TDIndustries are succeeding with servant leadership at the senior level. This is because of senior leaders who connect with their team members – who inspire and communicate a meaningful shared vision for their company, and then give their team the responsibility and authority – and trust – to do the job and succeed.

How is this done? The leaders of great companies have to free themselves up, get off their floors, get out of the endless flow of meetings and treat their team members as their internal clients. They need to show they genuinely care about them and want to help them learn, grow and advance in their careers.

Leadership must earn trusting relationships with the people doing the work of their companies. They can best do that with conversations, in person and telephone, not emails and newsletters. Their team members want to be successful, as we all do. Help them. Ask for their ideas and advice. What can we do to better serve our clients and customers? To improve how we work? What would help morale? What could we streamline to save everyone time? What do you need and want from me? What advice do you have for me? What do you feel should be our priorities going forward?

And we must listen attentively to understand and learn.

It is also essential to have diversified leadership. Women are generally better communicators, and they are often more thorough and risk aware than men. Women value relationships and tend to be all about the team, not themselves.

It’s true that private and family-owned companies have a huge advantage in the quest to restore trust. They do not have the enormous pressures of quarterly earnings, and they may invest long term in their people, helping them develop professionally and helping them feel appreciated and valued.

Interestingly, the senior management of practically every company states – even brags – that their greatest asset is their people. Yet that is often just rhetoric.

It is absolutely true, though! A company’s great asset is its people!

To gain the hearts, minds and faith of our team members, we must change our attitude, the way we carry ourselves, the way we think and act.

The way we treat our team members leads the way. Do we take ten minutes to greet them personally, to say that we genuinely care about what they’re doing, what they think? Do we think of them as partners and teammates, rather than staff or employees? To me, there is a huge difference.

I hope these thoughts are helpful. Having an organizational culture that is founded on trust, loyalty and a sense of community will make a significant difference. Yes, trust has been violated over and over by corporate management, and yet there will be great benefits from a sincere commitment to regain that trust.

Recognize that while it will take time, we can make progress if we make the commitment. We will begin to see the benefits of our positive leadership in the energy and appreciation of our people.

Happy, engaged, and aligned team members who respect senior management do better work – thus generating improved results.

It’s a challenge, and it is our privilege and duty as a senior managers, and true leaders, to help our team members with their work and their success, and to help improve our organizational spirit!

Remember – managers focus on numbers; leaders focus on our people! Be the respected leader who turns around corporate trust!