If you had asked Carol in 2001 if her company was led by a trusted leader you would have heard a resounding "yes." Carol was a manager at Enron during its stunning rise to glory. "Mr. Lay was very much a father figure for many employees, revered for what appeared to be his honesty, his intelligence, his business acumen, and the generous things he did for his employees," she remembers. Enron employees were well paid, started with three weeks of vacation time, had excellent benefits, and enjoyed frequent appreciation parties. During the holiday period Ken Lay would open his office so anyone could meet with him and have their photo taken. When encountered in the hallways at Enron he was warm and friendly, often opening doors for employees.
"Frankly, many people loved the man," Carol adds. "But when we heard him invoke the Fifth Amendment it was heartbreaking; it brought tears to my eyes." Despite losing 90-percent of her retirement funds, Carol's biggest source of pain at Enron was Ken Lay's betrayal of her trust. He let her down.
Trust is broken in organizations every day, and not just in high-profile corporations like Enron, WorldCom, and Anderson. It's just as apt to happen in a family business, a hospital, or a non-profit as it is in a billion-dollar firm.
When trust is lost employee morale evaporates, customer loyalty wanes, and productivity declines as employees work through their feelings of embarrassment, anger, and uncertainty. Ignored, the tentacles of broken trust worm their way into every facet of an organization, including the bottom line. Watson Wyatt's 2002 People at Work Survey found that companies with highly-committed employees outperform low-commitment companies by 200 percent.
Taming the Beast
Broken trust can be controlled, tamed, and banished. How it's done ultimately depends on the circumstances in which the trust was lost, but in most cases the principles of the REPAIR model apply:
While there is much more to be said on the topics of identifying and building trust, the main elements of repairing trust are summed up briefly below.
Recognize the intensity of the loss of trust: its depth, its breadth. What devastates one department may not show up on the radar screen of another.
Ben was marketing director for a Fortune 500 telecommunications firm where the 1950s-style corporate culture encouraged testosterone-fueled fiefdoms. For years, Ben's division chafed under the restrictions of the corporate PR department, which controlled all the advertising and marketing communications activities. When Ben's boss decided to bypass corporate PR and secretly hire a competing ad agency to help launch a corporate initiative, he turned an already adversarial relationship between the two departments into an all-out battle. PR's strong connection to the CEO led to the agency being fired, and the initiative, which had the potential to remake the company before the telecommunications crash, never had a chance to succeed. While the initial breach of trust directly affected only two departments, it ultimately contributed to the near downfall of the company.
Examine where the breach occurred, and where the damage was done. Did it damage personal trust (credibility, reliability, intimacy, and self-interest); and did it affect organizational trust (aspirations, abilities, actions, articulation, alignment, and resistance)?
Your instincts may serve you well as you assess the situation, but beware of relying on instincts alone. Our experience shows that personal trust is the more common victim of a sudden breach, and organizational trust suffers more from constant erosions.
Place it out there: Fast! Ignoring it or pretending it's no big deal will not make it go away. Don't worry about presenting an action plan yet; that comes later. Just acknowledge the loss and your awareness of it so people know it's on your radar screen.
Acknowledge its impact on the individual, the group, and/or the organization at large. In addition to mentioning the problem in meaningful conversations, you can allow employees to vent in town meetings, schedule one-on-ones, and, if you're part of a large company, monitor external company message boards on sites such as Yahoo and Vault.com. Keep an open mind and stifle any temptations to defend yourself, as it may backfire.
Cynthia is the operations director for a non-profit conservation organization. Last year morale was slowly eroding as her boss, the director, not only continually failed to acknowledge his staff's work in front of the board and members, but he also took personal credit for much of it. After the problems were brought up to the board, the staff attended a retreat with the director, who agreed to deal with the friction head-on. But the defensive posture of the director kept him from absorbing the staff's feedback. Follow-up one-on-ones did little to remedy the damage, as the feelings of mistrust made the staff members feel coerced and vulnerable. Cynthia continued to serve as the de facto sounding board for disgruntled staff members.
Identify as precisely as possible what you'll be doing in an attempt to rebuild trust. Now you're ready to develop a plan.
Raise the bar of performance: Over deliver on your attempt to rebuild. People in situations of mistrust can be jaded or suspicious that what you're doing is not enough. Do more, longer to break down the animosity or disappointment that has accumulated.
The conservation organization accepted the resignation of the director, and after a several-month search hired a new director who has made it a priority to rebuild trust within the organization. He began by spending time with each staff member, getting to know them and valuing their contributions. He admitted the holes in his own experience right up front, giving staff members an immediate opportunity to offer him something and feel valuable. Cynthia noticed that he acknowledges staff contributions regularly. "I get no fewer than three to five emails a week saying things like 'good job,' 'great letter,' 'nice way to phrase that.' It's simple, but in terms of rebuilding spirit, it's done wonders for me and the rest of the staff. It makes me more clear on what it takes to rebuild trust."
Reflect carefully on whether progress is being made, and what else needs to be done. Rarely does everything go perfectly on the road to rebuilding trust. What you learn from this experience will help you when it happens again, which, inevitably, it will.
Repeat the process for a good long time. Keep at it, even if it feels as though it's been going on for too long. Your ongoing commitment to resolving the situation will clearly demonstrate that you are a trusted leader.
N.B. (Names have been changed to ensure the privacy of interviewees.)
Robert Galford, managing partner of the Center for Executive Development in Boston, has taught in executive education programs at Columbia, Kellogg, and Harvard. He is the co-author of The Trusted Advisor (with David H. Maister and Charles H. Green) and The Trusted Leader (with Anne Seibold Drapeau). His latest book, Your Leadership Legacy - Why Looking Toward the Future Will Make You a Better Leader Today, is co-authored with Regina Maruca and will be published by Harvard Business School Press in September 2006. For more information see www.yourleadershiplegacy.com.
Many more articles in Creative Leadership in The CEO Refresher Archives