The Trust Mandate for Future Leaders

The Trust Mandate for Future Leaders

A while back I was swapping stories with a friend of mine who is an HR Director for a major West Coast hi-tech company. He told me how often he would work hard to put together an attractive offer to lure someone away from one of the Silicon Valley giants, only to receive a call the week before they were due to join him saying him they weren’t coming after all. What staggered him was not the fact that they’d accepted a counter offer. It was that when they called him, they showed not one ounce of remorse.

I experienced a different issue when as HR Director for the BBC I had to write to employees. Unfortunately I never got to launch the new Drama season on BBC1 or the line up for Strictly Come Dancing. My emails, in an era of cut backs were rarely pleasant to write or read. They typically announced the removal of some perk, some new rule to follow or worse still, another below-inflation pay deal or redundancies. I always hesitated before pressing Send, knowing that their arrival in 20,000 inboxes would spark a deluge of angry responses. I found each new email more problematic to write and began to dread the inevitable backlash. I began to call up the people who had been the most rude or aggressive in their responses and asked to have a coffee with them. I was always amazed by a couple of things; firstly, that they were never as hostile face to face – but more importantly, my emails were always perceived as being part of a more sinister, hidden agenda from management, far more gruesome than the original email.

These two anecdotes are for me symptomatic of a broader point – that the relationship between leaders and employees has changed radically and that leaders of the future will need to face up to this and make improvements to the relationship if we are to meet the demands of the future.

The Old “Deal” is broken.

It’s worth looking at why this relationship has changed. Firstly, we have to finally accept that the old “deal” is dead. The financial crisis and recession killed off the last remnants of the old employment relationship, the post WW2 contract where I work for and am loyal to you and you provide me with a job for life and a generous pension when I leave. We made one in seven people redundant in the UK during the recession, we cut or froze their pay and the once ubiquitous final salary pension schemes are now as rare as hen’s teeth. Moreover, the Global Financial Crisis demonstrated that our business leaders were apparently unworthy of our trust. The once anonymous but revered Captains of Industry were paraded on our TV screens, their photos covered our newspapers and we witnessed them being beaten up by our MPs in various Select Committees. Finally, there is also a new generation of so-called “Millennials” who are not burdened with the Baby Boomers’ unquestioning deference and loyalty. A generation for whom the need to be promoted and recognised through the traditional hierarchies in corporate life no longer has the same allure.

Trust Matters More than Ever

Does it matter that the old relationship has gone? Is it a problem that only one in five people believe a leader will tell the truth when confronted with a difficult issue? I believe the need for people to trust their leaders has never been more important for three key reasons.

Firstly, trust equals money. When 70% of global companies’ market value is comprised of so-called “intangible assets” – goodwill, intellectual capital and brand equity – the ability of employees to impact that value is significant. Gone are the days when a disgruntled employee would simply moan about their leader in the pub with a few mates. Now they can tell millions if they can tell their story strongly enough. Just look at how AOL’s Tim Armstrong’s sacking of an employee in a big meeting went viral in a matter of hours. Look at the rise of Glassdoor, the Tripadvisor for places to work. Employee power is growing and lack of trust in leaders costs companies dear.

Secondly, in a so-called VUCA (volatile, uncertain, complex and ambiguous) world, leaders are asking their employees to follow them into the most unchartered of territories. At the BBC we asked our people to respond to the rapid changes in media consumption by working in new ways, with new technologies, in new environments and with new people. How could we expect them to trust us enough to follow us into this uncertain and scary world when they didn’t even trust us to provide them with a fair rating in their annual appraisal?

Finally, in the future knowledge economy leaders need their people to consciously give them their ideas, their creativity, their connections and their opinions. In a world where technology has provided so many more choices about where and how we work, leaders need to be seen as worthy of that choice.

Trust has never been more important.

How leaders destroy trust every day

How can the leaders of the future learn from our mistakes and inspire trust? Having been a member of the BBC leadership team that oversaw the Savile crisis and its severance scandal, I am clearly not speaking from a position of moral authority – but hopefully with a degree of understanding and humility. Obviously, there are some fairly fundamental things for future leaders like not doing bad stuff or handling crises better, but there are some really basic things that we do every day, often unwittingly, that erode the relationships with our people. For me there are four key things we do as leaders that destroy trust and I should point out that I have probably been guilty of doing all of these at some point in my career!

1. We lack humanity

Something weird happens to people when they communicate as leaders that you rarely see in everyday life. We forget all of the communication techniques that we use with our friends and families and develop a “corporate personae” that is almost devoid of any humanity. One day at the BBC, I got a call from a guy in News who wanted to be helpful by explaining to me that “my emails were crap” and I should “get someone else to write them for me”. I was slightly taken aback as this was precisely what I had done. My emails were usually written with several other people – people in HR, people in Legal, people in the press team and people in Internal Communications. As I re-read the most recent communications I realised with dismay that he was right. My emails were crap. They seemed pompous and sterile, lacking any humanity or humility. I had adopted the royal Executive “We” and, in an effort to be accurate, I had “lawyered-out” any personality.

We forget the power of story-telling to create a bond with our listeners and we resort to the single biggest destroyer of humane communications – PowerPoint. We push deck after deck of dry analysis at them believing wrongly that the power of logical argument will build buy-in to our ideas. During the period when we were trying to communicate the need to reform the BBC’s final salary pension scheme, the trade unions’ leaflets were so much more powerful than the corporate line. They created images of fat, overpaid BBC executives who cared little for the poorly paid BBC staffer who would suffer in old age. They produced caricatures of the Director General and his team with an almost pantomime villain quality. We talked about mortality rates and interest rate risks. During the severance scandal, the press had a field day with images of overpaid executives receiving enormous amounts of money. One entire page in the Daily Mail was devoted to my supposed obsession for designer labels and expensive handbags – despite me being a TopShop regular! The corporate response tried to explain what we had been doing by talking about contractual entitlements and payback periods leading to savings of £20m a year. A futile attempt to combat emotion with analysis.

1. We lack courage when things get tough

Of course it is hard to walk into a room of angry staff. No leader relishes facing their team after announcing job losses or pay cuts. But it amazes me how many of us take the money that goes with the senior role and yet become invisible when it gets tough. In every period of difficult news “Hunt the missing Exec” is a favourite pastime and yet this disappearing act damages their faith in us to do the right thing. One of the bravest leadership acts I’ve seen was Tim Davie who, on his first morning as Acting Director General of the BBC during the Savile crisis, went straight onto the Newsroom floor to meet with the journalists. Most senior managers would rather go and visit the staff in Gaza then make an appearance down there during a crisis. That one act earned him a huge amount of respect and trust.

1. We demand petty privileges

In recent years the BBC started publishing all of the expense claims of its senior leaders. Whilst the press focused on the more luxurious claims – a bottle of champagne or a posh dinner – what annoyed the staff most was the smaller claims – the postage stamp or the cappuccino – by people who were on six-figure salaries. We’ve all seen these small abuses of privilege and some of us have been guilty of doing it; the demand for a good parking space, the slightly better stationery than everyone else, no hot desking for the Execs. It does us no favours and we come across as mean-spirited. You wouldn’t trust a mate who demanded petty privileges so why would you trust your leader?

1. We don’t trust them

We hope for and expect to be trusted but at the same time everything we do shouts that this is a one way street – that we don’t trust them. So many of our HR policies have been developed because someone did something bad once and a rule was developed to prevent anyone doing it ever again. We all have the “Stop Them” Policies and indeed hours of our time go into enforcing them. Think about your employment contract. This tells us how much we are going to be paid, the hours we are expected to work and the 30 policies that if breached, will result in us being fired. Hardly the opening gambit for a trusting relationship!

The three things leaders can do to build trust

So how can leaders of the future build a trusting relationship with their people? Clearly, there are some bigger questions around business ethics, regulation and transparency, building purpose or pay differentials between leaders and their people. But what are things that leaders can do every day to build better relationships? I believe there are three changes they can make.

1. Obsess about knowing them

You can only have a relationship with people you actually know. It’s not enough to try and engage with large groups of employees as if they are seen as a homogenous lump. You wouldn’t communicate with your customers in such an unsophisticated way; we invest significant amounts of time and money trying to know their likes, dislikes, ways of thinking and behaving. Yet we rarely apply this to our own people. 80% of us still only survey our people once a year and then produce actions plans that aim to show “we’ve listened”. We need to use the emerging research from the neuro-scientists to help us get better at really knowing our people, we need to learn from our colleagues in marketing about customer segmentation and we need to use technology as a relationship-enabler rather than a barrier – progressive companies are using Google hangouts and social media to great effect. But there is also room for more traditional forms of relationship building too. When we asked BBC staff about their experiences in relation to potential bullying and harassment we also asked them who were the great leaders – who inspired them and how did they do it? What came back surprised us by its simplicity. The leaders, they told us, who were the most trusted and respected did things like say hello to them in the morning, knew their names and asked how their weekend had gone.

1. Grown-ups

If we are going to build trusting relationships in the new world order we have to create working environments that have at their very core a belief that our employees are decent, adult, human beings who can be trusted to behave well. If you think about it, so much of what HR does is about preventing the worst behaviours happening. If we changed our contracts of employment to one that is not written with an eye on future tribunals but one that is about an adult relationship, how different would it be? If we tackled the individual who had behaved badly without creating new rules to prevent anyone else behaving that way, how empowering would that be? Netflix were heralded as having reinvented HR recently. Amongst their many innovative and more human approaches, they also abandoned the annual leave form. In one simple move the leaders told their people they trusted them to take the leave they needed to take. Simple, empowering and really effective at establishing a trusting relationship.

1. Niceness is making a come-back

Being nice is rarely one of the qualities we look for in leadership selection criteria. But I believe niceness is making a come-back. Our collective futures depends upon our leaders’ abilities to build partnerships, to collaborate more effectively with customers and competitors, to spot new business opportunities and threats early and to be agile in response, to manage diverse and virtual teams and to create environments where individuals can flourish and cope with uncertainty. We’ve all worked for or with the narcissist or the psychopath – these are not the people who are capable of leading in this new VUCA world. We desperately need some lower ego leaders in the future who get their kicks from enabling and creating environments where these new capabilities can happen rather than through personal glory and individual achievement. What about the leaders we’ve already got? Well, we have to help them be the very best human beings they can be. We need to encourage them to let their guard down, to understand the positive impact of humility, to use emotional stories rather than share data, to be visible when it goes wrong and take the flak – to see niceness as an asset, not a weakness. Only then can we start to build the trust we so desperately need.

(Originally part of a speech at Changeboard's Future Talent Conference held at the Royal Opera House, London July 9th 2014)